To Spend or Not to Spend

Finance is definitely an important part of our life. It’s impossible to be an effective person without being effective in our finance.

One of the main issue in finance is determining whether to spend or not. This is an important issue to consider. Spending money on something unnecessary is wrong, but not spending money on something necessary is equally wrong.

With the rising popularity of frugal lifestyle (which is promoted by many big blogs, among others), more and more people tend to consider the issue in only one aspect, that is in not spending the money. Of course, frugal lifestyle is a good thing since overspending is a problem faced by many people. However, it might go too far. People may end up choosing not to spend on something which indeed is necessary.

Since many people already write about not spending, here I’d like to take the opposite side to keep a balanced view. If something is necessary, you should spend the money.

Of course, necessary is a tricky word. Everyone can give their own meaning to this word.

To determine whether or not something is necessary, I think we should go back to our life purpose. By referring to our life purpose, we could assess the value of something. Is it really valuable according to our life purpose? Does it help us live a life that matters?

Sometimes there are things which may seem expensive in the beginning, but they could actually help us a lot in achieving our life purpose. For example, maybe part of our life purpose is having deep relationship with our family. In some occasion, it may mean spending more on something to give unforgettable experience to our family. It may seem expensive in the beginning, but after taking our life purpose into account, we would realize that it is well worth it.

If you are still overspending, of course you should think more about not spending. But if you are joining the frugal lifestyle (which is a good thing I personally recommend), just be careful not to go too far. Sometimes it is wrong not to spend.

9 Comments

  1. Hi Donald

    Wow. This is such an important concept. It’s one that I struggle with myself. Especially in my business I find it hard to balance the “bootstrap, do it all yourself” mentality with the outsource the stuff that someone else can do more effectively mentality.

    Thanks for bringing this up so that I can start finding that balance you talk about!

  2. Thanks, Ed! Finding the balance is an art we should learn to master. I’m still learning myself and still have a long way to go, but at least we can start moving to the right direction.

  3. Well, ‘Whether to spend or not to spend’ that seems to be a way of thinking that is very much based on ‘Lack Thinking‘ rather than on ‘Prosperity Thinking’.

    It looks to me that you analyse a lot of things with your mind. (that usually is very effective and useful BTW) But I think that it’s also very important to take into account the way you feel, let your spirit and soul play a part as well., than you will simply know what’s necessary or not. Indeed by getting in touch with your Life Purpose will accomplish such a thing.

    You seem to be talking about ‘Economical Choices’ , because wheter to spend or not to spend doesn’t seem to be a ‘Finance Issue’ to me. Doesn’t Finance have to do with providing in the capability, ability – or maybe even the power – of a Business or a Household? So I think it has to do with the capability to do something. A Frugal Lifestyle approach seems to be like living with your foot on the ‘brakes’ just making it harder to achieve your goals. Not helping yourself or others that way.

    Talking about Finance, If you look at the guys from ‘MySpace’ or some of the other Internet Business guy’s or ‘Highshool Kids’ that develope an idea from their garage, create an explosive growth of threir business. (or selling their business for outragious amounts like 250 million dollar etc. etc.) Having things happening like an annual turnover growth of 500 or 600% or other Crazy stuff like that happening!

    Those guys don’t work on ‘Mind Power’ analysing their way into success. Those guys work on pure passion. If theiy had hired a guy from Harvard Business School, he might have had a sensible ‘Mind-like’ analitical approach going something like this: ‘Well looking at the current numbers we should aim for a 5 or 6% growth by next year’ etc. etc.

    To get a little taste of this beautifull ridiculous ‘Pure Passion’ approach, you might consider to have a look at this outragous funny little Movie you can find at:

    http://www.ridiculousincomegoals.com/?e=hpvanduuren@hetnet.nl

    Have Fun,
    All the Best,
    HPvD.

  4. Interesting view, HP. I agree with your statement: “let your spirit and soul play a part as well, then you will simply know what’s necessary or not”. Things are indeed not complicated when we put our intuition into play.

    The idea for this post actually came from my readings in personal finance, which often emphasize frugality. Personal finance materials tend to use “analytical” approach instead of “pure passion”, and I use similar approach in this post. Of course, “pure passion” approach is also important.

  5. spend money today…because its your life,you dont no what will tomorrow

  6. Jane:
    I think we still need to plan properly before spending. Otherwise, it may lead us to financial troubles.

  7. […] To Spend Or Not To Spend – Life Optimizer […]

  8. In principle a good life is the one you do what you like to do.
    And a good lifestyle is the one in which you like to do the things you can ACTUALLY afford to do.
    Happiness is in wanting what you can have and reach, not unreachable goals.
    And not in having what you like, but liking what you have.
    May be this is the secret…

  9. Patrizia,
    Thanks for the insights! I especially like “And not in having what you like, but liking what you have.”.

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