How to Spend Money Wisely and Enjoy Life

You may think that being careful with money is boring. That people who are extremely frugal must live a life of deprivation. Well actually most people who are extremely frugal get a kick out of it, it matches their personality type. But if that's not your thing then being very frugal probably isn't the right path for you - it won't make you happy and you probably won't stick to it anyway. 

We have two small kids. We're very aware of how fast their childhood goes. So this isn't the time for maximizing our earnings by working longer hours - our time is more important. We're also very keen to ensure our future financial security so saving and investing are important. 

My approach isn't about being extremely frugal or working all hours to earn more money, that's not the life I want to live. I like nice stuff. But I also like free time and financial security. So I need to find the right balance. 

The approach I take is thinking hard about what is important to me and my family and spending accordingly. People often find my spending patterns odd. My possessions are an odd mix of high end luxury and no name budget items. This isn't accidental, it reflects how much importance I place on the item and where I think value for money falls for me. 

For example, all the toiletries in the house are very inexpensive and I don't wear cosmetics. That's not an area where I personally think it makes sense to spend money so we minimize spending. But I have no problem spending money on products to protect my kids from the sun - that's important for their health. 

My crockery is over 15 years old and was very cheap when I bought it. I like the design. I guess I found a bargain here. On the other hand, my Dualit toaster was expensive, but worth it for the quality. Sometimes you need to pay extra for quality, sometimes the cheap item is just fine - telling the difference is a skill you need to develop. 

I prefer to buy quality clothing but less of it. My good quality winter boots are several years old and still in good condition. My Mum on the other hand gets bored of clothes very quickly and likes to follow fashion, she would rather buy lots of cheap clothing and change her wardrobe regularly. My goal is to just buy good quality clothing when something needs replacing. 

My kids spend hours and hours playing with LEGO. Although it can seem expensive for a small box of plastic bricks, when I think about the enjoyment and useful skills they will get from it, it's much better value that buying a lot of cheaper toys that won't get played with as much. But I do know kids who can't sit still long enough to play with LEGO, it wouldn't be a good choice for them. 

So everyone is unique. We all value various possessions and experiences differently. You need to develop a good understanding of what actually makes your life richer. 

Think about how you have spent money in the past. You probably didn't get it right. Do you have clothes that you have never worn? Have you spent a fortune on take out coffee? A gym membership that you don't use? That kitchen gadget that looked like a bargain but never really worked? Do you live in a bigger house or apartment than you need? 

How would your life be different if you had spent your money perfectly? OK, so you'll never be able to achieve perfection, but it does make you think. 

How about deciding that from now on you'll give conscious consideration to how you spend money? You'll make some mistakes along the way, but you can learn how to spend money wisely. 

To develop your instincts for spending money wisely, it's worth evaluating how you have spent money in the past. You can consider money spent on travel, eating out and other experiences, but probably the easiest approach is to look at your possessions. 

Go through each room of your house and find good purchases and bad purchases. See if you can spot patterns. Have you bought things that looked like a bargain at the time, but then decided you didn't actually like it? Do you buy things and then not use them? Do you have too many of the same thing? Have you bought poor quality items and then not used them because they weren't actually any good? Do you have expensive items that you only used a couple of times?

Do you have items that you love and use over and over again. Those are the kind of purchases you want to be making in the future. Do you have purchases that have actually saved you money like energy saving light bulbs or a vacuum bottle for work that stopped the take out coffee purchases?

Next time you want to make a purchase, stop and think. Imagine you're looking back on your spending choices from a few years into the future. How will you evaluate your current purchase? 

Sometimes you can decide to do without an item altogether. Sometimes you'll decide that actually it makes more sense to buy a more expensive item that will last longer. Other times you'll realize that this is an area where you can save money. 

There's lots more that you can do to really get your finances under control, but spending your money so that maximizes what you get out of life is a good start. 

This article uses public domain images from Pixabay.