Money is often at the root of why we hesitate to do anything – and why we feel the need to gather so much information before deciding. One concept that has been working very well for me is to focus on spending on experiences. We’re told constantly that we should purchase things logically, not emotionally. But at the end of the day, we’re going to be emotional about our purchases under the guise of being logical about it.
Why not be upfront with yourself: “YES, I am going to be emotional about this purchase and I’m not going to fight it.”
The benefit of being emotional about your purchases
If you know you’re emotional without trying to rationalize it, wouldn’t you be more aware of what you’re feeling and why you’re feeling it? Wouldn’t you be more aware of your intuition? Wouldn’t it allow you to embrace surprises more often because you’re not cluttering your mind with information and misinformation? Sure, with every good surprise there’s a risk of a bad surprise … but how can you set yourself up for a more good surprises if you don’t take a risk more often?
This can even apply to simple things. For example, I love books. Everyone says that buying books is a big waste of money when you can just go to the library or get the books used. Sure, I could use more of my money to do something more practical, like invest in my 401(k).
But I don’t care. I love books. I usually hate digging through my outdated library for them. And I don’t really care that much about 401(k). Maybe it sounds stupid, but not if you reframe it. If I focus on what experience I can get from a book, it might not sound so stupid. Maybe I can get a business idea or learn a new business strategy. Maybe I’ll discover I love the book and connect with people who do also, thus expanding my social connections. Maybe I’ll learn a new insight that will change the way I see the world and prompt me to change my life.
What you really care about vs. what you think you care about
Wouldn’t it be so much easier if you focused on experiences that you truly desired and spent what’s necessary on everything else (e.g. things)? Compare this to people who are pulled in all directions by society and peer pressure – the people that have to have the best of everything, the people who focus on things, even if they don’t actually care about most of those things?
Technically, those people are buying experience as well: the experience of being admired. But they aren’t conscious of it. We’re brought up to believe we “need” things but not why. They’re more focused on the things they buy, rather than on the emotions behind why they buy. If they were more conscious of the emotions, they’d realize: “Hey, I don’t care about 75% of this crap, I just want what it can get me.”
With that awareness, they might discover easier, more conscious ways to get the experiences and feelings they’re going for. There would be less focus on the thing itself, the desire to preserve that thing, and the price to obtain it.
You can’t measure experiences in dollars – so don’t even try
Often, you won’t be able to place a concrete value on experiences, especially the ones you desire. And many times you won’t get that money back, dollar for dollar. But who cares? What else would you rather spend that money on? Things that you can’t take with you when you die? Things that you don’t technically own? Do you think you own your house, cars, clothes, and shoes? They could all burn down tomorrow or the bank could repo it all, and what would you have left? Exactly — the memories and the experiences you had in them.
Go buy that cheap plane ticket – why not go to Spain for a week on a whim? Get away from town for the weekend – it’s better than sitting around all day blowing that money on junk. Go on that blind date – you’re not losing anything if it turns out to be a dud. Apply for that random, interesting looking job a state away – even if it sucks, you’ll learn something along the way. Take that class on the topic that you have no clue about – if you hate it, it’s one less thing to wonder about.
How to start purchasing emotionally
First off, you’d have to start getting into a habit of being aware of why you buy the things you do. What are your interests and desires and how do they relate to how you spend your money? Are they on par with each other? If your great passion is food, are you spending your money on ways to learn about food and how to cook food – or are you spending it on expensive car payments and insurance that you don’t need? Even if you don’t know what your interests are, you can get hints by looking at what you spend and why.
For the next month, keep track of everything you spend money on. For each item or experience, rate it on a scale of 1 to 10 on how important that purchase was to you emotionally, not practically. Obviously your rent is important in a practical way, but unless you’re passionate about paying your rent (which I highly doubt), you shouldn’t rate it as a 9 or a 10.
For everything that you rated emotionally as an 8 or above, list why they were important to you and what experience you got (or expect to get) from them. After you’re aware of what emotional benefits you’re getting from those purchases, research and list ways that you can get them easier or in a more focused way. If you discover you’re spending a lot of money on collecting and refurbishing vintage cars and flying kites, then perhaps you should have a stronger focus on those. Anything that’s listed as less than a 3 on your list, find a way to minimize the cost (if it’s necessary, like rent) or eliminate it altogether. Anything rated from 4 to 7 is iffy and should be minimized as well.
Note: if you’re finding that too many things on your list are “necessary” or “practical,” you may need to start rethinking why you labeled them as such. Most things aren’t necessary outside of basic shelter and food needs. Also, some necessary things have emotional desires attached to them. Food might be more important to one person and housing might be more important to another, so they would respectively rate those higher emotionally. The point is to be aware of why you purchase, not to start labeling things as necessary because other people tell you it’s necessary.
After a while of doing that, you should be more in touch with your intuition and your desires. At that point you have a stronger sense of who you are and what you want. You’ll be less swayed by what other people value and the need to keep up with them.
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{ 9 comments… read them below or add one }
This is an interesting concept. I believe that when spending a large amount of money, like buying a house or a car, you MUST be emotional about that purchase. It is simply too much of a commitment for you not to be.
On the smaller items, emotional purchases are great for discretionary money. What I have seen far too often is the emotional purchase that buries someone in debt. The debt then is a significant stressor that only more emotional spending seems to address, and then only for a short period of time. I think that’s a dangerous cycle.
However, when your means support it (even if you live below your means specifically to support it), the emotional purchase is one that is well worth the experience, as you’ve noted. I have literally done some of the things you suggested like hop on a plane for a couple of days and leave the country on a whim. I wouldn’t trade those moments for the world.
ForNot´s last blog ..Just Bus’ A Move
Awesome advice Valerie! It seems that there are 2 groups of people: the minimalists who try to narrow down their belongings for the sake of not having any attachments and then you have the people that are impulse buyers. The ‘you only live once, spend all the money you can’ type of people. I think it is good to find a happy medium. Like you suggest in this post, spend money on things that are important to you and minimize your expenses on the things you don’t care so much about.
One thing I would suggest to anyone wanting to keep track of their expenses is to set up an account (it’s free!) at the Yodlee Money Center and set it to keep track of all your credit card purchases. Don’t buy anything with cash and only use your credit card (don’t forget to pay off your card at the end of the month, though!). Yodlee will track each and everyone of your purchases so you can see when you paid for a movie ticket or for gas. Everyone recommends Mint (which is run by Yodlee) but I found it to be too buggy. You might want to check it out.
For me, I don’t care about cars or getting an iphone. I care about travelling and experiencing things most people don’t get to see. So, as a result, I choose to spend my money on travel and drive the same car I had when I was 17 and I couldn’t be happier!
Richard Riley´s last blog ..Test Blog Post
@ ForNot: There is definitely a risk of going into debt over emotional purchases just as there is a risk of losing out big when trying to be TOO logical about purchases. In an ideal world, there definitely needs to be a balance of both and that’s what I strive for in most of my purchases. One of the things I struggle with is sacrificing too much of my wants and even my needs in the name of being logical, which is what inspired me to write this. Logic can easily convince us that emotions are worthless, frivolous things to be avoided when in fact they can be the key into living a great life and having a positive relationship with money… IF emotions are reacted to effectively. And that can only happen if people are more aware of them and accept them, rather than trying to stuff them in and invalidate them.
@ Richard: There has to be a 3rd group of people that are torn between the two extremes, and that’s where I feel like most people fall in… myself included. The problem is this happy medium is so elusive, lol! Thank you for the recommendation on Yodlee. I’ll have to check it out. I do wonder how effective it will be however, with the credit industry crunching down and raising its standards. It may deter people from using CC’s the way they used to (at least temporarily). That’s great you were able to accomplish so much by focusing on your desires and on experiencing things. I can definitely relate: I do not care about having the newest car or gadget. They’re interesting, definitely, but they aren’t high on my list of priorities. I know what I don’t care about and that, I believe, has helped me stay out of consumer debt.
From You: “First off, you’d have to start getting into a habit of being aware of why you buy the things you do. What are your interests and desires and how do they relate to how you spend your money? Are they on par with each other? If your great passion is food, are you spending your money on ways to learn about food and how to cook food – or are you spending it on expensive car payments and insurance that you don’t need? Even if you don’t know what your interests are, you can get hints by looking at what you spend and why.”
So True – this is much different than ‘impulse’ spending. Impulse spending is wanting that new car, wanting that TV, craving fast food, buying because your heart flutters. I like that you mention using you ‘great passion’ as kind of a measuring stick against what you are spending your money on. This hits home true for me – I really don’t mind even large amounts of money going towards what I am passionate about and especially if I believe it will return more over time. Thanks!
Jeremy Johnson´s last blog ..Video – Garden Of Life Series Part 1
Valerie, great post. I think that some people don’t realize that a lot of what they spend money on to make themselves happy is really about impressing other people. Thats why I liked this part in your article.
“First off, you’d have to start getting into a habit of being aware of why you buy the things you do. ”
For so many the emotional response is, this will get me noticed. And I think that’s why leads to the debt personally.
I also make a lot of purchases based on emotion, but not to impress others, but to satisfy myself or my wife. I love spending money on her that gets an emotional response.
If that makes sense.
@ Jeremy: Thanks for distinguishing between impulse spending (which is also emotional) and the kind I’m talking about. It’s something to be aware of because in impulse spending the awareness of the emotions isn’t really there – it’s just pure acting on it without knowing why. And for the record, I could spend hundreds of dollars on books (that I want to read), plane tickets (depending on where I’m going), and business related courses and (most) purchases without blinking an eye. Ask me to spend money on most clothes, textbooks, movie theater tickets, or think too hard about the rising gas prices, and I’ll break into a sweat.
@ Mike: Exactly, most of our purchases are simply to impress others. Taking the time to impress ourselves is the real challenge here. I think that’s sweet how you’ll buy things to get an emotional response from someone else, namely your wife. Giving to others can be a great reason to spend money if it’s not overdone. If it’s done with a lot of thought behind it, even better.
All 4 countries I visited last year were planned in less than a months time. I swear that is the best way to plan a trip. The experience was PRICELESS! I’d rather catch public transportation knowing that I’ve been to Paris rather than have a new Lexus. Great post and thank you for sharing it!
The topic of money seems to be a topic that many people seem to differ on. I believe that money buys freedom, that may allow you to have experiences you otherwise would not have. But, also I agree with your point here, that it isn’t the end all be all to the actual experience. I like how you mentioned also the reason we buy what we buy, it really puts the whole buying things you don’t even want just impress others into real perspective. Money is an energy and we all have to deal with it to function in this society. With that said, the simple and joyful experiences we have in life doesn’t have a price tag.
@ MissGina: That’s awesome!
And I’m so with you: I’d give up the new Lexus for travel experiences or something else… that’s just me (and you).
@ Baker: Agreed that simple and joyful experiences in life doesn’t have a price tag. Life is meant to be enjoyed, not to pursue more and more money … to what end? I’ve seen too many people who make so much money but never seem to enjoy it. I think we can apply Parkinson’s law to money: the number of things you want expands to fill (or expand past) the amount of money you make.