Since starting work and collecting my first paycheck just over 2 years ago, I have developed an interest and fascination with personal finance. I’ve read a lot online about saving and investing money but less about how to spend money on yourself.
This is a huge part of personal finance and something I have always struggled with as a tight-fisted saver.
Spending money, especially on yourself, is almost a taboo subject – associated with greed, consumerism and capitalism. Yet the ability to spend money well is arguably more important than saving money, given it’s the end to that very means.
I have been squirrelling away savings and building an investment pot over the last 27 months, enjoying amazing but sensible holidays on tight budgets, and avoiding any other large unnecessary costs – the temptation of a new car or laptop.
Part of being a calculated saver is being a calculated spender too. When I moved flats in September, my rent went up a whopping 46% but it’s still a lot cheaper than what most people pay to live in major cities.
I also appreciate the place all the more for living in a dive for 2 years, saving about £3600 for my troubles.
There comes a point when you ask yourself: is it worth it though?
Would I have traded say £1800 for 12 months of higher living standards? No mould in my bedroom or small talk in the kitchen?
(In hindsight, I probably would have but my circumstances were tricky…)
My inclination to save is definitely a product of my environment.
I’m extremely fortunate to have grown up in a financially comfortable house. While we never lacked money, my parents were never the types to flash the cash.
We holidayed less frequently than most people I knew with houses half the size. While he could buy any gadget he wants, my dad painstakingly researches purchases for months and then enjoys them all the more.
I have a huge amount of admiration for this. It’s something I seek to imitate but I also recognise as much as them that there’s a balance to strike.
This month I got a big bonus at work and, anticipating it coming for a while, I have been uncharacteristically making purchases. Most notably, I have bought a new phone as part of my commission and booked a trip to Edinburgh for the Hogmanay over New Years. I’m super excited about both.
For each expenditure, I waited around for a good deal, making them all the more satisfying. For other recent purchases (some additions to my wardrobe), I hit the Black Friday sales.
While I usually feel uneasy spending money, I’ve recently felt the need to start enjoying myself more. Too much work and not enough play.
It’s not always a question of how much you spend but what on.
The phone I bought (while 50% less expensive than the latest iPhones and just as good) may as well be an extra appendage for all the use I will be getting out of it. On the other hand, spending my New Years in Edinburgh will be a one-off, unique experience that I’ll remember for years to come.
The other things I’ve bought (some are Christmas presents) were out of necessity. I’ve replaced at least two stained jumpers, some tatty old shoes and a falling apart bag. Holey boxers that I’ve had for years and skinny jeans that I can barely get into anymore. All items that were making me look scruffy and that I’d long gotten my money’s worth out of.
All of their replacements were either purchased in the sales or were of good enough quality to last for years. They are investments just as much as the US equities I’m holding… The same can be said for New Years and with that in mind, I want to plan more holidays for 2019.
The trick is knowing what to save money on and where to spend it.
I’ll be running my car until it gives up on me. I can say the same about my laptop and certainly now my new phone. With these main expensive items taken care of, in the scheme of things, it wouldn’t hurt treating myself to a new item of clothing once a month, or a day out with friends.
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