The right way of spending more to lead a rich life
The more & less approach to spending well Finally, I had my epiphany after listening to US personal finance blogger Ramit Sethi. He introduces a unique view on spending. Instead of taking a simplistic ‘don’t spend money on expensive things’ view, he advocates a nuanced approach to spending.
Spending that is INTENTIONAL! Here is my version of this idea. Leaving aside your fixed monthly expenses (read as house rent, utilities, grocery, petrol, etc) over which you don’t have much control, identify the key areas that roughly account for 80% of your remaining discretionary spends, such as eating out, movies, clothes, grooming, fitness, self improvement, travel, charity, gadgets, etc. Now two things can happen.
We spend like crazy across all these areas, leaving us with a huge credit card bill and no savings or we try to save up on everything and end up not spending on anything we love.Both of these are extremes, and the trick is to find the right balance. This is where you need to embrace the idea of ‘prioritization’ and the ‘more and less’ approach. When it comes to maximizing your joy and fulfilment, not all areas where you spend are created equal.
Each of us are unique and have a few different areas that matter more to us. You may love to spend on travel and think that spending on fitness is a waste of money. I may think the opposite.
I love spending on fitness and don’t get excited about travel. So, the key here is to stop judging and instead understand our priorities versus what is being thrust upon us by friends, family and the society. If you enjoy music, spending more on music-related experiences and items will bring you more joy.
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