Recently I was looking at my credit card statements and realized that I have spent over $400 on Chipotle alone this year.
I also spent $170 yesterday on a yearly gym membership.
As someone who is obsessed with personal finance, am I out of my mind? How can I justify so much unnecessary spending? Surely I could find a cheaper alternative to the gym and stop visiting Chipotle so frequently. These would be easy savings.
But upon closer examination of my credit card statements, I noticed a few other things:
I have spent less than $100 at all other restaurants this year.
I have spent less than $50 on new clothing.
I have spent less than $80 on new shoes.
I have spent $0 on new technology.
I have spent $0 on cable TV.
There are some categories of spending where I am absolutely crushing it, but there are others where it appears I have no control.
My explanation for my spending habits is simple:
As much as possible, I let joy drive my spending.
Chipotle brings me a ridiculous amount of joy. So I’m OK with buying it often.
Working out at a gym surrounded by other people also working out brings me joy. It gives me something to look forward to at the end of the workday.
Conversely, I don’t care about new clothing at all. Shopping drains my energy. So I spend close to nothing on clothing.
I rarely watch cable TV so I just don’t pay for it at all.
There aren’t many restaurants I like so I spend very little on dining out.
Using Spending to Optimize Joy
In the personal finance community it’s heresy to suggest spending money can ever be a good thing. We’re supposed to save, save, save.
But I think it’s possible to become so obsessed with saving that we forget about the end goal of happiness. The whole point of saving a ton of money is to have the freedom and flexibility to live however we want without becoming stressed about our finances.
The trick to optimizing joy while keeping spending low is to spend very little on things you don’t care about so you don’t have to feel guilty about spending on things that bring you joy.
Identify Your Joy Categories
I think for most people there are a handful of spending categories that bring a ton of joy and a huge mass of categories that bring virtually no joy. These categories vary from person to person.
I love Chipotle and weight rooms. I couldn’t care less about shopping and cable TV.
What do you love? What brings you joy? Allow yourself to spend on these things without feeling guilty.
What isn’t important to you? What spending doesn’t bring joy? Minimize these expenses.
For example, maybe you love rock-climbing but you’re an introvert and you don’t like going to bars. If you’re spending your weekends at bars and you have no money left over to spend on rock-climbing gear, your spending isn’t optimized for bringing you joy. Instead, spend less on bars and more on rock-climbing.
Or if you love taking weekend trips with your family but you have no money to do so because you’re spending all your money paying for a new car you don’t need, your spending isn’t optimized for joy. You’re better off finding a cheaper alternative for transportation to free up enough money to take more trips.
This advice sounds so simple and obvious, but so many people habitually spend money on things that don’t add joy to their life and have no money left over to spend on activities that actually do bring joy.
I encourage you to take a look at your own monthly credit card statements. What things are you currently spending money on? Are those things bringing you joy?
I think you’ll find that there are a few things you spend on that bring a disproportionate amount of joy and value to your life, but also many things that aren’t doing much for your overall happiness. Prioritize the few things that bring joy and minimize the many things that add no joy.
Full Disclosure: Nothing on this site should ever be considered to be advice, research or an invitation to buy or sell any securities, please see my Terms & Conditions page for a full disclaimer.