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What to spend money on to live your best life

by Rob Bertman, CFA®, CFP® in Budgeting
October 16, 2021
What to spend money on

What to spend money on to live your best life

All your life, you’ve been told by family, friends, and so-called “financial gurus” to spend less money, stop spending money or not to waste your money.

That messaging is ingrained within us and stops us from fully enjoying the fun stuff. We can’t escape feeling guilty when we spend money on things people tell us not too.

Who are they to tell you how to spend your hard-earned money anyway? You’re living YOUR life, not theirs.

No one really tells you what to spend your money on though or how to spend money on yourself.

That…Ends…HERE!

I’m here to tell you that life isn’t all about saving money for the future. 

it’s ok to give yourself permission to spend money on things that enhance your life.

The 10 Best Things to Spend Money on

Yes, there are things you should spend your money on. 

Some of them are scientifically proven to help you live your best life, and some of them are based upon who you are and what you enjoy doing most.

Personal Development

Many of my clients say that they feel best when they are performing well in their career, being a good parent, or getting great at their favorite hobby.

Performing well and achieving your dreams starts with acquiring and developing the skill set to get you there.

Building your skill set leads to greater confidence, a higher sense of self-worth. This theory is called the confidence-competence loop.

Personal growth also improves our mood because it pulls us out of feeling stagnant, stuck in the mud or just “meh”.. This is called languishing. 

Adam Grant recently did a TED Talk on languishing, and how to pull ourselves out of it.

Personal development can come in the form of taking a deep dive into a particular topic or skill, or you take small bites each day.

If you’re looking to make personal development a daily practice, my favorite app right now is GrowthDay by Brendon Burchard.

The reason I like it is for the Daily Fire 10-15 minute podcast within the app and the ability to journal and score your habits. 

Plus, there’s also access to many other courses if you get the premium version of it.

It helps make personal development a daily habit without taking up too much time and being overwhelming.

Action step:  Pick a skill, talent or hobby where you’d like to excel. Find a good entry point, and  spend money on personal development.

Physical Health

Ever been off your fitness game?

It’s not just about putting on the pounds.  We feel sluggish, mad at ourselves, anti-social, and have low self-esteem.

(I can’t be the only one here, right? Anyone?…)

When we’re fit and taking care of ourselves, we’re more energized, confident, and have a higher self-esteem.

The first thing we think of in this realm is making healthier food choices, exercise gear, and fitness apps & classes. 

spend money on healthy food

But let’s not forget about monitoring your health by seeing your doctor, dentist, physical therapist, chiropractor, and any other health professional that can make sure you maintain your health.

Action step: Pick ONE area of focus to improve your physical health, and pick 3 small action steps to take. 

Mental Health

Today more than ever, we realize that mental health requires its own focus apart from physical health.

Check-in with yourself. Are you truly feeling great or are you languishing or downright depressed?

You’re not alone here. The pandemic has shined a greater light on how many people it affects and removed the stigma of it.

It could be something as simple as picking up journaling to get your thoughts out or meditation to reduce your stress and clear your head.

Or you may want to explore help from a professional like a therapist or counselor. Fortunately it has never been easier and more affordable with companies like Talkspace and BetterHelp.

If you are having a truly hard time, see your doctor for help.

Make sure to take care of yourself.

Action Step: Evaluate your mental health status, think about the optinos above, and ask yourself, “What’s one small step I can take to improve my mental health?”

Supportive Relationships

Now more than ever, we know the importance of connecting with others. This goes hand-in-hand with improving your mental health.

But let’s step up our game a little bit here.

Jim Rohn famously said, “You are the average of the five people you spend the most time with.”

Jim Rohn - Average of 5 people you spend time with

Take the time to examine who is in your life right now. 

Who do you spend the most time with?  Do they make you feel good and lift you up or are they negative and complain?

Building relationships isn’t just about dining out with friends. It’s about finding people who enhance your life and creating shared experiences with them.

Admittedly, I’ve been pretty anti-social, and it took a toll I didn’t even realize. Fortunately, I had my wife Anna with me the whole time. She’s really the only person I wanted to spend time with.

But as I jump back into expanding my social life, I’m thinking about the areas of my life that I care about, raising thriving kids, keeping my marriage strong, personal development, music, basketball and coffee. 

People who appreciate these things and can help me get better are people I’d like to spend more time with.

Conversely, I’m also trying to avoid negative people who are judgemental, complain, place blame on others and who are closed-minded.

Invest in your relationship with your spouse or partner too. Date nights and getaways can strengthen your bond and give you the time to work on your relationship. This is much needed especially when raising kids.

Action step: Make a list of the 5 people you spend the most time with (spouse/partner included as well as co-workers). Are they supportive or do they bring you down? Now list the areas of life you care about. Do you have friends in each of those areas? If not, go find them!

Travel / Experiences

Research shows that spending money on experiences can be more fulfilling than on material things.

A study done by Leaf Van Boven and Thomas Gilovich called “To Do or To Have? That is the question” shows that the anticipation of the experience as well as the memories and connections after the fact make happiness from buying experiences last much longer than buying material things.

Anecdotally, this makes sense to me too. I’ve yet to talk to a client that hasn’t listed travel as a financial priority.

The experience doesn’t have to be extravagant either. There are plenty of ways to travel on a budget like taking day trips, doing the touristy stuff in your city, or traveling outside of peak times like weekends and holidays.

It’s ok to spend money on travel and experiences.

Action step: Set up a travel budget and make it a priority. Figure out the very next vacation you’d like to take and when you’d like to take it. Do some research into the cost. Divide the cost by the number of months until you’d like to book it. That’s your monthly vacation budget.

Charity / Giving

Plenty of research shows that giving leads to happiness, including a study by Elizabeth Dunn.

But she talks about how it’s not just giving in isolated circumstances. When giving becomes a way of life, that’s when it provides the greatest and longest lasting happiness.

Giving leads to greater appreciation and gratitude for what you have (even when you feel like you don’t have much). It helps you develop empathy and think beyond your own circumstances.

Philanthropy and charitable giving also brings you into contact with others who share similar passionate causes with you and value giving back to their community. Don’t those sound like people you’d love to spend time with?

give to charity

Action step: Think about a cause that’s important to you. It doesn’t have to be THE cause you dedicate the rest of your life to. Just pick something. Search for organizations in your community to dip your toe into volunteering or giving.

Invest in your kids

This isn’t about focusing on making your kids happy.

More specifically, we want our kids to become fulfilled, independent, responsible, confident, productive and caring. Happiness will go along with that too.

This means providing them with the experiences, support and opportunities to thrive and grow into the best version of themselves.

This doesn’t mean spoiling them with toys and gifts nor does it mean sending them to private school and overscheduling them with activities. 

Spend time with them. Engage with them. Provide them with love. 

Help your kids pursue their ambitions, tie success to hard-work rather than intelligence, and show them how to have healthy relationships. 

Some of this stuff doesn’t cost any money, but it’s ok to spend money on your kids if it will enrich their lives. 

Remember to teach kids about money so they can thrive financially too.

Action step: Take some time to think and journal about the kind of people you want your kids to become as adults. What is one thing you can do to invest in them getting there?

What you enjoy most

Chances are there’s something you enjoy doing that others have told you not to do.

Forget about them!

Take the time and money to pursue the hobby or passion that makes you whole. 

It could be creative or artistic expression, physical activity, building or developing something, working with your hands, learning or reading, or something for just sheer entertainment.

spend money on your favorite hobby

I’ve heard all sorts of interesting things from my clients. It’s the thing they talk about that makes them light up.

It might already have been listed above. But if it’s not, it’s ok to spend money here as long as it is truly a part of who you are and doesn’t break your financial situation.

Don’t deprive yourself of what you enjoy most, make room for it by taking something else out that doesn’t do it for you.

Action step: What’s one thing you enjoy doing outside of work and family? How could you expand that?

Spend money where you spend your time

I heard this great episode on the podcast Millennial Money with Shannah Compton Game. She talks about spending money where you spend your time.

This is different from buying time. It’s more about identifying where you spend most of your time and buying quality items that will make it more enjoyable, comfortable, restful, etc.

One thing I got from it is that although I’m pretty active, the last time I bought workout gear was probably 10+ years ago and it was cheapo stuff.

The episode felt like it gave me permission to step up my game here, so I went out and bought 2 nice pairs of workout shorts.

I also am considering buying a new pillow that will help me sleep better. My head is on that thing for 7 hours a day. That’s 30% of my time! It will be worth it.

Another small thing was buying a $25 rake rather than the $5 one. It was well worth it!

Action step: What’s one area where you spend a lot of time but you’ve made the effort to go cheap there? How much would it cost to step up your game? If you can afford it, go for it!

Your financial future

We’ve already covered some ways to spend money on your future including investing in your health & wellness, career, personal development, etc. 

This is where personal finance comes into play. Make an allocation of your hard-earned money to build a solid financial foundation in the short term and over the long term.

Pay off credit card debt, start saving more in your bank account or retirement accounts, improve your bad spending habits.

Figure out what to do with extra money that will accelerate you to financial independence.

Action step: What is one area that is holding you back financially? Is it debt? Is it sticking to a budget? Make a game plan to remove that obstacle so you can be on your way.

Best things to spend money on

How to spend money on yourself

It might be hard for you to figure out how to spend money on yourself when things are tight, but here are two tips that will help you make room for it now and also over the long run.

Figure out what you should not spend money on

We all have things we spend money on that hold no value to us or are excessive.

When we reduce or eliminate spending in those areas, we make room for the best things to spend money on.

If you don’t know where to start, try out my technique called Keep, Cut Back, Eliminate to free up extra cash from where you’re wasting money while keeping what you enjoy.

Use The 50/50 Rule

This is a framework I created that will allow you to avoid lifestyle creep and take advantage of the extra money that comes in as your income grows.

Anytime, you get a raise, bonus, tax refund, or have money come your way from someplace else, take at least 50% of it and add it to your save, pay off debt or invest goals.

Then, use the other 50% to spend it on something that will help you live your best life.

You see, most couples will either spend it all or save it all. But striking that balance will help you advance your financial goals while also carving out the money you want to spend on things that really matter to you.

How to spend money on yourself

Need help freeing up money in your budget to make this happen?

This is what I do everyday and all day.

I help families who are living paycheck-to-paycheck despite earning a decent income free up the extra cash in their budget to live their best life and reach their financial goals.

It all starts with talking through it together during a free 30 minute conversation.

If you want to spend money on things that will enhance your life but budgeting or working together with your spouse has been a struggle, let’s figure out how to finally solve that problem.

Looking for help but want to do a little work on your own first? Take a look at my free guide: 5 Steps to Cut Spending so you can FINALLY pay off debt and save.