When to Spend

by Apr 15, 2023

IF YOU HAVE READ enough HumbleDollar articles, you’ve probably noticed that frugality has played a major role in the financial success of many of the site’s writers. Peruse the article comments and the site’s “Voices” section, and you’ll find that readers often share the same thriftiness. Frugality is also a key theme running through many of the 30 financial life stories in the forthcoming book, My Money Journey. Sure enough, I highlighted frugality in the essay I contributed to the book, as well as in my most popular HumbleDollar article to-date.

But while we might be good at saving, we often aren’t nearly so successful at spending. We find ourselves investing quite a bit of emotional energy in every spending decision—because we feel so acutely the opportunity cost of parting with our money.

For those in the accumulation phase, every splurge means less money toward building their nest egg. For those in retirement, a big expense means a big drop in their portfolio balance. Could that mean a greater chance of running out of money? At a minimum, any spending takes away from what heirs would otherwise inherit. 

An awareness of opportunity cost is a pillar of smart financial management. But when the time comes to splurge, how can we feel less conflicted and freer to really enjoy ourselves? As I reflect on my own ongoing attempts at balance, I find that I’m most at peace with decisions to splurge when I can confidently answer five questions.

What am I really paying for? My capacity to enjoy luxury goods and experiences follows a curve of diminishing returns. Perhaps the $50 steak tastes better than the $15 steak, but I confess my palette is not sophisticated enough to taste the difference in the $100 version.

I don’t want to pay extra just for the privilege of being able to say I did. When I feel like I’m paying a premium simply for access to the abstract concept of luxury—but not something of substance I really care about—I have a hard time relaxing and enjoying it.

But I also notice my tastes have adapted over the years when I’ve given new things a chance. For example, I once considered the Omni Grove Park Inn in nearby Asheville, North Carolina, to be in this category. Then I received a generous gift card to go there, so Sarah and I gave it a shot last summer.

The experience won us over. We’ve already been back again. The day passes to the spectacular spa complex were $200 a pop and it took $450 for one night in even the smallest room at the historic inn. Still, it was worth every penny.

Do you enjoy such indulgences? Aim to be light-heartedly honest with yourself. It won’t do you any good to be too uptight. In fact, that may be a sure route to spoil the pleasure from such spending.

Will it suck me in? Do you remember the story If You Give A Mouse a Cookie? A boy gives a friendly overall-clad mouse a cookie, which leads the mouse to ask for a glass of milk to wash it down. Then comes the request for a straw, then a napkin, then a mirror to check for a milk mustache. The dominos continue to fall until the mouse has exhausted his friend with a full day of requests.

When I’m assessing a potential splurge, I’m vigilant about avoiding that kind of trap. I’m looking for something I can enjoy free of any further encumbrances. If one purchase will undoubtedly lead to another, I’m wary.

I tend to feel that way when I go into one of the specialty mountain outfitters that are plentiful here in East Tennessee. I usually walk in open-minded. I’m not an avid outdoorsman by any stretch, but I do love and appreciate nature. “Maybe I’ll find something for my next hike,” I tell myself.

But then I stumble upon the pricetag for what appears to be a long-sleeve shirt, but it’s actually a $100 ultra-performance base layer. I immediately start extrapolating that rate-per-garment over an entire outfit. Then I decide nature will be just as much fun in ordinary clothing.

A house is the ultimate high-stakes example of this phenomenon. You have to commit to the mortgage, pay the closing costs and incur the moving expenses. But then the real spending begins: You’ve got to furnish the house, decorate it, landscape it, insure it, secure it, outfit it with appliances and technologies, serve it with utilities, maintain and repair all that, and then do it all again because you’ve already tired of what you picked out the first time. For this reason, a house is the worst kind of splurge. If your next home feels like a stretch, it’s best to let it go.

Does it make my wife happy? I’m not saying she has to enjoy every expenditure as much as I do. But if she has reservations, I’ll pass. I know she wants what’s best for me, and I’m not afraid to admit that sometimes she knows better than I do. Besides, I value peace in our home and in our marriage more than I value anything I could possibly buy.

One possible exception: If I can sense that she’s fine with the object of the spending but hesitant about whether we should part with the cash, I might present some rationale for the purchase in an attempt to put Sarah at ease. If that still doesn’t work, it’s time to drop it.

Does it sound like me? Don’t get me wrong: I think trying new things and taking novel adventures can be great, splurge-worthy fun. I just don’t want to give in to every passing whim. Throw in a few nights’ sleep between the initial spark and the decision to spend the money, and I often find I’m simply no longer interested in the bright, shiny object that caught my attention. I find I have less buyer’s remorse if I splurge on things that I’m confident will have staying power.

A great example is the $10.94 I pay every month for my premium Spotify account. Maybe that doesn’t sound like much of a splurge, but if I could express how much I loathe paying for monthly subscriptions, it would. I try to avoid these monthly bank account drains, which is getting harder and harder to do.

Still, I gladly pay every month for music. Why? Music has been important to me all my life, and I’ve never enjoyed it more than now. Previous generations couldn’t have fathomed the luxury we now casually regard as standard—virtually every album from every artist available at our fingertips.

I can conveniently binge-listen to the discography of my longtime favorite band Switchfoot. If I discover an interesting new album while reading reviews in Bluegrass Unlimited magazine, I can immediately listen to every track. I can sing along with my favorite worship music, which improves my attitude like nothing else. I can bring multiple generations of our family together to reminisce about favorite classic country tunes. I can DJ an impromptu dance party for my girls. That $10.94 a month is a steal.

Will I make memories with loved ones? I’m not implying that it’s necessary to spend a lot of money to make memories. Indeed, many of my favorites didn’t involve spending much at all.

But every so often, circumstances force me to make a choice.Maybe it’s an invitation from friends or family, and I have to decide: Will I spend the money and be part of the experience or will I hold off for another day?I’ve only taken 35 trips around the sun, but I’ve known enough life to realize that time is short. That’s why I’ve become much more likely to say “yes” in these situations—because making memories with family and friends is what I want my splurges to be about, and I know I’ll only get so many chances.

This is how I ended up happily shelling out $190 for a single ticket to a college baseball game last summer. My Tennessee Vols were playing for a berth to the College World Series, and my usual baseball game crew—my brother-in-law and a few friends—had found tickets for us. I couldn’t say “no.”

It’s why I paid $670 to renew our Dollywood passes for the upcoming season, even though we’ve been to the theme park probably 20 times over the past few years. With each visit, we have the pleasure of reliving old memories and making new ones—and I want to experience that with Sarah and our girls as many times as possible.

This article originally appeared on HumbleDollar.com.

About Matt Christopher White
Matt’s heart beats to infuse the Word of God into real life. He wants to help you form a life-giving, practical theology of money and equip you with the money skills and knowledge to live it—right where you are.


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