Read any personal finance site or expert’s opinions, you are sure to see the following:
you should save your money.
reduce your expenses.
make sure you spend less than you earn.
Well, I agree that this is good advice, but only if people follow it. Human brain is highly irrational, especially when it comes to money and you might want to buy certain things that make you happy. Your friends might call them as your weaknesses. These might be something as simple as lots of stickies or a nice pen or that expensive notebook that you never will use more than 2 or 3 times, etc. (btw, these are all my weaknesses).
It need not be so silly, it can be a weekend out-of-town with friends, nice candle light dinner with your significant other, a nice smart phone when your old one is broken, etc. These are things that are expensive, but gives you more happiness and joy than the money you spend. Just imagine going to a movie with your family/friends and then eating out – everyone enjoys the day and sleep happily. Sometimes such memories will stay with you for a long, long time.
Buy things that make you happy.
There are also other types of things which I would say are very important that you spend your money on – investing in yourself. No, this has got nothing with money, interest, inflation, etc. It is the things that you learn from others and which will make you better in your professional and/or personal life in general.
It could be books that you buy and read, the Yoga class you joined, Gym membership to keep yourself fit, even getting high quality dresses for your office, etc. If there was one thing that my dad didn’t think about buying for me was “books”. Whatever book I ask, he would get it for me – and the things I learnt from it surpass any returns that he would’ve gotten by putting that money somewhere else.
Other things that I have invested in is my health trying to get fit, books/magazines that I read and then online courses. I have joined a few online courses, about investing, self-improvement, entrepreneurship, etc. The few tens of thousands of rupees I spend today if it helps me in earning even a lakh in a year, is a great investment.
Invest in yourself.
There are other things doesn’t improve you personally, but are equally important. For example, if you are an entrepreneur, it could be a lawyer you hire to set up your company, the accountant who understands all the financial things better than you do, etc. All these are not expenses, but investments that you do for your business or yourself. If you are just another salaried person, one important investment you could make is getting the help of a good financial planner.
I know way too many people who were mis-sold investment products and who don’t know the difference between investment and savings. Even I was in a similar situation and decided to learn things from books and the internet – but if you are not interested in starting from the basics, you would do well by hiring a good financial planner. Remember your insurance agent isn’t a financial planner.
So remember these two things which you can and should spend your money on:
- things which makes you/your close ones happy
- things which will improve your personal/professional life in the long-term.