The Old Way of Thinking
Many of us are trapped in an old way of thinking about money. That way looks at money very flatly. There are two things to do with money: spend it or save it.
Looking at money this way often makes it feel like there is a moral connection each time we use our money: if we spend it we feel bad; if we save it, we feel good.
Unfortunately, thinking this way causes a lot of unnecessary guilt and problems. If our car breaks down, should we not spend money to fix it? If we have a chance to improve ourselves, should we not spend money to take it? If we see someone who is in need of help, should we not spend money to help them? Or should we save all our money, live in a hovel, lead a colorless life and expire with a bank full of cash?
There’s a better way to look at money.
Money Is a Tool
Money is a tool. Like a hammer or a screwdriver, it’s something that we use for a purpose. Richard Branson, a billionaire who built the Virgin brand, was given a loan by his aunt to start his business. When she gave it to him, she told him “money was for making things happen”. We need to think of money this way.
There are four main ways to use money and using it wisely on adventure-based spending is the best way to have it enhance your happiness.
(You may be asking, can money even buy happiness? Yes! Research has found that people earning at least $75,000 are happier than those who don’t. Being able to afford basic necessities greatly impacts one’s happiness. But, research has also found that how we spend our money can affect our happiness as well.)
Toys, Tools, and Experiences
When we buy toys, we don’t typically improve our happiness. Giant TV’s, loads of expensive jewelry, or endless stuff that clutters up our closets can actually add more stress and decrease our happiness. Using money to buy toys often leads to disappointment, although not always (more on that in a second).
Another way to spend money is to buy tools. These are things that enhance our lives. Learning courses, a camera to learn photography, or an iPad to follow along with a cooking show in the kitchen. These enhance our lives and make us better people, although there are three things to remember with tools:
- Use Them: If you buy a tool, you must use it. Tools only enhance happiness when they are used, otherwise they trigger guilt.
- Less Is More: When I really started sticking to guitar practice, I became guitar happy. I ended up with about 6 or 7 beautiful guitars. They were gorgeous in sound and looks. But I could never play them all. They became a guilt trigger. I ended up selling most of them. I now have an electric and acoustic that I play every day and a compact guitar for traveling as I travel often. Use only what you need.
- Work Your Way Up: When I first started playing guitar, I bought a guitar that felt like it was made out of thick paper. As I improved I upgraded. With my video business I started with a photography camera (DSLR) that did video. Later I upgraded to a better DSLR. Eventually I moved to a full video camera. Making sure you use tools also means to start with tools at your level.
Finally, one of the best ways to employ adventure-based spending is to spend money on experiences. This is where people record the most happiness. You can buy a great TV that you will use for ten years, but, unlike that trip you took to the Bahamas 20 years ago, you won’t think about it after it’s gone.
Sometimes an experience might be a “toy” if it stands out. For instance, instead of having loads of jewelry, having just one necklace that you bought on that trip to London provides a wealth of joy from all the memories trapped inside.
To have an adventurous life you will want to use adventure-based spending in a way that improves your life. Some people waste money on fast food and eating out every day or buying junk. That’s no way to live an exciting life. Others spend it on toys that pile up in their house and cause them more distress than happiness.
But some people buy tools that enhance their lives and make their lives better. They find ways to use money to improve themselves and fill their futures with possibilities and adventure.
And they use money to have experiences that they remember for years to come – time with family and friends and enjoying life and building lasting memories.
That’s the way to use money wisely: on adventure-based spending to live a life of happiness and fulfillment.