Money is there to be spent. Sometimes we spend because we have to (food, gasoline and utilities.) Sometimes we spend because we want to (vacations, Starbucks and iPads.) Regardless, the only use for money is to spend it.

A friend of mine used to say, "You never see a U-Haul behind the hearse." You can't take it with you, so you may as well spend it; just make sure you have enough until it's time for the hearse. The following are some lessons learned from our spending behaviors.

Retail Therapy

Are you having a bad day? If so, perhaps you go shop and buy somethng for yourself. The jounal Psychology and Marketing reported on a study proving that retail therapy really works. The corollary is to spend very little in order to have no guilt. Additionally, retail therapy is a controlled activity as generally people spend approximately one-half as much as they would if they're celebrating.

The lesson: treat yourself when you're having a bad day, just not too extravagantly. Be discriminate in determining what constitues a bad day.

Pay Close Attention To Prices

The Journal of Consumer Research conducted a study that concluded we pay a disproportionate amount of attention to the leftmost digits; that's why $4.99 seems much less than $5.00.

The lesson: always round up when looking at the price.

Hooray For Payday!

Payday seems to burn a hole in our pockets. It's analogous to the phenomenon when home prices rise (something we haven't experienced for quite a long time now): we feel richer. Most people spend more on payday.

The lesson: stay away from the stores on payday, especially those that entice you to buy discretionary items.

Doing A Balancing Act

Sometimes we'll eat something that's good for us, like broccoli. (It has to be good for us; it tastes awful.) We feel virtuous and so we then balance it with a vice, like a piece of chocolate cake. Same thing with spending; we may even pass up buying something we don't need, so we balance the good behavior with bad behavior.

The lesson: if you need to shop for necessities, like groceries, then make a list. Stick to the list. Make sure the list has only virtuous things on it: those things you absolutely need and no more. If you don't stick to the list by balancing the virtuous spending with spending on vices, you'll overspend.

Can Money Buy Happiness?

In a word: yes! If you're making more than those around you, then you feel more successful; money isn't everything, but it gives you access to more things, such as better health care and retirement. However, sometimes we're making money, but we aren't happy. Why?

The lesson: perhaps you haven't set goals. Goals should be smart; as you're working towards achieving them, you develop a sense of accomplishment. Once accomplished, you're regain happiness.

Whatever you're spending your money on, you should be spending conciously. Ask yourself how long you had to work to earn the dollars to buy the item.

What are some of the lessons you've learned from your spending?

CategoriesSaving Money