I’m  a financial tightwad. I’m serious. I hate spending money. For any reason. Maybe it’s because I was raised in a financially strapped family when I was a kid. Or maybe it’s because I’m an INTJ. I’m sure we could have all kinds of fun delving into my psyche and figuring out why I’m such a cheapass and why I hate spending money. The point is, I hate spending money. I only spend money when I have to. I’d rather save, invest, or pay off debt than buy things.

This philosophy has served me very well over the years. The few times I’ve gotten into financial trouble over the course of my life are the same few times when I drifted away from this philosophy. I’m sure that’s not a coincidence.

I think everyone, especially Americans who live in a consumer-based culture and economy, need to go out of their way to spend the least money as possible. If you “need” to buy something (or as is more usually the case, you think you need it), wait at least three days, preferably two weeks, before you actually make the purchase. You’ll be surprised how little you need that thing, if at all.

If you do indeed have to buy something, by the least expensive version you can (within reason of course).

If you have a spouse, this will be difficult. Especially if that spouse is of the female persuasion. He/she will often have very different opinions than you regarding the definition of the word “need” and the phrase “least expensive”. If you have children, this is even more difficult, since the emotional compulsion within you and your spouse to spend money on your sweet little angels will be overwhelming.

Regardless, you need to stand strong and fight the urge to spend money. Pay your taxes first, save/invest second, pay your minimal monthly bills third, pay down debt fourth, and if you have any money left over after all that, then you can think about spending it on “stuff”.

The One Great Exception

There are two exceptions to this rule. There are indeed times it is perfectly valid to spend a lot of money, or at least more money on a particular item than you normally would.

The first exception is when you purchase an item that you will use every day and not just for recreation.

The obvious example would be a car. If you have the type of job where you need to drive every day and have no other option, then it might indeed be better to spend $15,000 on a good, reliable car like a two year-old Honda rather than $7,000 on an old Kia that will give you all kinds of problems.

However, there are many examples that aren’t nearly that obvious. Let’s say you need a new mattress for your bed. Again, I’m not talking about when a new mattress would be nice, or when your spouse/girlfriend/boyfriend complains about the mattress. No no. I mean you really, truly need to purchase a new mattress because your old mattress is so bad you can’t sleep properly any more.

You could do what most people do, scrounge up $200-$300, and buy a really crappy mattress. Or you could bite the bullet and spend $800-$1000 on a really nice mattress that really lets you sleep well, is better for your back, and has a fantastic warranty that lasts 20 years or more. 95% of the time I’d say just get the cheaper version, but a mattress is something you’ll be using every day (or in this case, night) and will likely be doing so for many years. So it’s actually a good idea to spend the extra money and get something quality and nice.

The same goes for that chair you sit in at your home office for hours a day every day, that monitor you stare at all day, your shoes, and your belt. Spend the extra money and get the more expensive, higher quality versions of these items. They’ll last longer, be more comfortable, and most importantly, are better for your long term health.

Remember I said not just for recreation. If you sit on your couch every day because you watch so much damn TV (why the hell are you doing that?), you should absolutely not spend $2000 on a fancy new couch just because you’re giving yourself the excuse that you’re using it every day. You don’t need a $2000 couch. I cringe every time I see a family buy one, which is often. It’s usually a poor or middle class family doing it, the exact type of family who really should be spending (or saving) that money elsewhere. (Of course if you’re worth millions upon millions of dollars, then feel free to buy whatever you want.)

No, we’re talking about things you need to use every day.

The Second Exception

Recently there was a study that said most people are more happy, and remain happier long term, by spending money on experiences rather than things. When I read this, I thought hard on this in terms of my own life.

Sure enough, it was true, at least for me. The most times I felt intense happiness, and the most times when those feelings stayed with me for a long time, was when I spent my money on experiences (namely travel) rather than cool stuff. This has been true for pretty much my entire adult life and continues to be so. (When I was a kid, then buying things was indeed more fun. But I think that has more to do with being a kid, especially one raised in a poorer family like me.)

I’m not saying I was never happy as an adult when buying things. I have some great memories of that jet black 1996 Nissan 300ZX Twin Turbo I used to blast around in. Man…that was the coolest car I’ve ever owned, and I’m smiling right now as I remember driving it. It was like driving a Tie Fighter. (I may drive that same make and model again one day…)  But that’s the exception to the rule. Most of my money-spending happiness has come from traveling the world or going on special events with a special someone or my children. If you think about it, you’ll find you’ve probably experienced the same.

Therefore, splurging on a big once-a-year trip with your family (for example) is perfectly okay. Those memories, and that happiness, will stick with you a very, very long time. It’s a good investment in joy.

So spend that money on necessary daily items and special, unusual events. Other than that, be a tightwad and don’t spend money. Your future old self will thank you.