You’re Not Wasting Your Money on “Stuff.” But Is That Enough?

Do you know what you spend your money on? Are you happy with your spending priorities? Do you buy precious few “things” and spend most of your money on experiences (including food)?

My clients go through an exercise exercise in which they track how much they spend in the course of a month, and on what. Though there’s variety at the edges, the results are similar across all my clients:

They spend a lot on:

  • housing (be it mortgage or rent. If you’re in a tech hotspot, spending a lot on housing isn’t much of a choice.)
  • food (groceries, meal-prep delivery services like Blue Apron, and eating out)
  • travel and other “fun”
  • subscriptions (ex., NetFlix, Spotify)
  • self care (ex., therapy, exercise memberships)
  • time-saving conveniences (ex., Instacart, house cleaning)
  • Amazon (Yep, it gets a category of its own here. It’s so hard to know exactly how that spending breaks down because people buy everything on Amazon. And it is often a large % of their monthly spending)

They spend very little on:

  • clothes, hair, nails
  • jewelry
  • a personal car
  • furniture
  • tchotchkes

Spending Money on “Things” Doesn’t Make Us Happy. Is It Enough to Spend Money on “Not Things” Then?

We probably all know by now that spending money on “stuff” doesn’t make us happy. Looking at those lists above, it’s clear we’ve swallowed the evidence-backed kool-aid that buying experiences makes us happier. And I am delighted to see the shift away from “stuff.”

One of the books I regularly recommend to people is Happy Money: The Science of Happier Spending. (I reviewed it on this blog.) It describes 5 ways to spend your money that will actually make you happier:

  • Buy Experiences
  • Make It a Treat
  • Buy Time
  • Pay Now, Consume Later
  • Invest in Others

Even without reading the book, many people have clearly embraced “buy experiences” and “buy time.” Which, again, is a better use of your money than “buy stuff.”

Our spending habits are way different than they were 20 years ago, thanks to a variety of factors:

  • generational shifts
  • our increased understanding of behavioral finance (what makes us happy and what doesn’t)
  • the changing cost of various goods and services (for example, clothing is way cheaper than it used to be)
  • the dominant tech culture (all about Big Life Experiences, FOMO, tech gadgets, awesome ethnic food, etc.)

I say this based on my own observations, as I can’t find any research out there focused narrowly enough on people in the tech sector, though there’s plenty of research about changing spending habits in the population at large and the shift towards spending (sometimes a lot of) money on experiences.

But I’m starting to worry that people think “not buying stuff” is sufficient. That they think “buy experiences” and “buy time” are clear, unmitigated goods. I’m starting to worry that people aren’t taking that necessary step that comes after “not buying stuff,” which is: “and then I save the money I don’t spend on stuff.”

A Dollar Spent Now is One Fewer Dollars You Have Later.

I do not mean to be judge-y here. Hell, when I look at my own household expenses, my top expenses are housing, food and travel. However, more important than my ability to identify with my clients’ spending habits:

It doesn’t much matter, for the sake of your financial future, what you spend your money on. It matters how much money you spend and, the flip side of that coin, how much money you save.

And you’ve got dreams and goals for a good life! Whether you know the specifics of that Good Life now or not, you will draw that picture of Your Good Life eventually, be it Agile- or Waterfall-style. 

The clients I work with do a good job of saving at least “enough” for the non-negotiables: emergency fund and eventual financial independence. Beyond that, it’s not my place to tell them to save more now so they can spend more later. That’s a values choice, importantly, their values, not mine.

I simply don’t want people to get so wrapped up in this newfound wisdom about “stuff versus experiences” that it distorts how they understand their financial choices.

Be Clear on the Choices You’re Making.

If you work in tech, you likely have a salary or stock compensation that is higher than anything you expected growing up, anything your parents made at your age, and higher than many of the people you grew up with. This is an amazing opportunity to build financial strength. And through that, to give yourself a level of choice many people in this country can only dream of.

And “choice” is the key word here. If you’ve got the basics of your financial security covered, you can absolutely choose to spend your money on whatever you want, now or later. And we know that, to some extent, there’s a “right” way to spend. Taking a friend out for coffee brings us more lasting happiness than buying another sweater.

But even if there’s a “right way” of spending money, spending the right way isn’t free. It’s still money you won’t have to pursue goals in the future. So, when you’re spending money, I simply want you to be clear:

Is that a choice you want to make?

Do you want to make sure you’re not wasting opportunities your job in the tech industry gives you? Reach out to me at meg@flowfp.com or schedule a free consultation.

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Disclaimer: This article is provided for general information and illustration purposes only. Nothing contained in the material constitutes tax advice, a recommendation for purchase or sale of any security, or investment advisory services. I encourage you to consult a financial planner, accountant, and/or legal counsel for advice specific to your situation. Reproduction of this material is prohibited without written permission from Meg Bartelt, and all rights are reserved. Read the full Disclaimer.

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Flow Financial Planning, LLC is a Registered Investment Advisor in the States of Washington, California, and New York.

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