Emotional Fulfillment and Financial Success

Recently, I read an excellent discussion on why we don’t save money. I originally intended to include it in my weekly roundup this week, but as I began to write my thoughts on the topic, I realized that I had a lot to say on the issue.

Erica argues that we spend primarily for emotional fulfillment and that the message that personal finance writers send out is the wrong one:

We have failed. Instead of teaching kids that their worth comes from within, we’ve given in to the marketing bandwagon’s “emotional blitz” and bought stuff that we thought would make us happy. Yet we’re just as depressed as we ever have been.

Personal finance bloggers and financial columnists miss the mark when they write, “JUST SPEND LESS THAN YOU EARN!!” It’s not about that. Those daily lattes the financial columnists love to target as a key component of being frugal…when we buy them, we aren’t thinking about the $4. We’re thinking “This latte will make me more happy (somehow).” Spending less than we earn won’t make us happy in the same way, and that’s why, despite the plethora of financial advice available, most of us are still in debt.

The Problem with Achieving Personal Financial Success

Spend less than you earn is an easy mantra to repeat

It’s factually correct: by doing it, you will eventually get financially ahead. It’s also incredibly simple – anyone can spend less, and many people can earn more.

Personal finance is not just about dollars and cents

It’s about emotions and how we piece through the daily dilemmas in our lives. It’s about figuring out our goals and what the most important aspects of our lives really are. Doing a budget and living frugally doesn’t mean much if it doesn’t open our eyes to what our real values are.

The average consumer gets emotional fulfillment out of spending

The guilt doesn’t come from the spending, it comes from the bills that come in later. People don’t feel bad about the purchase of a flat panel television – in fact, it’s usually a rush. The bad feeling comes when the credit card statements roll in and the paycheck isn’t big enough to cover it.

The separation of spending and feelings creates problems for many

This is true for myself, as well. Buying that $4 latte does bring happiness into my life, and it’s often hard to deny that little burst of joy. Many people say it’s worth it – those are the people who constantly encourage you to live a little.

Unfortunately, those are the same people who go home and dread looking at their bills, spending sleepless nights worrying about paying for everything and knowing that they’re just one false step from a financial meltdown.

Why We Have this Problem and How to Solve It

Why do we derive an initial happiness from spending, followed by a later guilt? Why can’t we balance it all out easily?

A disconnect between spending and work

All of the money we have is the result of our work (or of the love of others). We invest huge amounts of our time doing things that aren’t as fulfilling as we’d like. I’d love to be in a situation where I could work in the garden all morning, drink lemonade and have a nice sandwich for lunch, work on my art in the afternoon, then prepare a hand-made artisan dinner for my family, but instead I work for others. At the end of a day, I go home feeling exhausted and spent, wondering whether it’s really worth it.

Here’s a shocking little experiment that somewhat proves my point. Figure out your net worth – the complete stock of all of your assets in your life minus all of your debts. Then figure out how many hours you’ve worked in your life. Divide the net worth by the hours you’ve worked. Over your lifetime, that’s roughly how much an hour of work is worth to you. For most people, that dollar value is frighteningly small – often less than a dollar per hour. Then, take that dollar amount and use it to see how many hours you’ll work (or have worked) to afford that television in your house, or that car in your driveway. Painful, isn’t it?

As our money becomes more and more abstracted from our work, it becomes harder and harder to really put personal value in that money. If we worked and were given food in exchange for that work, the connection would be obvious. Even working in direct exchange for cash in hand at the end of the day makes it clear. But when we work and have that money direct deposited, then we use our credit cards to buy things and use electronic transfers to pay those bills, that’s a lot of abstraction and the connection isn’t very clear. Since we’re unclear on the connection between a dollar and an hour of hard work, it becomes much easier to spend that dollar.

The key to solving the problem is figuring out how to connect the two feelings together

That is, the work and the money, the pleasure of spending and the pain of the bills. Unfortunately, there is no easy way to do that – and no method that works for everyone.

I think of it as a light switch in a darkened room. You’ll flail around in this room for a while, spending wildly, until you realize that you need help. So you start searching for the light switch, carefully and deliberately, but your finances are still in the dark. Eventually, you find the switch – and light floods the room. You’re suddenly able to see the connection between the two and it becomes much easier to keep your wallet in your pocket.

For me, the search for the switch didn’t take long – all I had to do was look into a baby’s crib and see my son looking up at me. For others, it takes a while – they hear the spend less than you earn mantra, but it doesn’t mean anything until they find their own switch.

In fact, today I often feel more emotionally fulfilled keeping my wallet firmly in my pocket. I no longer have bills screaming at me. I’m not worried about my family’s future. I know where I’m going and the picture as a whole fills me with a deeper joy than that little rush of happiness from buying a latte. On the occasions when I do indulge in a little treat, there’s no guilt later.

That’s a goal worth working towards.

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  1. Katie says:

    I connect with this statement: “In fact, today I often feel more emotionally fulfilled keeping my wallet firmly in my pocket. I no longer have bills screaming at me. I’m not worried about my family’s future.”

    My entire life has been spent around parents who (for one reason or another – mainly layoffs) were either well on their way to paying off debt, or swimming in it. They have always kept their head above water, but seeing that struggle growing up has made me realize just how worrying unstable finances can be.

    In complete honesty, if my finances are doing poorly, I stay up at night worrying about them. The peace of mind that having an emergency fund gives me (and knowing that I’ll be able to pay off my only credit card by the end of the month – for the first time ever) helps me sleep at night. THAT is my motivation.

    For others, it isn’t so easy. My struggle is not over-spending when I go out of town. I’m working on it!

  2. Luke says:

    Do you think that some people find their worth in not spending or being frugal? Can this be just as unhealthy?
    “I know where I’m going and the picture as a whole fills me with a deeper joy than that little rush of happiness from buying a latte.”
    I think that this suggest that your fulfillment is not coming from within. You are getting the same feeling people get from buying the latte by not buying the latte.

  3. kell@confessionsofachocolatelife says:

    I too can understand how spending money can fill a hole. That is the same way I was about a year ago. However, I have come to realise that it is much more fulfilling to know that you are financially secure, and also know that you are putting your money towards something that is important to you.
    I have been reading this blog for well, about a year also! I have loved reading it and it helps me stay on track when I am faced with financial challenges. Thanks Trent.

  4. ericabiz says:

    Hey Trent,

    I’m working on a followup for that blog post (saved as draft currently), and I think your link just spurred me into action! :)

    I have to say, heading over to your site and finding a whole post about my blog post probably did more for me emotionally than most of the things I’ve bought in my life. Now that’s an interesting thesis…I will have to consider that more.

    Thank you for the excellent post and commentary!

    -Erica

  5. KC says:

    Buying is similar to eating a candy bar – you get this rush and then, boom, you’re down, down further than you were before you ate the candy. To some degree I equate spending with self-esteem – it took me a while to figure this out, but most people spend to make up for something else – a lack of confidence in some area of their life. That’s why even people with high incomes can have debt. They look around and see people with more and they want to project that image, too, eventhough they really can’t afford to.

  6. Shan-Oh says:

    Trent – your observations about emotions hold true for food as well. We all know that eating less than we burn each day will cause us to lose weight. Very simple…and yet most Americans can’t seem to keep the weight off.

    I am intrigued by your idea that we spend so little time doing fulfilling things at our ‘day jobs’ that we substitute material things to make up the difference. Food for thought for me and my hubby tonight!

  7. Steve H says:

    I don’t think it’s necessarily about “spending less than you earn” as much as it’s about “only spending what you earn.” If you do the latter you will never have debt. Emotions have a place during the act of a purchase, but if you’re pulling out a debit instead of credit card (and otherwise have no debt) then by all means go for it if you want. I have a friend who blows his paycheck every week on frivolous things (ie Playstations, DVDs, traveling, eating out) but he always pays cash or by debit card for everything. Always. Those with a little more ambition decide they’d like to live on more than Social Security (whether it will be there or not is another discussion) or maybe that they’d like to retire before the age of 70. All a matter of choice. Many of us here are likely already in the hole of a debt to a degree and are working on digging out. Once out of the hole, it’s up the individual if they want to live on what they earn, or live on less than they earn and build wealth. I can see some logic in both.

  8. Frugal Dad says:

    The connection between money and work is what made Your Money or Your Life such a powerful read. For the first time in my life I have actually started calculating how much life energy goes into my purchases. Thinking back to past purchases, and my lower income when I just started out, it’s no wonder I got into a financial hole!

  9. 1stopmom says:

    Wow, it is like you are reading my thoughts. You are describing me. I will be glad when I find my switch. But I do understand it will take time.
    Thanks

  10. kaffeecat says:

    I’ve learned to channel the flipside of this. When I save a little bit ($2/off this, or I find a gallon of expired milk and the grocery store gives me a fresh one for free) I tally it up mentally, and knock it off from the negative feelings I have re: a recent large bill or wanting to get pizza one night of the month. I.e.: two pizzas came to $17 for everything, that’s $8.50/pizza but created a lunch the second day. I’ll mentally deduct the $5.69 I saved getting the free milk, and will feel better. Even better is a month of frugal saving, bringing coffee to work, bringing lunch to work…and realizing I have enough to put some into my savings, and looking at the figures change when I pay down debts or put something into savings. These things give me a rush. I had to call my husband at work the other day when I realized, in crunching the numbers, that he had paid his cc debt down $1K over the past 4 months. That was great! That also made me say ‘Let’s get some pizza tonight.’ Granted it was the smallest size + coupon for 12.99 + all the fees. But we earned it. I get really excited when I find meat or bread or produce that’s $2 less than it usually is. I think that’s it….I’ve just found a new hobby to get geeky about. It’s all about transferring that emotion to something positive and practical. I’ll spare you how thrilled I am to discover all the cool stuff on PBS, and how much I really don’t miss cable junky TV at all. I feel like my brain can breathe healthfully now. It’s simplifying not deprivation.

  11. K12Linux says:

    I get a kick out of how many commercials these days say NOTHING about the product. They just hock how it will make you feel.

    For example, “When you turn on your car does it return the favor?” I know nothing more about the vehicle now other than an implication that driving it will be exciting. Really? And while I’m sitting at my desk working to pay the bill will I be having an exciting experience too?

    I totally agree about the disconnect between work and spending these days. Sometimes dividing the price of something by how much you make (take home) per hour can help. Then imagine you had to work that much time BEFORE you could have the item. How exciting would that cappuccino be if the shop owner said, “Work for a half hour first and it’s yours.” Somehow shelling out 1/2 hour worth of pay doesn’t seem nearly as dreary as actually working that 1/2 hour.

  12. Joe says:

    I feel compelled to point out that not at people dislike their careers as suggested by your statement – “We invest huge amounts of our time doing things that aren’t as fulfilling as we’d like.” Hopefully this time you will not accuse me of attributing my beliefs to you.

    Anyways, perhaps the take-away message of this should be that people should choose careers that truly enthrall them, that way they will not feel that they are doing something which is not fulfilling or satisfying. A famous phrase comes to mind – “if you love your job, it’s not really a job.”

  13. justin says:

    Well said! This is one of the best personal finance posts I’ve ever read.

    I’ve tried to explain the point about the “light switch” several times, but never as effectually as you have here.

  14. Jen says:

    I hate direct deposit, I have no interest in paying bills online, and I use cash as much as possible. Now I know how to explain why. Thanks!

  15. Jim says:

    Kick-ass blog. Your points (as well as the commenters above) are all spot on. But..Madison Avenue has made a mint by telling us “if we buy this car..If we drink this beer…If we wear these clothes..” we will be happy, fulfilled and the envy of all around us. It’s not surprising that there’s so much anger around us these days. We all bought into it only to find out we’ve been duped.
    The schools (from Kindergarten on) need to do a better job with a) Financial awareness and b). debunking the bull (including the upcoming election). Only then will the populace be in a better financial position. “What do you mean it’s bad to finance 130% of my house’s value….”

  16. George says:

    I did the exercise of net worth divided by hours worked. Seems I managed $10/hr, which isn’t as bad as I would have guessed!

  17. Sandy says:

    For myself, I place more value on being out of debt, than I do on acquiring more things/stuff, and so that’s my motivation – to remain debt-free. So I willingly live within my means, and if I can afford to buy something, I do and don’t feel guilty about it. But if I can’t afford to buy something without going into debt, then I won’t buy it because being in debt to me would be more painful than the pleasure I’d get from making the purchase. I’ve been in debt before and don’t want to ever go back there. And so if the neighbors do this or that, it just doesn’t phase me, or I’m not jealous at all because my value of being debt-free is more important to me than acquiring debt. So instead of focusing on what I can’t afford, I look around and appreciate what I do have and take a new interest in that.

  18. Sil says:

    “Many people say it’s worth it – those are the people who constantly encourage you to live a little.

    Unfortunately, those are the same people who go home and dread looking at their bills, spending sleepless nights worrying about paying for everything and knowing that they’re just one false step from a financial meltdown.”

    I’d started to write out a long response to this but I think I’ll cut it down to just this. The way this is phrased, you make it sound like there are only two options: Frugality and Spendthriftiness. That there is no possible way that a person could both embrace ‘living a little’ and still have a financially sound lifestyle.

    I call shenanigans.

  19. When I buy something I almost always am thinking about how much work it took me to buy it. Maybe that’s why frugality is relatively easy for me.

  20. “Here’s a shocking little experiment that somewhat proves my point. Figure out your net worth – the complete stock of all of your assets in your life minus all of your debts. Then figure out how many hours you’ve worked in your life. Divide the net worth by the hours you’ve worked. Over your lifetime, that’s roughly how much an hour of work is worth to you.”

    This is such a wonderful idea, thanks Trent. I love to look at the big picture, and as a salaried worker (who cannot, at least in the short term, earn more money by working an extra hour), I do in fact feel a bit disconnected from the value of my work. This exercise helps to put it in perspective.

  21. Lurker Carl says:

    The disconnect between work and money is amazing. Watch folks at a typical shopping mall, merrily exchanging one week’s labor for some bangles and beads. Would they accept identical items directly from their employer in lieu of money? I doubt it.

    Speaking of love, work and money – I see so many young adults pursuing degrees to obtain careers they love. But the cost of the schooling is difficult to repay because they chose fields which pay dismal salaries. It’s one thing to love what you do, it’s another to make a living at it.

    Learn to find pleasure in attaining goals instead of material goods. How would you rather pursue your future, free to capture your dreams or trapped in a nightmare of debt? Money doesn’t insure happiness but it can insulate you from misery.

  22. Epher says:

    There’s a book entitled “Happiness” by Richard Layard which examines the causes and consequences of happiness. One interesting concept was of ‘habituation’. We get adapted to material things, and after the initial high of buying something, we get used to it, and return to the original set point. So it’s rather like a drug addiction, we need to get more of it to be satisfied.

    We would instead find more emotional fulfilment in pursuits that we don’t get habituated to so easily. Like meaningful relationships, charity, and personal development.

    Really enjoy your articles!

  23. speedy says:

    “But when we work and have that money direct deposited, then we use our credit cards to buy things and use electronic transfers to pay those bills, that’s a lot of abstraction and the connection isn’t very clear.”

    The connection is very clear for some of us. I would never live without direct deposit, credit cards, and electronic transfers. For me, it is a health and safety issue. I do not feel safe approaching a bank machine, and handling paper money makes me ill — literally, because I had a job where I was required to handle cash, and I had colds all the time. Since I left that job and went cashless, I have rarely been sick.

    What abstraction? Money is money is money, whether it is a note printed by the Federal Reserve or a number in my checkbook. I know how much I have in the bank, and I know my budget when I go shopping. Once the switch was flipped for me, it was flipped. Even though I use credit, I never blow my budget. I also earn rewards on the things I would buy anyway (food, gasoline, etc.), and I add the rewards to my savings and Roth IRA.

    Considering how many people are shopaholics and make bad choices, you obviously have a good point! Your exercises (and also those in “Your Money or Your Life”) can certainly help people find the switch easier! Great article!

  24. Jennifer says:

    I have a little bit of a different perspective on spending, money, etc. I am an ER nurse…..and..well….anyone in emergency medicine kind of have a different perspective on just about everything.

    I have seen many many people die. I have seen many people’s lives change in nanoseconds. No one yet, in my experience regrets not buying more lattes or flat screen televisions. No one yet, in my experience regrets not putting more in their investments or retirement accounts either. What I do see people regret is time wasted and dreams not yet pursued. That is what I regard as the ultimate reward for frugality….more time. However, going overboard is just as harmful. For example, while, I don’t have credit card debt, my husband and I do have substantial student loans. No we could scrimp and save and pay those off early…but if it means missing a month in Italy or skiing in Utah or scuba diving in Belize……what kind of life is that? I am too reminded every day of young healthy in their prime people who lives are changed or ended by something as simple as teenager deciding or reach for their cell phone while driving. Don’t ever assume “you’ll get to it someday” or “I’ll travel when I have no more debt”

  25. mike says:

    This is one of your best posts. Excellent job.

  26. Lisa Spinelli says:

    Great Posts. I’m 49. I have had some form of job (paper route, babysitting, at the beginning) and my own bank account since I was 12.
    This new generation has it a bit soft if you ask me! Lisa

  27. ngthagg says:

    Jennifer: Interesting comment. It’s good to remember that careful planning and money management doesn’t guarantee a leisurely retirement. It makes me glad that I’m quite happy living a frugal life and don’t really miss scuba diving in Belize or anything like that.

    Trent: For me the disconnect has always been between now and later. The farther away later is, the less real it seems, and the less value I put on it. It takes something very signifcant to make me realize the future is just as real as the present.

    I think when it comes to change, the emotional aspect helps us understand why, but we still can’t forget the how either. It is worth repeating “spend less than you earn” because it tells us that change is possible, and not even very complicated at that.

  28. Dariusz says:

    The best one on this subject I’ve ever heard goes like this: If you think you’re not happy because you can’t afford to buy a Mercedes, think about it this way – if Mercedes didn’t exist at all, I mean if Mercedes had never been even invented, would that also mean you would have to be unhappy? In other words, why do you think that happiness doesn’t exist without a Mercedes?

  29. Aurora says:

    wait i don’t get it… doesnt my net worth already include the subtraction of the money i spent on “that television in my house or that car in my driveway”? if i start with $0 net worth and work 10 hours for $10/hr to earn $100, then spend $90 on coffee, i’ll be left with a net worth of $10. then by your reasoning my real hourly wage is $10/10hrs=$1/hr, so the coffee cost me 90 hours of work… but i was able to make the purchase after 10 hours, how does that work?

  30. Susan Morrill says:

    I have to agree completely with your comment about the disconnect between money and work. For the first time in my life I’ve been working part time to make ends meet. It’s mostly a cash job (bartending) so I have immediate cash in my pocket when I leave. It’s amazing to me the feeling of accomplishment I have with $200 in my purse. It’s so very special money because I feel the pain from working a 6 hour shift on my feet. I wonder how differently I would look at my full time job pay, if I received it all in cash. When I go to the store it’s so much easier to decline a purchase when I khow how hard I worked for the money. Before, I never saw any of my full time job money – it was just direct deposited and then I used bill pay for my bills. There’s a very strong connection to my money now. I DON’T want to spend it when the cash comes from actual physical labor. Thank you for your enlightenment.

  31. BigRed says:

    I was so caught up in my own relationship with money and what it can buy, I hadn’t realized that my parents also had dysfunctional relationships with money (both pretty weird, and ultimately, one of the disparities that led to their divorce): they both grew up in the Depression, and my mom was one of 4 kids raised by a single mom (her dad died of TB when she was 3), and there were many nights they were cold and hungry. Her response, once she had money, was to always have things around her, and to buy whatever she felt like, because it made her feel better. I can understand that, but it is frightening, as I think she has insufficient savings for retirement (she is a workhorse, and in her mid-70′s, is still teaching 30 piano students a week, and doing estate sales on the weekends).

    My dad, on the other hand, was frugal to the point of cheapness. His parents were better off than my mom’s family, but never had much. SHockingly, though, they (like my dad) saved like crazy, and had actual cash in the bank. However, they were paranoid about touching it. My dad was cut from that cloth too, and saved to the point that we kids (there are 5 of us, through remarriage and another adoption) were grounded if we touched the leftovers in the fridge. They counted the lettuce leaves and the eggs–it’s kind of pathological. My dad and stepmom have a great retirement, and a huge house (that nobody ever stays the night, so why 5 bedrooms?), and they travel internationally and eat at very nice restaurants. But, when my brother was being beaten up at school, and was begging to be transferred to a private school, they refused to shell out the money. As a result, he dropped out of school at the earliest possible date (with my dad’s permission–age 16), and went on to a series of lousy minimum wage jobs (my dad did collect rent from him until he moved out), and his future was pretty much written at that point.

    I guess the point is that we aren’t the only generation that thinks of money and savings in unhealthy ways.

  32. Allie says:

    “Spending less than you earn” is what creates financial freedom by allowing us to save money in an emergency fund and plan for retirement. It can also allow you freedom from your job, or be able to stay home with your children. If you always spend what you earn, you will never be able to retire and never have enough to pay for an emergency that comes up.
    Savings is what has allowed my husband and I to buy a very nice house in a great neighborhood in which to raise our children. We have money in savings (although more is always nice) and a good start at retirement savings. Once you have this cushion you can “live a little” as Trent said.

  33. K12Linux says:

    Steve H, spending “what you learn” is an easy road to indebtedness. I know because that’s how I find myself keeping our thermostat at 60 degrees just to be able to stretch our heating oil until we could afford to refill the tank.

    You need to spend at least enough under what you earn to build up an emergency fund. If you don’t then each emergency (tire damage, car accident, unexpected illness, etc.) puts you in the hole. Have a few of these kinds of things pop up in a row and it can get to the point that it’s hard to climb back out.

    It’s actually not so bad if you are spending mostly on non-recurring expenses since you can just spend less and pay off the sudden debt you incurred. But it would still be nicer if you had $6-10k saved up and were able to avoid being in debt in the first place.

  34. Fran says:

    May I recommend a book? Julia Cameron of “Artist’s Way” fame wrote “The Money Drunk” in which she addresses how to balance healthy and unhealthy spending.

  35. Linda says:

    Wow, that was so right on… Thanks, Trent for the powerful insight.

  36. That was a great post. “Spending less than you earn” is such a vital lesson, and it’s difficult to teach kids because they aren’t really earning things — just spending their parents’ money. I am still working on spending less than I earn! And I totally agree about the disconnect between earned money and spending. When all your money is electronic and spend with a card, it’s harder to get a grip on how much you have and how much you’re spending.

  37. Cotton says:

    You might want to take a look at Jason Zweig’s book YOUR MONEY & YOUR BRAIN. It examines the science of neuroeconomics – a relatively new field of study that looks at how your investing/saving/spending decisions are processed by your brain and why you react to information about those three activities the way you do. I’ve only just started it, but, thus far, it’s been pretty fascinating.

  38. steve says:

    I did the net worth calculation, and came up with $14/hour. Seems way out of whack with the $1/hour figure. But then again the average savings rate is close to zero or negative more often than not in this country.

  39. sandspiral says:

    Wow–**so** much great material here, both in the original posts (Trent’s and Erica’s) and all the comments. If I had time, I could go off on about six different tangents, but I’m at work right now, earning all those baubles. ;o)

    I think Trent’s post is aimed at the relative majority who never learned/don’t understand/cannot follow good money management principles. Some people *do* see the work/money connection properly, and more power to them as they use their credit cards or whatever!

    As far as loving what you do for a living . . . well, it’s wonderful in principle but not practically feasible for many people, at least in the moment. There’s nothing preventing us from pursuing our dreams and trying to make them financially self-sustaining, but: (1) there are no guarantees, and everyone has different levels of how much risk they are willing to accept; (2) some people are responsible for others (kids, aging parents, etc.) and must do whatever is necessary to bring in enough money to live on; (3) it’s hard for many people to even get clear on exactly what they *would* prefer to do with their lives; and (4) even for those who steadily pursue their chosen career/life goals, it can be a l-o-n-g process, and in the meantime there are bills that need to be paid.

    I, for one, would love it if someone would fully subsidize my existence for a year or two so I could put full-time effort into carving out a new career path which is closer to what I really want to be doing. Yeah, like that’s going to happen. So as I explore my options, I will be keeping my day job. In practical terms, I have no choice, all the positive thinking in the world notwithstanding. But I will continue to take baby steps toward the new career goals I’m now thinking about.

    On spending vs. saving (yeah, I’m being really brief here, aren’t I? LOL!) . . . I think it’s about finding a balance. Dig yourself out of the debt hole you’re in, if you are in one, save enough to cover emergencies, and save/invest responsibly for the future. But don’t live like an ascetic. Live as simply as you can without being uncomfortable, and live in *awareness* so you can make that determination. But indulge enough in occasional luxuries so that life feels worth living.

    Thanks, Trent, and all the commenters–great discussion!

  40. Rick says:

    Aurora has an excellent point- it’s not really fair to neglect all of the value you have received from spending money on consumable goods or services.

    Net worth / hours worked is really a way of measuring your savings per hour of work. It only would represent the number of hours of work needed to buy an item if savings was your only current income source.
    -Rick

  41. huna says:

    Good post! Why not think of “spending” the way a business see it – operating expenditure or capital expenditure. Whatever is left over gets given to the shareholders through dividends etc.

    So what could be most fulfilling to us would be to minimize operational expenditure (living costs like rent, phone bills etc). Capital expenditure in this metaphor would be things we spend to invest in ourselves – education, travel, good food. Capital expenditure creates more growth in the long run because you are spending on productive resources – not really a bad thing to become a more well rounded person.

    Obviously like any company, you have to basically decide what your most bang-for-the-buck category of capital expenditure is and go for it. Trent has mentioned a love for cooking – that’s definitely investment in himself in my opinion!

    “Stuff” doesn’t actually feature in the metaphor at all! So unless all the ipods and fancy household gadgets are really going towards enriching you as a person, they’re basically operations – the first to get cut by any good CEO.

  42. mr hubbard says:

    Great article.

    Money is how we demonstrate our value things in our life. It’s emotional, and personal and causes problems when two people or more share the same pool of money. AKA marriage.

    Keep writing and I will keep reading.

  43. This was a really great post! I know the latte factor is probably my biggest downfall, and it’s hard to deny ymself that momentary burst of pleasure. I find myself to be an emotional shopper – whenever I feel down, I want to buy myself somethign, or go somehwere to eat or somehow spend money to make myself feel better. Even though I try to limit my spending to under $5 per “session” – it all adds up, particularly if you happen to need this therapy session often!

  44. Great article, but I think this is a little misleading: the average consumer gets emotional fulfillment out of spending. I would say that the average consumer *seeks* emotional fulfillment *by* spending. If it were truly fulfilling, the average consumer wouldn’t continue to be a spending addict. As some other commenters have pointed out, overspending is a symptom just like anything else. To “cure” people of it it’s probably not best to simply say “stop,” as in “stop being sick!” (who can do that?), but to try to provide truly fulfilling experiences so that people can compare, and realize that spending *isn’t* fulfilling. Nothing that comes the price of later guilt really is.

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