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Why Spending Makes Us Feel Good


We usually think of Christmas as the time of year when we get spendy. However, there are plenty of other times in the year when we spend on non-essentials. Halloween is one such time. Candy and costumes may not seem expensive, but U.S. consumers spend an average of $86.13 each for Halloween, with shoppers spending a total of $3.4 billion on costumes alone this year.

Halloween reminds me of why spending money can make us feel good. It’s like when we buy a new shirt that we don’t actually need, or treat a friend to lunch. These purchases give us a warm and fuzzy feeling, and we feel more fulfilled in the moment.

There’s nothing wrong with spending money or treating yourself to a new shirt or going out to lunch. If anything, it’s important to reserve a portion of your income to non-essential items. You’ve worked hard for your assets and you should be able to spend some of it on things you enjoy. However, it’s essential to know how to balance your budget and spending.

The Minimalist Movement

“Minimalism” has become a trendy word these last few years, especially when the book “The Life-Changing Magic of Tidying Up” gained popularity not just as a guide to organization but also a minimalist’s manifesto. The idea behind minimalism is to live more simply with less “stuff” and to only buy things that bring you joy.

Some people like to take minimalism to the extreme, which is why it can get a bad name. However, there are varying degrees, and I think finding a healthy balance of minimalism can benefit people’s life and wallets. I’ve embraced minimalism in small ways, whether it’s second guessing a purchase or asking myself if I truly need to make a purchase. I’ve also had a number of clients who have shifted their focus from purchasing things to finding joy in hobbies and activities, which saves them money.

Building a Budget

If the notion of minimalism and living simply doesn’t appeal to you, that’s okay. It’s not for everyone. Many people I’ve worked with prefer to establish a budget as a way to balance their spending and saving. The great thing about a budget is that there’s no one right way to do or define it.

For some, a budget is simply paying the bills, while for others it’s not surpassing a certain dollar amount each month in spending. Your budget is for you and you alone, so it should reflect your goals and priorities, not what you think other people would be impressed with or what you wish you spent. If you want to spend twice as much on food so that you can eat only organic, do it! It’s your money. Your budget should be a reflection of your reality or it won’t do you much good.

To start building your own budget, take a snapshot of your past financial activity. What has your spending been versus your saving? What are your necessary recurring expenses and what are other bills you could, if needed, eliminate?

Now, consider what bills you’ll continue paying in the future (such as your mortgage, car insurance, etc.). How will your medical insurance change? What bills will you no longer have to pay in retirement? For example, if you currently have a long commute for work, you’ll likely spend much less on gas when you retire. You shouldn’t expect for everything to be set in stone; this is simply to help you start budgeting.

A Good Starting Budget Guideline

If you’re struggling determining how to set limits within your budget, consider starting with the 50/30/20 budget, which provides a simple guideline for helping you determine where you should allocate your money and what takes priority. As the name implies, your income is distributed into three categories:

  1. 50% goes toward the essentials, including your mortgage, insurance, and any other fixed expenses.
  2. 30% goes toward personal spending and lifestyle expenses, such as eating out at restaurants, taking vacations, and shopping.
  3. 20% toward savings. Depending on your personal circumstances, money in this category may go into your savings account or toward other bills if you want to more aggressively pay off your mortgage or any credit card debt.

You can always adjust this distribution depending on your goals or needs.

Don’t Be Afraid to Ask for Help

While many people have successfully budgeted and managed their money on their own, too many people don’t get a second opinion from a financial planner to see if their strategies thus far are working as they should be. They may assume that they’re already doing a good enough job, or that a financial planner is only needed for someone with no knowledge of planning and budgeting.

Additionally, research shows that most people perform at a higher level when they have outside accountability. From exercise to spending, most people find that having someone to hold them accountable increases their success, not only because they have someone to answer to, but also for the support and encouragement they receive.

Having a financial accountability partner is valuable because you’ll be a lot less likely to cheat on your budget if you know someone is going to be asking about it. One way to find financial accountability is by working with a financial planner. An experienced professional can be instrumental in not only helping you set up a budget but in adhering to it as well. At Private Client Wealth Advisors, we become part of your family’s executive team, sitting side by side with you as you navigate your financial journey.

Want to learn more about how we can serve as your budgeting guide and accountability partner? Contact us by phone at 303-945-2222 or email us at barry@pc-wa.com to set up a complimentary review.

About Barry

Barry Steelman, AIF® is the Founder, Principal, Managing Partner, and Client Advocate at Private Client Wealth Advisors, a registered investment advisory firm based in Denver, Colorado. He specializes in working with individuals, families and businesses and conducting financial planning, portfolio management and retirement plan services. Along with more than two decades of experience, he is an Accredited Investment Fiduciary®, which signifies knowledge of fiduciary responsibility and the ability to implement policies and procedures that meet a defined standard of care. Learn more about Barry by visitingwww.privateclientwealthadvisors.com or connecting with him on LinkedIn.

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