Most people assume personal finance is all about restricting yourself and never giving into the temptation to spend. There's a place for that, sure, but there's also a case to be made for buying things you love. Financial expert Carl Richards makes this case over that The New York Times. Women shopping image via Shutterstock
Richards makes a statement that you won't hear from a lot of financial experts: it's OK to buy things you love. It might even be good financial sense to buy things you love.
For example, I once debated with a reader about the myth of buying a home as an investment. The reader finally conceded that buying a home is overrated as an investment, but said I wasn't considering the emotional factor that goes into it: the love and pride one has for one's home. This is absolutely valid. Assuming you're on track financially and not spending money you don't have, what's so bad about buying something just because you love it?
We often feel like we have to justify those purchases. We call them guilty pleasures or we pretend they're investments. But it's OK to buy expensive things you love, and Richards uses a personal example. He talks about an incredibly expensive bike he really wanted but shrugged off because it was too pricey. For weeks, he looked for something comparable and tried to talk himself out of biting the bullet. He writes:
After putting myself through the painful process of shopping around, comparing prices and looking at models that I didn't really want, I pulled the trigger. Following weeks of buyer's remorse that more closely resembled terror, I came to realise something that is going to sound crazy. Buying this incredibly expensive bike was one of the best financial decisions I've ever made...This was a fantastic, rational, smart financial decision. And I know that goes against everything you've heard from every personal finance adviser out there. They're always telling you how to save money, how to reduce expenses, how to buy cheaper... What I'm saying is, that's a shortsighted message that we need to change.
To be fair, there's a reason those experts focus on frugality: because there are probably more overspenders out there than there are oversavers. But that doesn't take away from Richards' point that it's not inherently wrong to buy expensive things you love. In fact, it's OK, and sometimes it makes more financial sense. If you love the item, you're more apt to keep it. If you keep it, you're more apt to use it and have it for ages.
Money is just a tool for getting what you want out of life, whether it's financial security, a home, or a new bike. Frugality is also a tool. It can help you find more money to spend on the things you want. The idea is to use both in a way that benefits you most right now and in the future.
To read more about what Richards has to say on this topic, head to the link below.
The Financial Benefits of Buying What You Love [The New York Times]