Almost 10 years ago, I read some advice in a personal finance book that has forever shaped the way I think about my money and spending habits.
The book was I Will Teach You to Be Rich by Ramit Sethi. (The newly released second edition is available here.)
The nugget of wisdom that has stuck with me all these years? “Spend extravagantly on the things you love, and cut costs mercilessly on the things you don’t.”
The problem with most traditional personal finance advice
The typical personal finance advice often focuses on sacrifice and cutting back.
It can feel like a laundry list of things you can’t do if you want to win with your money.
That doesn’t feel good.
Some people envision the seemingly deprived life that typical advice leads to and give up before they start.
Some people follow the advice and feel guilty for wanting or buying things that don’t fit into the traditional narrative of what it means to be good with money.
I don’t know about you, but I’m a grown woman, and I don’t like being told what to do. I also don’t want to have negative feelings around purchasing the things I want.
Constantly feeling deprived or that the things you want are wrong is a surefire way to fail. It’s why many diets don’t work.
Sure you can stick with it for a time, but it’s very hard to stick it out for the long haul, which is what’s required to really see success with your money.
Related: Starting from the Bottom: Staying Motivated to Reach Your Goals
The beauty of Ramit’s advice
I love Ramit’s advice because it leads to personal decisions about spending. It gives you more control.
Rather than scrimping on everything and feeling deprived, spend on the things you love, and cut back on the rest.
What you love may be different from what I love, and that’s okay.
There’s no right or wrong here.
Once you identify what you love, align your spending accordingly.
Some examples in my own life: I love good food with my family and friends, beautiful shoes, and quality makeup, so I don’t mind spending money on a nice restaurant, designer shoes, or a $25 lipstick.
Meanwhile my laptop is 7 or 8 years old (and you may or may not have to hold the lid a certain way to get it closed—don’t judge me); my iPhone is over 3 years old; and I buy jeans at Goodwill.
I buy the things I want within reason and don’t just settle for the cheapest option available. I don’t spend much on the things I don’t care about.
Related: A Peek at Our Monthly Budget
Don’t play yourself
Please don’t get me wrong. This is not a suggestion to YOLO your way into a worse financial position.
You should make sure you can afford the things you want without going into debt, wiping out your savings, or otherwise leaving yourself in dire financial straits.
Related: Don’t Ruin Your Tomorrow Trying to Impress Others Today
Also, when you’re buying the things you want, there’s absolutely nothing wrong with saving money.
I love consignment sites like The RealReal and ThredUp* and discount sites and stores like 6pm.com and Neiman Marcus Last Call.
Be realistic about your situation and your means, and be smart about your purchasing decisions.
When you are, you can buy the things you want and live a life you love while still making progress on your financial goals.
What do you think of this approach? What’s something you love that other people may think is silly to spend money on?
*This is a referral link. You receive $10 to spend, and I receive $10 at no additional cost to you if you place your first order through the link.
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Hi, I’m Rho! I’m a wife, mom, and Biglaw associate who believes that true wealth is having control of your time. I help busy lawyers like you take back control of your time by teaching you how to achieve lifestyle freedom through mindset shifts and financial independence. Read a little more about me here.
