Spending Money

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Apart from the object related shift of values post, I have never really written about my approach to money and budgeting. I am not planning to go accountant on you, but I have noted quite a few things on spending money and satisfaction that I'd like to share with you.

As I started questioning the consumerist society, advertisments (Japan has a lot more advertising everywhere than France and it was a shock), but also my self esteem and purchase habits, the way I spent my money started to change. Here are a few elements I learnt over these past six years. I am not sure that all of the below applies to everybody, but I thought it might be worth sharing.

Spending Habits Awareness

In Japan, the weirdest thing happened to me. In nine months, everything changed about my spending habits. I started spending money on brands I didn't even know before like high end make-up or clothing brands, I purchased things I never bought in France, like cute mobile phone straps, designer bags... And when I came back in France, my  "acceptable price range" for everything  had changed dramatically. Just to give you an example, my eyeliner, that I paid 10€ before leaving, changed to a 35€ one from Lancôme and I didn't even notice the shift.

Some of these changes might be explained by my becoming adult and trading up for better quality clothing and beauty products. But to be honest, most of these changes were linked to an unconscious influence of both advertising and the spending habits of my Japanese classmates.

When I came back to France and realized how much money I spent in Japan every month, and on what type of material items, I started realizing how little control we really have on these things if we don't pay attention, and that we need to make ourselves aware of what we spend our money on and why.

Ever since, I hold a precise record of my spending habits - with weekly updates on past purchases and monthly budgeting of the next. Of course, this helps maintaining my balance between income and spendings, but also keeping aware of how I spend my money, and if I am being influenced by marketing or my surroundings.

Possessions vs Experiences

As I recorded my purchases - and as I paid for shipping all my material purchases back to France - I realized I spent a lot of time, money and energy on material collections of DVDs, video games, books and other things I used to collect. I started to wonder if too many material possessions weren't a burden, and if I shouldn't consider cool experiences instead, like fancy restaurants, week-ends away, classes and theatre shows...

I already wrote a full post on experiences vs stuff if you'd like to read the reasons why I now prioritize non-material purchases with my budget. This was a serious shift in spending habits over these past few years. I don't have a lot of money, but I can now allow myself to buy things I would never think I could afford, like violin lessons for example.

For Myself vs For Others

I watched a great TED talk the other day, subversively named "How to Buy Happiness". In there, Michael Norton explains, backed by scientific studies, that it makes us happier to spend money on other people rather than ourselves.

Obviously, our salary is made for food, accomodation, personal purchases and hobbies etc. so I'm not saying you should spend all your money on somebody else. But I realized it made me happy to buy presents for my family and friends, to give for a cause I believe in.

So now, I make a ritual out of it: I wrap the gifts carefully before giving them, when I see something that makes me think of someone, I buy it for them even if it isn't their birthday or anything, I always think of a (preferably useful) trinket to bring back from my travels, I give a few coins to people or causes on the street from time to time, and I regularly treat close ones with a drink or a meal in a restaurant. And Michael Norton is right, it does make me happy.

Material Purchases: Priorities and Growth

Back to material purchases for myself, how do I spend my money now? I'm afraid the previous paragraphs may sound like I'm a perfect money spender, which is completely untrue. I still spend a lot of money on material items, and I still make purchase mistakes. The first action I decided to take is to accept my weaknesses and stop beating myself up about them.

The upside of keeping records of my purchases is that I can be aware of these weaknesses and try to learn from them. But above all, I learnt which material purchases made me happy.

In the end, I think the best way to handle material purchases is to prioritize in regards of how you will use them, not what they are. For example, if you are a fashion lover and get joy from outfit picking in the morning and sharing finds with friends, then it makes sense to put sartorial purchases on top of your list. If you like spending a lot of time at home, invite a lot of people over or practice a lot of activities from home, it makes sense to add furniture/decoration on top of your list. If you have a particular passion (a sport, a cultural activity...), it makes sense to be at the top of your priorities.

The problem arises when small meaningless purchases add up and become a huge part of your budget although they are not a priority, which is often the case. Does it make any sense?

I hope this little summary was of some use to you. This was more of an overview of my current trail of thoughts on money and happiness, but if you'd like me to dig deeper on some of the aspects mentioned above please let me know! What about you? Have you ever questioned the way you spent money, made priorities in your budget?