The Eighth Philosophy: Intentional Spending

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One of the distinct differences on this site compared to many other personal finance and FIRE websites is that I want to remind people not to forget about the heart. So many people in the medical field went into medicine for the right reason, a truly altruistic desire to help others. Yet, I know many of these same people burnout because they forget the “why.” This same premise occurs in the personal finance community where people forget that, while it’s important to achieve your financial goals, it is also important to remember why you set out on this journey: to obtain the financial freedom to have a life well lived. You can obtain both wealth and wellness at the same time by making both your head (financial decisions) and heart (things that bring you joy) happy! This is accomplished via our philosophy of the day: Intentional Spending!

What is Intentional Spending?

The idea behind intentional spending is to recognize that, while budgeting/tracking spending is vitally important to your financial success, it is also important to let loose every once in a while.

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However, there are many studies that show Americans are really bad at letting loose. Americans leave billions of days of vacation unused each year. Even when we do take vacation, we apparently aren’t very good at it. It often leaves us less happy when we return from vacation than when we left. The reason? Well Harvard seems to think that it’s because we plan poorly when we do take the vacation and the travel stress (if planned poorly) off-sets any happiness we would glean from the trip. Interestingly there has also been good research to suggest that how far we commute to work also affects satisfaction! Apparently, how much and how well we travel has a profound impact on our enjoyment in life.

Because we aren’t any good at letting loose ad lib, this means we need to be very intentional when we do let loose. Just don’t forget that the vacation analogy extends even further. We’ve discussed that a poorly planned vacation with loads of travel stress actually hurts you. Similarly, spending money you don’t have and that isn’t in your budget will simply increase your stress!

If it causes you to go into debt, finance/leverage a purchase, or prevent you from adequately saving it is likely not worth it! That is not intentional spending. Intentional spending makes your head and your heart happy! If it isn’t accomplishing both, it isn’t intentional spending.

Steps to Intentional Spending

Weber E-310 Gas Grill
A Weber Spirit E-310 Gas Grill. Cooks as evenly as they come at this price point.

  1. Part of Intentional Spending means budgeting. Don’t spend money without thinking about where it is coming from or what it will affect. Make sure that you have the money to spend and that it will not impact your ability to aggressively save or destroy debt! Are you still going to get to your Financial Plan goals? Check this box first. This is step 1, 2, and 3 of intentional spending. Use products like mint or personal capital to help here.
  2. Take inventory. While we can consult the research on what makes people happy, it is also important for us to spend time thinking on the subject for ourselves. Most studies on the subject find that people generate more satisfaction from experiences rather than from things. This could mean going skiing in the mountains, spending a long weekend at the beach, or going to a Big City you’ve never seen. As mentioned above, though, it should be well planned and travel stress kept to a minimum!
  3. When you aren’t spending money on experiences and do choose to spend money on things, take some time. In fact, if it is a substantial cost I recommend you endorse The One Month Rule. This will allow you the time to do research. Find the best product for the best price. For example, my wife and I are at the point where we need to replace our mattress. Apparently, mattresses are most cheaply purchased in May. So, we will wait til then to buy it. After all, there are very few “mattress emergencies” that would necessitate a dire need to buy one!
  4. When we receive a bonus, raise, or windfall; this is the perfect time to apply The 10% Rule. I recently did this after I found out I gave the government an $8200 interest-free loan (oops). I’ll be writing a post on this, but my tax refund was used according to the 10% Rule. While I love the taste a charcoal grill produces, it often takes too much time! In my attempt to spend more time with my family, I bought a gas grill (check out the picture) after doing some research. The other 90% went straight to my student loans. [This was only 5% actually. We spent the other 5% on equipment for my son’s Taekwondo class and to replace my thermocouple on our water heater after our pilot-light wouldn’t stay lit! Unlike mattresses, having no hot water is apparently a 1st-world country “emergency” if you have a wife and kids!]

The Purpose

The purpose of the intentional spending philosophy is to remind you of one thing. As long as you are obtaining your financial goals, it is perfectly acceptable to spend money! Budgeting and personal finance can become so restrictive that it affects your marriage and maybe even your mental health.

Just like you deserve (and need) to take that well planned vacation to relieve stress, produce satisfaction, and increase motivation at work; you need to perform some intentional spending!

What do you think? Do you spend intentionally? Do you overspend? Does your budget stress you out? Do you need a break? Leave a comment. I want to hear your intentional spending stories!

TPP

16 thoughts on “The Eighth Philosophy: Intentional Spending

    • I guess the more of a super saver you are the less it matters tracking spending or budgeting. Keep up the strong work! (Seriously, your approach implies a lot of inherent discipline!)

      For the rest of us mere mortals, budgeting may still be helpful on attain our goals 😉

  1. Great post TPP. Mindfulness is an important concept in all aspects of life. Maintaining a good weight means mindful eating habits. I always advise patients who complain that they cannot lose weight to track their eating (weight watcher points, calories, fat grams, or a food diary) and exercise (steps) and objectively figure out the problem. The same is true for money. It is hard to know where you are going without knowing where you have been. I was already financially independent when I started expense tracking. It is now a habit. One advantage to doing it is you can easily figure out your financial independence number when the time comes. I have never budgeted. I am fairly frugal by nature. I have made a few detours but overall I feel good about my system.

    • I agree completely, Hatton1! It’s hard to know where you are going if you don’t know where you’ve been. I think even Dr. Seuss wrote something about that!

      We must first “know thyself” before we can make changes to ourselves.

      And isn’t it funny how good advice in so many areas of our lives applies to other areas no matter how unrelated?

  2. We’re pathetic in that we track every single penny we spend. But this allows us to do no budget.

    I love the one month rule! I also love any helpful button on shopping websites such as “wish list,” “save for later,” etc. So many times I’ve put items on these lists and when I reviewed at a later point, I had no interest in buying them.

  3. I’m super intentional about purchases but I never budgeted during my practice lifetime. Since I retired I am budgeting. You often hear how people are going to “cut back” in retirement if times get tough. I decided to see exactly what “cut back” feels like so when I retired, I cut back to 70% of my previous life style. I have 2 kids in college (which I pretty well pre-planed) and sent my family to Europe twice (both pre-planed) and haven’t noticed the “cut back” hardly at all. What it means is I spend zero time thinking about a side gig since 30% less spending IS a side gig. I use Mint to track things

  4. Well said on being intentional with larger purchases – whether its a 72 hour rule or a one month rule, just do your homework and make sure you’re exchanging money for something of value.

    BTW – I love our Weber Spirit 210 Grill. Highly recommend researching how to keep the grates working, Weber even replaced ours for early rust three years in even though we were “cold cleaning” the grill.

  5. I love the month rule, we pretty much use it, but never formalised it before. Last year we didn’t really want much, so we didn’t spend much (except on travel which is in our budget!)
    This year has already brought 2 big purchases, but not only had we discussed them for months (maybe even a year), we got them in sales, and the things they replaced have both gone to a good home – result!

    • Nice! I think that tracking spending and budgeting are really helpful, particularly early on.

      I am all about waiting til the right time of the year to buy something! Gives you time to apply the one month rule. Glad it worked out for you, too!

  6. My wife and I are most definitely intentional spenders. And conscious consumers too :).

    Budgets don’t stress us out. To us, it’s more like a fun challenge. Like buying nothing for a year!

    If you’re in the market for a new mattress, I highly recommend the Naturepedic classic EOS. It’s the one we recently purchased. We love it. Easily the best mattress we have slept in (and we have stayed in some really fancy hotels). It’s also all-organic and non toxic to boot! I would encourage you to look into it, and if you have any questions feel free to ask. 🙂

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