I recently received a comment after I wrote about a really bad day I was having. The comment had to do with the struggle we all feel between saving and spending our money. The comment made me ask myself, “How do you know when it’s right to spend your money, and when you should save your money?”
The comment read:
“I can so relate with u (on your bad day). I’m real down and out too. And ready to give up. I also have the most money I have ever had saved up too. I can’t, don’t, enjoy my life because I’m so consumed on saving it. Im completely O.C. D about not spending a penny. Its crippling.”
This comment made me realize that knowing when to spend, and save money, is more of an art-form than a science.
As I thought deeper, I realized, that there really is no right or wrong answer I can give someone who asks me, “When should I save money, and when should I spend money?” I can only share what brings me the most peace, happiness, and sense of purpose. Here is how I responded to that comment, and the answer I gave on how to make the right decision between saving and spending my money. I call it:
“MY REGRET TEST”
Hello:
Your thoughts and feelings are valuable as I am sure many people feel the same way you do. You’re not alone! In fact, I have been thinking about writing an article, called, “How you know when you should spend your money.” Your comment inspired me to write this sooner, rather than later, so thanks for the inspiration and here I go.
I have adapted a perspective that really helps me know if I should spend, or save, my money. I call it my, “Regret Test.” Or my: “If I died tomorrow, would I regret not spending it, test.”
Here’s what I mean:
Before I let my OCD take control of my mind when I see something I want to spend my money on, I ask myself this question: “If I died tomorrow, would I regret not spending money on that experience or thing?”
If my answer is, “Yes, I’d regret not buying it if I died tomorrow.” Then I spend money on that thing and I don’t look back. However, if I know I really wouldn’t care about that thing or event if I died tomorrow, then I pass on buying it and save my money instead.
Here is an example of me putting this perspective into practice during a recent financial decision I made: (Now be patient with me as I talk a little NFL football. This story is more about my decision to spend money than football)
I am a huge Minnesota Vikings Football fan. One of my favorite things to do is go to the games in the fall. One of my favorite players for the last ten years has been the running back, Adrian Peterson. But he was recently traded to the New Orleans Saints, and it just so happens that the Vikings play the New Orleans Saints on Monday Night Football next week in Minnesota.
I realize since Adrian Peterson now plays for another team, this will probably be my last time to see him play live in person.
The problem is that tickets for this game are in high demand, like $100+. I usually wouldn’t pay $100 for a 3 hour sporting-event. But you know what? I can easily afford it, and I know I’d have a great time cheering on my favorite athlete one last time in person as a thank you for all the years of entertainment he gave me.
Don’t get me wrong. $100 for a ticket is a lot of money when you’re trying to save money and build wealth. But when I put it through my, “Regret Test Perspective,” then I know I’d regret not going to the game, and saving the $100 instead, if I died tomorrow.
So I’ve just decided to go to the game, and have fun, and not worry about the $100 I’ll spend.
This is my message to anyone who wants to create true wealth:
To be truly wealthy, it’s more important to live your life without regrets, than it is to live your life in fear of making the wrong decision, and spending your money on the wrong things.
Remember what you’re ultimately living for:
Don’t live your life with the goal of possessing a ton of money you’ll never use. Live your life with the goal of one day not having any regrets you made in your life. I believe that a life without regrets is one of the greatest, most wealthy lives you can live.
If you’d regret a purchase if you died tomorrow, I totally encourage you to spend a little and live your life without regrets!!!!!
That’s what I try to do, and my Monday Night Vikings Tickets just came in the mail last night. No regrets here!!!!!
Here’s another real-life example:
My wife is currently traveling across Europe with 3 friends. She had an opportunity to go horseback riding across lava fields in Iceland. Being a frugal woman herself, she called me and was nervous about spending $100 to go horseback riding over volcanoes in Iceland.
I reminded her that we could totally afford it. We have saved for these moments. I then asked her one simple question, “If you died tomorrow, would you regret not spending that $100 to go on a once-in-a-lifetime adventure on horse-back in Iceland?”
She replied, “Heck yes I would.”
I said, “Then go do it. This is why we save our money, so we can take adventures like this and not think twice about them.”
So this is her last weekend, with her horse, in Iceland:
Never be so frugal that you miss moments that you’d regret if you died tomorrow. So what you do think about this perspective?
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Hi Bill B.! Kimmy here. Thank u for your advice u gave me last month. So what i did to have the pleasure of spending, blowing money because i havent in long time. I went to ATM, withdrew 300.00 and surprised my husband and gave him the 300 and said go and spend it on whatever u want. He refused at first. But finally took it. Im still high, happy thinking about that experience now.
Kimmy, this comment is AMAZING!!!!!! I am Seriously SOOOOO Proud and happy for you. I was worried about you last month, but I can just see that you have bounced back and blossomed into an even stronger, smarter, and better person in the mean time. You did it! You are great! I feel privileged to give you these compliments. And even better: You totally nailed the greatest achievement you can make with the wealth you have accumulated: You helped the people around you – your husband – live a more fulfilling life. Giving, helping, and inspiring are where the greatest feelings of wealth are found. This is so awesome, and I am so proud of you. Awesome job.
Wow! Great. Ty. You r a very enthusiactic helper and coach. Keep up the good work ur doing for all of us here. Your valued and greatful, learning readers. And u are the 1 doing an awesome job!
By the way, I received this comment on our facebook post: “This was a great read, thanks. Sometimes the desire to not spend can sure be debilitating.” See you’re not alone!!! Your comment inspired other people out there who were feeling the same way as you. Thanks for adding an important perspective here.
I got a $100 gift card at work, and I’m not sure what to spend it on. If it was cash the easy answer is to save it. I’ve come up with a bunch of possibilities but when I step back and look at my savings account I could do many of those without the gift card. I’ve gotten into a mindset to not buy much, so trying to find something to spend $100 on is tricky. I’m very sure I’ll figure it out. ?
Here’s what I do when I find myself in your shoes: If I don’t need anymore stuff, I look at my relationships and ask what type of experience could I buy to strengthen my relationships. Could I buy a date night for my wife and I to get away and strengthen our marriage? Could I invite a friend I’d like to get to know better golfing, or to a sports game? And if I can’t decide anything there…. I look at who could I bless? I am a spiritual guy so I have alot of friends who are pastors, or who may be great, smart people, but didn’t choose the highest-paying career. Maybe I could bless them with something they need, or could use, more than I can. So that’s the process I go with. If I don’t need something, I start to think, who can I bless with this? Thanks for the comment!!!
Not a bad litmus test. I’m in ultra-accumulation mode right now but transitioning to loosening-the-purse-strings mode. I think your rule is helpful, especially since you posted it after field testing. I’m going to try it out!
Also, WhoDat! As a New Orleans fan and Louisiana native, I can’t make the game for work reasons and new baby reasons. However, I predict 35-17 New Orleans on MNF. Drew Brees tears it up, AP runs angry for 100+ and a score and the revamped Saints D shines against a struggling Vikes offense. It is a beautiful new stadium, Viking ship shaped and so nice, but the Black and Gold triumph.
Haha!! THe whodat nation shows up! The trick to mastering this litmus test is really getting to know yourself and understanding your wants vs needs. (I probably have to write another part #2 article on it as I didn’t mention it in this post) What I mean is…. I could abuse the “regret test” by stating, oh I really need that new Jaguar car, because if I died tomorrow, I’d regret not owning a brand new Jaguar today. But over the years I have learned that even though it would be cool to have a new Jaguar, it wouldn’t change my happiness, or add any meaning or purpose to my life, so I really don’t need a new Jaguar for me to experience the life I feel I was born to live. So that’s the trick. I’ve learned this about myself: I can pass on the Jaguar, and keep driving my 2004 Toyota Camry, because if I died tomorrow, even thought it would have been cool to drive a Jaguar, owning a Jaguar wouldn’t have changed the course of my life at all. So keep that in mind.
And you know I’m going to be screaming at Brees loud tomorrow when your offense is out there!!!!! I’m going to give Adrian a standing ovation before the game starts, but once it starts, he’s with the enemy!!! And I don’t know if you were a Saints fan in 2009, but you guys broke our hearts with that Brett Favre game. We still have wounds from that one up here. I’ll say 28-17, Vikes of course!!!!!!
Well said. I especially like how you clarified Jaguar “car”. If I read the post assuming you wanted a real Jaguar, it becomes very interesting.
The historically bad Saints defense showed up. Well done.
Hello, I love your wit!!! I got a good laugh when I imagined myself in my little wealth-building castle pondering the idea of actually buying a pet Jaguar for my front lawn. Nothing like being so wealthy that squeezing exotic pets into your budget feels normal and sensible. To heck with the car, now I want a real jaguar and a lagoon of pink flamingos around the jaguar island.
And yes, sorry you had to watch that game the other night. For us in the stands, as the home team, it was spectacular. Nothing like yelling all night and high-fiving and hugging people you don’t even know every time a touchdown happens. I was totally in my bliss and consider it $$$$ well spent! My wife was even impressed with my score prediction earlier in this thread. I said 27-17 Vikes and it was 29-19 Vikes. (I did sort of bad for a row of 6 big traveling saints fans 3 rows behind me. THey were a little loud in the first quarter, and then just sat there staring at their phones the rest of the night. Hopefully they didn’t break the budget too much flying up there for not any fun. But it did feel good to see them quiet as church mice most of the night.) We have the Steelers in Pittsburgh this weekend, so we’ll get a good indicator of how good we actually are Sunday. Good luck to you now that our rivalry is over!
Vikes D is impressive, 5 pro bowlers? Sounds like the Seahawks a few years back. If your O line holds up, rookie RB stays healthy and Bradford plays like the Heisman winner he is, you guys might might another run like 09 and at the very least you wont miss AP. Just don’t forget who knocked Farve on the ground in 09 ; )
Couldn’t resist the complement sandwich – that’s an insult between 2 slices of compliment bread, a favorite of my quarterly administrative reviewers. Who Dat!
Really good advice! I’ve always been more of a saver but have learned to spend on things that bring me joy. That’s kind of my test, does it bring joy to my life? But I think I could really use the regret test for larger ticket items. This is a tough subject for savers!
Hey Holly. Thanks for dropping a comment. Yes, the regret test is really helpful for bigger ticket items. It helps me evaluate how badly I want them, and how meaningful the experience of spending will be for me. I was just so happy that my writing was able to help and inspire someone I’ve never met with the articles I write. Hope you’re enjoying your park journey. Amanda and I look up to you and want to follow in your footsteps.
Thank you, Bill! We all have so much we can learn from each other if we’re just willing to listen. Growth is a lifelong journey.
I like the concept here. It’s certainly easy to get carried away with savings and suddenly find yourself miserable because you’re not actually enjoying life. That’s part of why we’re delaying our plans for Financial Independence for me to take a one-year mini-retirement this year.
I applied a similar concept – the deathbed test. I asked myself which I’d regret more when I’m on my deathbed – delaying financial independence 2 years to spend time with my kids while they are young or achieving financial independence right when my kids are getting ready to graduate high school and head off to college.
When I put it in those terms, the choice was a whole lot easier!
Great article. My family is generally frugal except for travel, experiences and health/eating well.
This was a really cool post. Going to either extreme, of spending too much or too little can get nerve wracking. Loved this perspective of a quick question – Will I regret not spending money on this?
In some ways it’s also a great question that streamlines almost any decision making situation. Would you regret not doing something? Like not blogging, not going into a risky job, not asking a person out. Whenever the answer is yes, just do it and tell yourself it had to be done and tried to really be believed.