How to Spend for Higher ROL

Financial planning isn’t just about saving and investing for tomorrow. As we work towards long-term goals like retirement, it’s important to use your money in ways that make every stage of your life more comfortable, fulfilling, and fun.  

 

But, as study after study has shown, filling up your closets and garage with more stuff probably isn’t going to make you happier about life or your money. Shopping, like social media “Likes,” can release an addictive hit of dopamine in our brains that makes us feel good in the moment. But that feeling fades quickly. Chasing the next burst of happiness from one spending spree to another can create anxiety around managing the things we’re accumulating as well as the financial resources we’re depleting.  

 

Planning more of your spending around these four things can create a healthier relationship with your money and improve your Return on Life.  

 

Time 

 

Could you fill out your tax forms by yourself? Sure. Would you enjoy it and do the best job possible? Probably not. That’s why you round up your financial documents every spring and visit your financial advisor and CPA. Not only does paying a pro save you hours of time, but a CPA is going to find things you might otherwise miss and, potentially, save you money as well.  

 

There are almost certainly other tasks in your life you’re doing out of habit, not because you enjoy doing them or have the professional skills to do them well. What could you do with the week that you don’t spend painting your house through gritted teeth? How much more enjoyment will you get out of your porch renovation if it’s done right the first time? How much lower will your handicap drop if you can spend an extra afternoon at the country club every week while the neighbor’s kid cuts your lawn? 

 

Other People 

 

Researchers have consistently concluded that spending money on other people is more rewarding than spending on ourselves. Giving combines the happiness we experience when we spend with the fulfillment of making a difference in someone else’s life or impacting a cause that’s important to us. A recent study even associated higher levels of happiness with “passive spending” — automatic giving that freed folks from feeling uncertain or regretful. Pledging automatic monthly donations to your charity of choice might create a similar, sustained feeling of satisfaction.  

 

Or, the next time you feel the urge to splurge, buy something nice for a loved one, either because they need it or just to show them that you care.  

 

Daily Delights 

 

Even if you have the financial means, you probably can’t go on vacation every day. But that doesn’t mean you can’t reward or surprise yourself in ways that brighten your daily grind. Try a new lunch spot. Take a long walk after work. Treat your kids to ice cream on the way home from soccer practice. Skip out of town for a long weekend with your spouse. These small indulgences can help you to slow down a little and appreciate all that you have and the people you have to share it with.  

 

Big Experiences 

 

It’s never too early to start tackling your bucket list. In fact, planning ahead for a dream vacation creates anticipation that can make the waiting and the experience itself even more worthwhile, especially if you’re arranging for loved ones to join you.  

 

Plotting experiences on your $Lifeline can also help you keep your long-term and short-term spending in sync with the rest of your Life-Centered Financial Plan. Let’s have a conversation about how you’re feeling about your spending plan and some ways that you can get more from your money than just more money.