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Most personal finance advice revolves around how to accumulate and manage money. There’s very little insight on how, when and on what, to spend it.

But having a plan for disposing of your dollars throughout your lifetime is as important as saving them in the first place. To make things more complicated, there are purchases that will increase your joy, and even more that will diminish it – and it’s not always easy to tell them apart.

So, can money buy happiness? Yes it can, but only if you spend it on the right things. Here are three things you won’t regret spending money on:

Financial security

Unsurprisingly, the best immediate use of money is to reduce financial stress. Things like saving an emergency fund, putting money away for retirement and paying down debt are all good ways to use your money. If you’re neglecting any of these things, chances are the stress of doing so is getting in the way of enjoying anything else. It’s very difficult to enjoy spending money when you’re experiencing financial distress.

Taking care of your financial security and that of your family will free up mental and emotional energy to focus on things you love.

Convenience and comfort

Spending on items or services that make your life easier or more comfortable is almost always a good way to use your dollars. You can take this a step further and splurge on luxury products or services if your budget allows, but for the most part the biggest benefit is realized in relieving discomfort rather than ensuring the most incredible experience possible.

While it’s tempting to find the products and services that make it easier for us to do more, the best purchases are not necessarily what increases productivity. Instead, they’re what give you more leisure time. Hiring a bi-weekly cleaning service can free up hours for hobbies or time with friends and family. Subscribing to a meal or grocery delivery service can save time on meal planning and grocery shopping.

We live in a culture that prioritizes money above all else. If you hire someone to clean your home and it frees up two hours that you use to watch Netflix, many would consider that a “waste” and insist you should do your own cleaning and keep the money. But your relaxation is worth spending money on. You do not have to financially justify rest.

Hobbies and passions

Finally, it’s no real surprise that spending on your hobbies and passions is most likely to deliver the biggest bang for your buck in terms of happiness, but ironically these seem to be the area we tend to neglect most. Often it’s because of lack of time more than lack of money, but the cost saving is often used as partial justification for giving them up.

But when we neglect our hobbies and passions, we are often also neglecting our creative outlet, community and our physical health. Giving up golf or snowboarding might save you money and time, but the cost might be the loss of most of your social life and a good chunk of your regular exercise routine. So make spending on your hobbies and passions a priority.

Any purchase that does not fit in the above three categories is likely to leave you with buyer’s remorse. And any purchase that threatens the above is likely to make you downright miserable. But in addition to avoiding buying anything that compromises the above, there is one other thing you want to avoid spending money on:

Things that make additional demands on your time or money

We tend to assume more is better, but big purchases can end up being a drag on both your finances and your time, which ultimately means a detriment to your happiness.

A bigger house means more to clean and maintain, and if you have to move to afford it, it often comes with a longer commute. Likewise, a larger or second car increases your costs for gasoline, insurance, tires and repairs. This rule remains true for smaller purchases too, such as expensive clothing that is dry-clean only.

For most things, a bigger upfront purchase price also means bigger long-term maintenance costs, and a bigger long-term time commitment to take care of them. If that’s not enough to dissuade you, ponder this incredibly ironic truth: the more we own, the less we actually use and enjoy what we have. The only way to really make the most of the things you buy is to buy fewer of them. We get more out of having less.

When it comes to spending money, the choices have to be deliberate. As an investor you know what a financial return on investment looks like, but when it comes to spending, you’re looking for an emotional ROI. These simple rules can help ensure you are maximizing it.


Bridget Casey, MBA (Finance) is founder of Money After Graduation, a financial e-learning company. You can follow her on Instagram at @bridgiecasey and Twitter at @BridgieCasey.