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Money’s Only Good for Spending

 We’ve got a bad track record for saving in the United States. Most people haven’t learned the habit of saving money, which keeps them from doing what’s meaningful to them and achieving financial freedom. According to a Federal Reserve Board survey, typical American households save a mere 5.3% of their income.(1)

You’re probably expecting a big, ominous warning right now, like, “If you want to save more, then you have to figure out how to spend less!” Guess what? I’m not going to cover budgets or talk about curtailing your spending. I’m about to tell you how to spend better.

It’s All Spending

What can you do with money? Only three things: You can spend it, you can save it, or you can give it. But if you boil it down even more, the only thing you can really do with money is spend it. 

Obviously, you can spend money right now on yourself. We all call that spending. You can save money—but wait. Saving is really just a delayed form of spending. You’re spending it later instead of spending it now. That goes for investing, too. 


Giving is also another form of spending, because you’re spending it on other people rather than spending it on yourself. In fact, estate planning combines saving and giving, but it ends up as spending because your money is spent later by someone else.

So to sum it all up, you can’t do much with money except spend it. Every dollar eventually gets spent. Whether you spend it now or spend it later, it’s all still spending.

Spending Better

Life is a limited resource. From moment to moment, it passes by and it’s consumed. That’s the nature of life. Much like money, the only thing you can do with life is spend it—and since life, like money, can only be spent, what you do with it is important.

What most people want to “spend their life” on is doing something that makes them happy, something they find meaningful. That’s what I call thriving.

Are you just surviving, or are you thriving? Surviving is having enough to handle basic expenses and take care of your personal comforts. Thriving is about using money to help you get meaning out of your life. Thriving is “survival-plus.” After you master the necessities of surviving, you can make tradeoffs that help you thrive more.

Often thriving takes the form of saving, which means you’ll be able to thrive more in the future. Since saving is actually spending later—whether it’s in the next three months or years down the road—this kind of saving is “spending better.”

You spend better by focusing your spending on thriving so you can really get what you want out of life. Once you know what’s important to you and what makes you happy, choose to spend money on that instead of on what’s less important to you and makes you less happy. Again, that could mean your spending is going into a savings or investment account for a time.

Many people feel comfortable surviving on less money as long as it means they can put more money towards thriving, so they’re willing to make certain tradeoffs. When you have a goal you’re passionate about, tradeoffs become very important. You might be happier surviving on less in order to thrive more—and for you, that’s spending better.

Saving: Not the Flipside of Spending

As you can see, saving is not the flipside of spending. It’s counterintuitive, because you don’t spend less to save more. To save, you need to spend differently by making better choices.

Remember that saving is actually delayed spending. Saving is not about depriving yourself, spending less and scrimping. Instead, saving is shifting how you spend—not how much you spend, but how.

You’re not really spending money. You’re spending your life. That’s why it’s important to be clear on what you want to accomplish in life. Spending better can help you achieve those things, making life more enjoyable and meaningful.

(1) Federal Reserve Bulletin, Changes in U.S. Family Finances from 2007 to 2010: Evidence from the Survey of Consumer Finances. Federal Reserve Board, June 2012; page 15.