Money Health

How to Manage Money Better without Sacrificing Joy

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Suze Orman says that you shouldn’t waste money on things like coffee. She tells CNBC: “I wouldn’t buy a cup of coffee anywhere, ever—and I can afford it—because I would not insult myself by wasting money that way.” Her reasoning: coffee is a “want” not a “need”—and that money can be put to better use, like being invested. But is this really good advice?

You might save money by cutting out small purchases you don’t really need. But it’s important to do things that make you happy—even if that means buying a cup of coffee at your favorite café every once in a while.

Worrying and feeling bad about every purchase you make isn’t a healthy way to live. Instead, focus on creating healthy spending habits that promote balance in your life. Spend money on what makes you happy while being mindful about how much you spend and how often. If you’re struggling to find this balance, use these tips to start managing your money better, while leaving room to treat yourself.

Get the Most for Each Purchase

You don’t have to stop spending altogether to be money smart. Instead, you need to make intentional decisions about where you’re spending and ensure that you’re getting the most for each dollar that comes out of your bank account. Here are a few simple ways to do exactly that:

  • If you love coffee, go to a café with a rewards program.
  • If you love to stream entertainment, choose just one service and cut the rest.
  • If you love to shop, and you use credit cards, choose one that offer rewards and points that you can redeem for travel or cash back.

Consider Each Dollar Spent as an Investment

Every purchase you make is an investment—your money is going toward something you now own, even if only until you finish drinking it. Before making a purchase, ask yourself: is this a good investment or a bad investment? When it comes to clothes, home goods and electronics, this is straightforward. In general, the longer you can get use or value out of something you buy, the better. A hip shirt that rips the third time you wear it, for example, is probably not a good investment.

But when it comes to coffee, wine, and nights out, evaluate the investment in terms of the experience. It may be worth spending $50 on a gift for your best friend’s birthday, but spending $50 on happy hour drinks with your boyfriend’s co-workers may not provide the same experience that enriches your life and makes you happy.

Take It from the Experts

Sometimes the best money advice comes from the people who are working to find their own balance and happiness. Here are some real-life tips to get better at managing money.

Reward Yourself With the Things You Love

Justine Nelson, founder of Debt Free Millennials, loves to travel and often shares about how she uses travel as a reward for herself when she reaches debt milestones. She says:

“I always make room for travel even when I was paying off $35,000 in student loan debt. Why? Because travel is my happy place. Because it’s important that I experience life now and not later. Because debt milestones should be celebrated with adventure.”

Using this money management technique, you spend money on something you love, while rewarding yourself for working hard. Nelson explains, “Love to try new restaurants? Build in a restaurant outing when you pay off your first loan. Love to attend baseball games? Hit your savings goal and then see a game. The reward is much more satisfying and you’ll have motivation to continue towards that #debtfreelife

Rent, Don’t Buy

In our consumer-driven world, it’s easy to jump into buying something right when you want it. However, The Budget Blonde suggests considering renting instead.

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After a jam packed weekend of kayaking, going to the beach, thrifting, visiting Palm Springs and lounging by the pool, I said goodbye and dropped one of my best friends off at the airport late last night. As I was driving back home from the airport, it occurred to me that a lot of the activities we did involved borrowing or renting, instead of buying. I would really like to own a kayak, but max I’d go a month is probably once. Is it worth it for me to pay for an expensive car rack and a kayak? Plus figure out how to store it at my apartment? No, I’ll pay the $12 and rent the kayak. I live in a small studio that fits my current budget and my everyday needs. I don’t have a lot of room for additional storage. When I go to the beach, I drive home and kindly ask to borrow beach chairs for the day and guess what, they’re usually just sitting in the garage not being used. Before I moved to my studio, I live in a modern apartment complex with multiple pools. But I did other things on the weekend and I didn’t use the pool regularly, but I sure paid for it. Now if I want a pool day, I pay for a pool day Pass. $25 for a luxury resort with a lazy river is well worth it and much more economical than paying a few hundred dollars extra a month for amenities you don’t utilize. What else can you borrow instead of rent? Clothing, need a dress for an upcoming wedding, ask a friend. Camping equipment. Gardening and lawn tools. The list is endless. So what have you borrowed or rented lately to save money? . . . . #borrowdontbuy #dfcgoals #debtfreecommunity #budget #debtfreeliving #budgettingtips #budgetliving #frugalliving #savingmoney #budgetfriendly #savingmoney #savings #savingmoney #budgetfriendly #savingsaccount #daveramsey #budgeting #savingsgoals #debtfreegoals #2019 #financialfreedom #financialindependence #thebudgetblonde

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She says, “I would really like to own a kayak, but max I’d go a month is probably once. Is it worth it for me to pay for an expensive car rack and a kayak? Plus figure out how to store it at my apartment? No, I’ll pay the $12 and rent the kayak.”

The good news is, you can rent so many items in our ever-connected world, from expensive event dresses to camping gear and electronic accessories. If you won’t use it often, or never again, enjoy the moment and spend less by renting.

Create Your Fun Money Account

In your monthly budget, account for the things that bring you joy, as you do for your cable bill or your car insurance. Sara, of Save With Sara, says she would fail without her fun budget.

“Budgeting fun money keeps me from feeling deprived. If I didn’t have it I probably would become resentful of the process and give up, or I would break down and do something over the top and expensive.”

Set money aside each month for fun so you can enjoy without the guilt without going overboard.

Manage Your Money and Have Fun

It’s possible to spend consciously while also enjoying the things you love. Set a fun money budget, get more for each dollar you spend, and consider whether the experience is worth the money. By adopting these money managing tips and celebrating your financial success, you’ll be more likely to stick to these financial habits and have a healthier relationship with money!

Jessica Thiefels is the CEO of Jessica Thiefels Consulting and has been writing for more than 10 years. She’s written for AARP, Reader’s Digest and Lifehack and regularly contributes to The Financial Diet, and more.