When did it become wrong to spend money? I haven’t figure it out yet, but apparently it’s recently become a sin, wasteful, and extravagent to spend the money you earn or saved.
On a thread on SavingAdvice a known saver raised the discussion “there is nothing wrong with spending money…“. This lead to a interesting discussions as to whether spending can even be defined as wasteful, sinful, extravagent?
Most agreed it’s okay to spend. But then there was this line which if you crossed in spending, became wrong. That if you bought a $50k car it was a bad idea, even if you made millions because that much on a car was wasteful and extravagant.
There was “judgement” on the thread that even if you are a multi-millionaire, you shouldn’t be wasting money. That we should live a life of frugality and thrift. I guess that leads to the question then “is spending wrong”?
How do you determine that spending $x on something is wrong? Like saying that spending $100k on a car is outrageous. Or $1 million dollars on a house. That you should be able to live with less and save the rest. Is it wrong if you can afford it?
Is it envy that makes people say it’s wasteful and extravagant? Is it wishing that you could be that person and spend that money? If you worked hard and lived very frugally your whole life does it mean you have to continue forever? Is there a point where you are able to sit back and enjoy the fruits of your labor?
Or is there a point where spending money is over the top no matter how wealthy you are?
32 responses so far ↓
1 Sense // Sep 19, 2008 at 8:11 am
I think it IS a waste of money to spend $50K on a car IF you don’t get an equivalent amount of joy, convenience, or satisfaction out of owning such a thing. Beyond a certain point, you are paying for something other than getting from A to B, which is frankly, what a car is for.
Fine, if you can afford it and you’ve always wanted that $5oK car and you love it, by all means buy it! But if you’re buying it to impress others or only take it for a spin once a year, and never think of it otherwise, it is a total waste of money in my opinion–it just becomes clutter.
2 Tim // Sep 19, 2008 at 8:33 am
when it comes to want items, someone’s wants aren’t the same as other people’s wants. That is a value judgment. when you look at a purchase based on numbers, that is easy to determine if you can or should buy it or not.
spending money depends heavily on what you value and how you want to live your life, not how others feel you should live your life. i consider my wife and i frugal, although we spend money in areas and amounts in those areas other peopel wouldn’t understand or appreciate or would. there are plenty of other things people buy that we wouldn’t, too.
so, if you can afford it, then it isn’t wrong. there is a great amount of jealousy and resentment involved, especially when someone far richer buys something extravagant. the question you should ask and i wonder about, is why are you worried about what other people are buying and spending on in the first place? does it give you joy to compare yourself with someone else, especially someone far more wealthier than you? do you want them to feel sorry for you or something? who cares what other spends money on? i don’t unless they over extend themselves which means that i am paying for their over extended lifestyle.
remember, we save to spend money and money exists because we need and want to spend.
3 MoneyGrubbingLawyer // Sep 19, 2008 at 8:37 am
Great topic, LAL!
I’m probably on one of the extremes in this debate- if you’ve got the money, I don’t think it’s ever wrong to spend it however you see fit. Want a $500k house? Go for it! Envy the neighbor’s Ferrari? Get one for yourself!
Spending may not always be objectively wise, or defensible, or prudent, but it’s not “wrong”. The sole purpose of money is to buy things. Its only value is in its ability to be exchanged for other things. My priorities are different than yours, but neither is right or wrong.
I might judge the guy in the Escalade or the woman in Manolos or the family in a 5000 sq ft house as being wasteful or as having more money than sense, but that doesn’t make their choices wrong. If you’ve got it, spend it.
4 JB // Sep 19, 2008 at 8:47 am
This is exactly why I HATED the book ‘Millionaire Next Door’. What’s the point of having money if you don’t spend it? There is no point.
If you want to act poor, you might as well be poor.
5 Jim ~ mydebtblog.com // Sep 19, 2008 at 12:02 pm
I would go as far to say the only thing you can do with money is spend it. There’s nothing wrong with spending money. You can save it and spend it later, give it to someone else to spend it for you, or spend it yourself. When it comes to what we spend money on, that’s a personal preference. Some people may opt for very conservative choices even though they could afford something that may be considered wreckless to others. If you can afford it though I don’t see it being a problem, either way.
6 LivingAlmostLarge // Sep 19, 2008 at 12:53 pm
I think that spending money on things you value is worth it. I have no idea what people value, like Tim said it’s different things.
But I definitely don’t think it’s wasteful, extravagent, or over the top to buy stuff you like.
I would love to own Warren Buffet’s private jet. He said it’s quite a luxury, but if I were as rich as him, why not? Sure it’s over the top luxury, but heck with that much money and he seems to enjoy it greatly.
I think a bigger problem is that people want so badly to be the Joneses that they forget there are people out there who ARE the Joneses. There are some really wealthy people out there! And they deserve to spend it how they like.
7 Ashley @ Wide Open Wallet // Sep 19, 2008 at 1:10 pm
This is pretty much the feeling I had after I posted about eating out the other day. I was saying I’m ok with the money we spend and a lot of people (even you LAL) wanted me to cut it back. Maybe my feeling of being ok with it didn’t come out strongly, I would have to go back and read it again, but it’s not the first time I’ve felt like people got freaked out because I don’t squeeze every single dime.
One person’s enjoyment is another person’s waste. One person’s comfortable frugality is another person’s poor house.
8 LivingAlmostLarge // Sep 19, 2008 at 1:21 pm
Nope, I thought you wanted to cut it back. If you want to do it. If not it’s not a huge deal. I made a suggestion for cutting back slowly because you talked about going from $400 to $100 and I thought it might be rough.
9 Jen // Sep 19, 2008 at 1:36 pm
I think that you should be able to spend your money on what you want — just as long as you don’t go into debt. So, if you want a $50k car & you can afford it, why not?
I think the question is why do people feel like they still need to live a life of frugality and thrift when they have millions of dollars. Is it so that they don’t out live their money? I know for a lot of older people, that’s their worry. But if you have millions of dollars and there is no way you could out live your money (assuming you don’t go crazy with them), then why not spend the money on something you enjoy while you are still alive?
Chinese people save their money not just for themselves but also for their children. They want to be able to pass on a lot of money once they are dead. So you have a generation of young people expecting to get a large sum of money or houses when their parents pass away. When my mom passed away, I did not get a cent, and I probably won’t get a cent when my father passes on (I am sure it is all going to his new wife). Am I worst off? I don’t think so. I think that you should enjoy your hard earned money while you still can. I know that my mother lived a very frugal life and when she passed away, she did not get to enjoy her money much. Guess who enjoyed her hard earned money– my new step mother. She got a $20,000 wedding ring from my father. So… I say enjoy your money. As long as you don’t go into debt, enjoy it!
10 JB // Sep 19, 2008 at 1:37 pm
I think this is somewhat of an issue that the Personal Finance Blog community has. This ‘holier than though’ – it’s OK if I spend, but you shouldn’t – thought process.
I hope nobody takes offense to that – it’s not aimed at anyone, it’s something I’ve been thinking about for a few months now… part of the reason I stopped Get Rich or Die Trying.
11 LivingAlmostLarge // Sep 19, 2008 at 1:43 pm
Jen, I hear how a couple saved a ton of money, then one dies. Then suddenly the widow/widower gets remarried and blows through the money with the new partner!
I gotta wonder if it might not have been nicer to have spent some of the hard earned savings with the spouse that died?
12 Meg // Sep 19, 2008 at 3:12 pm
Interesting Topic! I definitely think there is a line at which it is somehow unethical (i.e. extravagant, wasteful, immoral) to spend money even if you can afford it and/or you earned it.
Whenever I see people spending, for instance, $10,000 per night on a hotel suite or a million dollars on an antique car that’s just going to sit in a garage with their 20 other cars, I just think of all the people they could have helped feed or educate with that money. Sure, it’s their right to spend it – just like it’s everybody’s right to be an a**hole or to be ignorant or to be racist or anything else – but that doesn’t mean it’s good.
To some extent (and I don’t know where the exact line is) we all have a moral obligation to use our resources to help others, to benefit society, to make our world a better place. Whether those resources include time, money, or intellectual capital, it’s “wrong” to waste them.
Really thought-provoking topic…I’d have to do some thinking on where exactly that line might fall.
14 Livingalmostlarge // Sep 19, 2008 at 7:00 pm
I believe the line changes perhaps as you become more wealthy. What might have once seemed extravagant is now normal.
For example, paying 100% for college for your child seems outrageous!
But if you have the money why not? People will argue, you are spoiling the child. BUT maybe to you it’s worth it now that you have the money but 20 years ago it was unimaginable, and when you were in college you thought those people with 100% paid college were spoiled brats!
16 fengshui // Sep 20, 2008 at 9:17 pm
“What’s the point of having money if you don’t spend it? There is no point.”
I couldn’t agree more. I really feel sorry for people who scrape and pinch every penny, and deny themselves “nice” things and then die with a pile of money in the bank.
However, this is very subjective and some people ENJOY denying themselves new clothes and furniture their while lives. While I really should save MORE money, and invest more, I spend a portion of my paychecks on things for my home that I think are “nice” like; furnishings, paintings, bedding (the good stuff), bamboo plants, orchids, etc. I love the way my home looks, and sure, I could have a more “plain” home with hand me down furniture and then have an extra $10k in the bank instead, but it is worth it to ME to be surrounded by trendy furniture and beautful things in my home, because it makes me feel relaxed and peaceful and makes me feel that I “earned” these things by working hard. So, it really depends upon the person, their values, desires, goals.
18 Slinky // Sep 22, 2008 at 1:31 pm
Personally, I don’t care what people spend their money on as long as they’ve thought about it and decided that it really is what they’d like to spend that money on. It’s the impulse buying and the people who buy things they never use that bother me. Spend your money on things that bring you happiness. If you love to drive, get a nice car. If you want a beautiful home, buy one. Just don’t buy things because they are there or so and so has one, or “It’s what you do.”
Case in point: I just bought a pair of vintage back seamed stockings to go with my Halloween costume…..for $50. Crazy? Maybe…but not for me.
19 Until Debt Do US Part // Sep 23, 2008 at 10:52 am
I think it is all relative. If you are a multimillionaire then a 50k car might not be that much but to someone who is only earning 40k a year a 50k car is a huge thing.
That said some of the most frugal people that I know are very wealthy. Ok most of it is from real estate that they bought years ago but I was surprized to see how frugal these people were. Maybe they are asset rich but cash poor?
Anyway I agree with JB – there comes a point when you have to enjoy the fruits of your labor. There is no point going through life going without only to die a millionaire.
Sure thrift is important – especially for those in debt but there is a limit to its effectiveness. After a while you get diminishing returns – for example if your health was to suffer due to eating cheap processed food.
21 Jake // Sep 23, 2008 at 6:23 pm
It’s never wrong to spend your own money but IMO most people SHOULD try to save and invest more. I like to have a good time, I like to spend money, but I also know that I would rather live off of my investments then off of my paycheck. It’s all bout balance.
I’ve owned nice cars but for now I see them as wasteful, being in Iraq makes it easy for me not to spend on a new sports car. I do spend money on traveling though, this has a greater value to me then a new car does and it is large factor in my pursuit of financial freedom, freedom from a day job.
22 Shadox // Sep 27, 2008 at 5:41 pm
I actually think that money is for spending. However, you should make sure that you don’t rob your future self to provide a higher living standard for your present self. It’s all about making sure that your lifestyle is consistent over time, in good times and in bad, and that you have enough to support your family and give something back to the community.
23 Livingalmostlarge // Sep 28, 2008 at 11:36 am
I find it interesting that people are looking forward to spending!
24 Colombian Coffee // Oct 1, 2008 at 2:22 pm
I think what classifies as extravagant is all personal. However, I think if you live by the idea of buying what you need and what makes you comfortable and happy and avoid unnecessary spending, you should spend well. Spending wisely is important no matter what you income is. Also, think about the rest of the world. do you need all the comforts of a $50K car? or could you be happy with a $30K car and donate $20K to starving children. Think about what could be done with the money you spend on extravagancies. There are homeless, sick and starving people all over the world. If you had one of them over for dinner, how would they judge you?
25 Ray // Oct 12, 2008 at 10:00 am
What I’ve found is that most people are frugal on certain things and extravagant on other things.
Personally, I think my friends who are into iPhones, iPod, iWhatever are a bit crazy, since Apple products don’t interest me in the slightest. I never feel the need to plug two things into my ears and blast my ears with music from an iPod 24×7, or having a phone whose display I have to wipe constantly to take my face oil off the glass display.
On the other hand, I love good food and I will pay good money for good food. My friends think that I’m crazy for spending money on things that I’ll just enjoy for a few minutes and end up as, er, waste, a number of hours later.
In the end, as long as the spending is within our means, there’s nothing inherently wrong or right with that.
28 Fabulously Broke // Nov 5, 2008 at 10:38 pm
It’s not wrong to spend money, but you feel guilty as a PF blogger.
I sure as hell do for spending that much on necklaces, but then again… I’m earning a heck of a lot more than before.
29 LivingAlmostLarge // Nov 6, 2008 at 7:56 pm
Fabulous, you shouldn’t feel guilty! You make great money and work hard.
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