“You either master money, or, on some level, money masters you.”
– Tony Robbins
According to a CreditWise survey, finances are the number-one cause of stress for U.S. adults (73%) — more than politics (59%), work (49%) and family (46%).
We worry about money… because, in today’s fast-paced world, we need it to survive.
And, as with all things worth worrying about, money is something we should all strive to gain wisdom in how we steward our own finances.
Dan Ariely, a professor of psychology and behavioral economics at Duke University, provides one such nugget: he says we should “spend better, not less.”
We think he’s right.
Here’s his advice summed up from this CNBC article…
1. The novelty of new stuff wears off fast — “When you get something new, it is very exciting, but then you get used to it. If you get a new television, sofa, dining table, car and bicycle all in the same week, in a month, you’ll forget all of them. Their hedonic impact on your quality of life will diminish.”
2. Think about the future, not just the present — “Maximizing your 401(k) deduction is important. It’s tempting not to do it, to say, ‘Well, I’m just starting, I have things to do.’ But it is important to get things going,” he says, “because compound interest works really well when you’re young. You just have to use it.”
3. Reflect on past spending — and past regrets — In one of his research studies, Ariely asked consumers to look at their past credit card transactions and identify their purchase regrets. The Millennial Regret Spending Study asked over 1,000 consumers aged 20 to 36 to identify which purchases they regarded as regretful or satisfying. Ariely and his team found that millennials derive greater fulfillment from longer-term purchases than from impulse purchases (70% and 50% fulfillment, respectively).
4. Take pride in your savings — Some think you have to just “plow through it and you have to do it. It’s not very easy. It’s hard to do something long-term that is going to be difficult,” Ariely says. But it pays to “find joy” in necessary financial habits like building your savings.
Money, after all, is meant to be spent.
But it should be spent carefully — on things we care about.