The Art of Spending

#222

Key Takeaways from the author of The Psychology of Money, Morgan Housel's article on The Art and Science of Spending Money:

1. When CEO Jack Welch suffered a heart attack and recovered, what he regretted the most was ‘not spending enough money’!
2. Like revenge tourism post-pandemic, people who were born poor tend to ‘revenge buy’ to showcase how they’ve made it to the rich club.
1. "The more you were snubbed while poor, the more you enjoy displaying your wealth" - Robert Quillen
3. ‘Science’ to spending: making a budget, finding more economical options
4. ‘Art’ to spending:
1. Family background has a heavy influence on what you choose to spend on
2. Rather than using money to build your life, it ends up the other way round
1. Life built around money via devotion to expense regardless of pleasure
3. Frugality inertia: good saving habits and living well below your means for years leads to ‘spending aversion’
1. "Refusing to recognize that you’ve met your goal can be as bad as never meeting the goal to begin with."
4. Emotional attachment to large purchases
5. Joy of spending is inversely proportional to income due to less ‘struggle’ in purchasing something.
6. Asking $3 questions instead of the more important $30000 ones
1. Historian Cyril Parkinson coined the 'Parkinson’s Law of Triviality', which states: "The amount of attention a problem gets is the inverse of its importance".
7. Try new forms and ways of spending to know what might make you happy 
1. From Ramit Sethi: "Frugality, quite simply, is about choosing the things you love enough to spend extravagantly on—and then cutting costs mercilessly on the things you don’t love."

Reiterating from my previous post, remember to enjoy the little things in life and be okay once in a while to spend some money on things that make you happy.