Only after publishing CD Investment Alternatives did I realize the article is irrelevant to those of you who don’t save or don’t save much. I’m always trying to make my articles as relevant and helpful to as many readers as possible, so I apologize for skipping over you non-savers.
This article is an attempt to help spenders spend more and not feel so guilty about blowing all their money. It’s sometimes hard coming up with new ideas on how to spend your entire paycheck every single month. Year end bonuses are meant to be spent in celebration, not tucked in some pathetic 2% CD.
Tax refunds are also a bonus too right? It’s not like you’re getting back your own money you lent to the government interest free all year. Gotta spend the financial windfall on something nice! I’m here to help you develop a spending mindset and make you feel great about blowing all your money. I’ll also provide you a great list of things to splurge on to increase the quality of your life!
HOW TO DEVELOP THE SPENDERS MINDSET
1) Tell yourself you are special. It doesn’t matter if you did poorly in school, don’t stay late at work, haven’t bothered to build any alternative income streams, or don’t work well in a team. What is important is always telling yourself that you deserve to have and experience as much as any wealthy person around. Who cares if you’re 30 and have a net worth of only $50,000 compared to the average net worth of the above average person of around $150,000. You’re doing just fine. The more you tell yourself you will be fine, the more fine you will become until you get old.
2) Believe in bigger government. The great thing about a growing government is that it’s spending more money on the people who put our politicians in power. If this wasn’t the case, our wealthy leaders would be thrown out of office. It’s natural for citizens to vote for government spending which benefits them without having to pay more taxes. It’s also natural for a politician to take as much money from the kitty as possible to shower their constituents given they can’t hold power forever. With a huge government safety net, you won’t be afraid to run out of money, because the government won’t run out of ways to steal.
3) Lash out against those who save. Savers are no fun. They are all miserly people who don’t know how to live it up. Savers make spenders look and feel bad due to their greater financial security and less stressful lives. The solution to getting back at savers for making us feel stupid is to highlight how awesome our lives are. Tell them they are missing out by not taking so many great vacations. Tell them they are being parsimonious for driving cars that cost less than 20% of their annual gross income. Tell them they are being fools for working so hard while you’re having an awesome time. Don’t tell them that you secretly can’t stand your job and can’t fathom doing the same thing for the next 10-20 years.
4) Remind yourself you can die tomorrow. Reality stars Heidi and Spencer Pratt had a great time spending all their cash ($10 million) in anticipation of the Mayan Apocalypse on Dec 21, 2012, why not you? They’re only 26 and 29 years old, respectively. You’ve got just as much talent as they do for making lots of money. Although the median life expectancy is around 82 years old, forget it. You plan to die young, baby! It’s all about working to live rather than living to work. Let the future come as it may. We’ll be ready.
5) You can always make more money. If you live in a free country (not North Korea), you can always take in cash. There are millions of jobs that go vacant due to undesirability or a mismatch in skills. If you get desperate, you can always take the jobs that nobody wants to survive. Thanks to the internet, it’s easier than ever to start a business and get rich! In fact, I’m taking a bubble bath in hundred dollar bills right now. When I’m done, I’ll just call Alfred the butler to bring me my beluga caviar and mimosa.
6) Believe someone special will take care of you. Even if the government doesn’t hook you up if you run out of money, someone special out there will be there to solve all your financial worries. There are more than six billion people in the world today. Chances are astronomically high that you will find the love of your life. Maybe a good portion of the six billion people aren’t exactly wealthy, but who cares. You’re good looking enough to snag some sugar. Marriage conquers all, especially if you are broke and in debt.
7) Forget the poor. Only focus on YOU. Given we can all die tomorrow, we should ask what our country can do for us, not what we can do for our country. You’re already having a difficult enough time keeping your head above water, so what makes the poor think they deserve a helping hand? Let greedy rich people donate their money to fight diseases and unjust causes. Let those with a lot of time on their hands due to financial independence volunteer to become a big brother or big sister. Your children and your future family will be just fine. You don’t got time for this.
IDEAS ON HOW TO BLOW LOTS OF MONEY
Now that you’ve got your mind straight for why you should always spend everything you earn, let’s discuss some great ideas on how to blow lots of money!
1) Buy a car equal to or greater than your annual income. If you make $50,000, check out the upcoming BMW 335i coupe this Fall for $58,000. It’s sweet! Better yet, consider taking out a loan or a lease to buy your nice automobile. Nothing like borrowing money to buy a guaranteed depreciating asset to show off to your friends. Going from point A to point B in style is important in this day and age. We need to post about our material possessions on Facebook because we’ve got hundreds of neighbors to keep up with now. Besides, you don’t want to be caught dead valet parking a Honda Civic do you? The 1/10th rule for car buying is impossible to follow.
2) Buy only brand name clothing. Forget Ross Dress For Less, Target, and Walmart. Those stores are for thrifty losers. Even though you know that staying in shape is the main way to look your best (ever see an overweight mannequin), you need to buy Ferragamo, Louis Vouiton, Gucci, Prada, and Armani. Who cares about the 90% gross margins luxury companies are making. Don’t be a cheap financial dumbass. Dress for success or dress to fail.
3) Always get the latest electronic gadgets. It’s important to get the latest iPhone or Android as soon as they come out every six months to a year. If it takes standing in line for a ticket for hours, so be it. It’s important to always be able to “check-in” at your favorite bar and send out Tweets with nice photo filters to your friends. It’s kind of crazy how people survived without smartphones just 15 years ago. There’s going to be an accelerated product offering cycle of both Apple and Samsung products this year, so get excited!
4) Take exotic international vacations every year. Staycations or domestic vacations are for savers. Despite having only explored less than 10 different states, it’s all about going abroad. As a spender, you deserve to go to Europe for two weeks and spend 10% of your gross salary on a vacation. If you’re European, why bother taking JetBlue or Eurorail across the continent? Come to Milwaukee where you can drink the finest beer in the world. It’s all about seeing the world young because the world might not be around when we are old. I’ve seen the future and it looks so bright!
5) Always pay by credit even if you can’t afford it. The reason why you have a credit card and a $10,000 limit is because your credit card company believes in you. If they didn’t believe in you, they wouldn’t issue the card! You’re young and good looking so you deserve the best even if you can’t even afford your own apartment. You’ll make more money one day, so don’t worry about the 15%+ interest costs that compound over the years. Credit cards are convenient and allow you to live it up. If your friend can pay off $35,000 credit card debt in one month, so can you.
6) Get a fancy apartment. When you’re young, it’s all about having a swanky bachelor or bachelorette pad to impress your guests. If friends can see success, then you must be successful. No luxury car worth more than your annual income should be parked in a crummy apartment. If you don’t want to rent, then definitely look to buy even if you don’t have 20% down and a 10% cash buffer. We’ve got FHA loans by the government that allow homeowners to put only 3% down with no savings buffer. Certainly, nothing bad could go wrong in such a scenario.
7) Buy a timeshare or vacation property. Who cares if timeshares and vacation properties have proven to be one of the worst investments ever. I should know, I’ve got a vacation property that has lost a lot in value. Even if you seldom visit your property, if you can just get the one special experience while owning the place, it’s all worth it. How cool would it be have multiple vacation properties all over the world and let your clients, friends, and family stay there for free? You’ll never feel homesick while on vacation again. Booking a hotel room on a per needed basis is so ordinary. You are not ordinary. You are special.
8) Get multiple degrees without a plan. Education costs are skyrocketing because education has an inelastic demand curve. Harvard can probably charge $100,000 a year in tuition and the acceptance rate would still be below 10%. Why stop at one Masters degree when you can have three? If you don’t know what you want to do with your life, go to law school. It’s prestigious, only takes three years, and only costs $150,000 to attend. The government has the Income Based Payment (IBR) plan now, so don’t worry about all those student loans. When you graduate, you can call yourself an esquire. If you aren’t feeling too spendy, consider getting a PhD. Although it takes 4-8 years on average, you’ll at least get paid to go to school.
9) Pay more taxes. It’s important that everybody pays state and federal taxes to support our country. Even though the government arbitrarily invades other countries and acts like they own the world, it would be unpatriotic not to fund the beast. If you are lucky enough to make money, you better be honorable enough to pay your taxes you ungrateful whino. If you are fortunate enough to make more than the median household income of $50,000, then consider writing an extra 10% check to the IRS given they are doing such a bang up job with your money.
10) Go to Vegas, baby! Vegas is a natural wonderland where anything can happen. You could win $8.5 million dollars by becoming the World Series of Poker Champion too. You can sell all your stock today given the market is up about 6% YTD and put all your proceeds on the 49ers to win the Super Bowl. After the 49ers win, you’ll have increased your returns by 112% and can take the rest of the year off to travel, spend time with family, and do what you’ve always wanted to do. There’s a great saying, “No bet, no win.” If you love to spend money, Vegas is the best place to leave nothing behind.
SPEND MONEY LIKE THERE IS NO TOMORROW
Hopefully this article has given you plenty of reasons why it’s OK to spend all your money and not feel bad. Savers of the world are such silly goats who don’t know how to enjoy their lives. While they are diligently saving for the future, you get to live it up and get bailed out by the government if you mess up. Spenders help stimulate the economy, grow corporate earnings, get more people hired, and subsequently make investors lots of money. Why do you think we’re back to record highs in the stock market? Enjoy life!
Related Posts:
Don’t Let Frugality Lead To Lifestyle Deflation
When Is It OK To Forsake Stealth Wealth And Spend Up?
Wealth Building Recommendations
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Updated for 2019 and beyond. Start giving a damn about your finances!
I am so glad to see this article as I am attempting to purchase my first kelly bag, Moncler coat, splurge this holiday season for everyone around me. My internal guilt has really been there whenever I have these thoughts… I have maxed out this year for retirement, paid most of student loans, and left money for our next investment. I still can’t get myself together and justify these purchases. Shame on me!
….I admit…..I’m guilty of SOME of this. I’ll bet just about EVERYONE is…
I don’t know what to spend my money on, Ive made $138K in the last five months and its sitting in the bank doing nothing. Im gonna buy a second hand truck ($35,000 2012 3/4ton 20,000kms) mines hammered out and I need a new one to keep going to work outside of that I don’t know what I want to buy or what I ought to nd it aggravates me the money is sitting in the bank doing nothing. Id buy stocks or something but I don’t know anything about them.
Good problem to have! Look around your immediate family and see who is in most in need, and help them.
This one is freakin’ funny, Sam— Bravo!!
:D
Glad you enjoyed it! Please share around the social mediasphere!
Sam I have read many of your posts, and in almost (if not all of them) you’ve always encouraged the idea of saving money. I do think that saving is important. However, spending reasonable amount of money on things and stuff that makes you happy is equally important. I believe you should cut expenses and save money on certain things that are not very important to you. On the other hand, i also believe that you should spend money on the stuff you really love/like in life. It’s all about balance. I remember reading youe post about the “1/10th rule when buying a car” and I was like is this guy serious!!. But after i thought about it for a sec. I realized that having a nice new or newish car is not very important to you Sam. However, it could be very important to other people. So I think one should always have atleast a year worth of INCOME (two years would be better) in savings for emergancies, and just spend the rest of his/her money to enjoy and live life to its fullest.
Just my 2 cents
Great website Sam. Keep ot up.
I love this post! I think it could all be summed up with hashtags like #YOLO and #Tonight. What is not funny about it is this is actually how a lot of people my age (twenty-something) actually believe. Many of us are smart enough to know not to spend like this or think like this but a lot of us are just afraid of reality. Constantly spending and accumulating stuff does take the fear off for a minute. Most of us are still waiting for the glory days of easy employment to return.
Easy employment could be the death of all folks. Because my employment was so brutally difficult the first two years, I saved like crazy because I knew I wouldn’t be able to last much before 20 years.
But now, I search for the kick back life. Why not? Yolo!
Sam, I think you forgot one:
11) Relive your childhood
Go ahead! You were deprived when you were little! Your parents never listened! Well now, thanks to the friendly folks at eBay, you can get everything you ever wanted–Mint in the box! Darth Vader’s costume, A real Pac-Man game you can play all you want, the Batmobile–anything!
Speaking of which, I notice this isn’t the first action figure in your picture collection…are those Masters of the Universe? How extensive is your collection?
Matt – The picture is indeed a 1985 vintage He-Man Lizardman figurine. Ahhh, childhood memories are so great. And to be able to buy anything you want as an adult that you couldn’t as a child and still experience the joy is wonderful.
I’d blow it on an island in the middle of the pacific and go snorkelling everyday!!
Tempting! You can live in The Philippines for cheap and enjoy!
I was thinking more Fiji or Tonga!! One of my 2 favorite countries I’ve ever been to!!!
Nice Post Sam – Now we need a follow up post aimed at making the over-savers feel bad! :)
A BMW Z3 is not a lavish car anymore. I know, I used to own one (spent about 12% of my income on it at the time, before this site even existed)! The newest ones are around 10 years old now, and the oldest ones are about 17 years old. I could pick up the older ones all day on Craigslist for $5-$6k a piece nowadays… but your heart is in the right place. I hate the YOLO trend, too.
Go for the new Maserati coupe. Beautiful!
Nah (even if I could afford the Maserati). My ’06 Subaru should last me the next 10 years or so. I’ll probably start looking for something new (well, gently used) when it gets close to 300,000 miles.
Doesn’t a national sales tax target spenders, since if you are a saver, you aren’t spending?
Perhaps if we save too much, we’ll have a national savers tax. Guess it’s happening with interest rates tanking. No inflation yet though.
I love it. It’s not a sin to indulge yourself once in a while. We deserve it.
Great piece.
Never heard of the saying. Sounds like what teens and 20-something year olds would say and spread on FB. At least they got the Bank of Mom and Dad open!
BOMAD is alive and well, will be a significant source of funding for the next generation for sure!
It took me a while to get “BOMAD.” It is definitely alive and well!!!
I’m out about $100,000 to bank of mom and dad that will never be repaid. Sure could use the money right now. Might be able to retire today instead of 2-3 years from now..
Sorry, asking everyone to buy 10 Apple products so they don’t miss the next quarter and tank below $408!
A wise man once told me….. “you can’t take it with you but can’t go anywhere without it” and “only two people know and they both disagree”
A great article for the non retirement savers to read, I have found it is amazing how the non retirement savers attack the savers in conversations amongst friends.
Never heard of the “only two people know and they both disagree.” What’s the deeper meaning here?
I think the meaning here is that there are opposite opinions on each issue and both sides feel as compelled as the other in their positions. Yet that is only my thoughts…..of course someone could disagree ;)
Sam, the titles of your posts keep m coming back for more, always!! Jeeezz…I blew money in all the ways you listed except #8 and #10. Ughhhhh.. But it is never too late to right the ship, and did so with the inspiration from your blog…I thank you profusely for that!
Sure thing Tony. I don’t think it’s ever too late for the most part either. A lot of everything starts with the mind.
It’s easy to spend more. Just pretend that your money belongs to someone else.
A wise Englishman told me there are 4 types of money:
1. Money earned by you that you spend on yourself.
2. Money earned by you that you spend on other people.
3. Money given (not earned) to you by others that you spend on yourself.
4. Money not earned by you that you have to spend on other people.
Obviously item 4 will prove to be the most wasteful. There is no connection to having earned the money, and the money is not being spend on yourself. This unfortunately, is the category of the administrators and politicians that decide to vote for ‘goodies’ to gain favors. No feeling of pain or sacrifice, just allocating money they haven’t earned to different groups of people. If you get into that mindset, you will have no trouble spending more than 100% of your income!
-Mike
Hmm, is Milton Friedman English? Or did Milton copy this from an Englishman or vice versa?
https://www.financialsamurai.com/2010/07/30/the-four-different-ways-to-spend-money-by-milton-friedman/
Heh, definitely vice versa. Nice work posting this link.
Haha nice list Sam. I have a hard time spending money, although I do love to travel which is the one type of “splurge” I allow myself each year. I’ve never understood how some people get so fixed on luxury brands and expensive cars. I get more joy now saving money than I do spending money. :)
We’re hybrids, I guess. We spend a ton of the income on my husband’s student loans, but we recently splurged on a Netflix subscription. This is my fault; I wanted to get my Star Trek on. I still prefer to save and squeeze every last drop into Sallie Mae, but that doesn’t mean we can’t have some small pleasures.
Happiness usually lies between two extremes. I guess that Chanel bag will have to wait!
Can’t believe you splurged on a Netflix subscription and not a Hermes Grace Kelly bag. Shaking my head.
You forgot to mention those care dealerships that will do your taxes for you and then apply your refund toward your new car. You’ll probably have to have Gap insurance because you’ll be underwater before you leave the lot. Next go get those custom rims, you can actually lease those. Pretty sweet way to spend those dollars!
Very smart of them! Anything to extract as much money from the consumer as possible.
1) Buy a car equal to or greater than your annual income.
*** Audi S6…the dream car. Screw the Lamborghini Aventador.
2) Buy only brand name clothing.
*** Zenga suits…more specifically Ermenegildo Zenga suits…17 of them. (old college girlfriend can get me a discount, seriously)
3) Always get the latest electronic gadgets.
*** Pre-pre ordered the i-phone 7.
4) Take exotic international vacations every year.
*** Madlives bitches! (if you can find them…)
5) Always pay by credit even if you can’t afford it.
*** …with the Black American Express.
6) Get a fancy apartment.
*** …apartment BUILDING then convert it to one ginormous condo.
7) Buy a timeshare or vacation property.
*** Fail. I don’t accept sloppy seconds from low brow working class heathens.
8) Get multiple degrees without a plan.
*** Way ahead of you buddy!
9) Pay more taxes.
*** Powerball son! It’s called voluntary taxes.
10) Go to Vegas, baby!
*** Monte Carlo…bitch!
Sam, was this post written with me in mind (typing with sheepish smirk).
‘J’ in Clearwater Beach.
Good one…”Why (be) so serious?”
Damn, you got the iphone7 on pretty order? Very envious.
I was gonna suggest Monte Carlo, but I’m a patriot. Gotta keep US spending in the US!
I consider myself a hybrid. I save, but I also spend. Why not enjoy life sometimes. We can’t always worry about financial catastrophy.
good joke sam!
I know people like this. Sad, but true.
How can you expect to marry someone rich that will take care of you without spending lots of money on a new BMW, fancy apartment and designer clothes to attract them?! Its all part of the plan, Sam. Its all part of the plan…
True, like minded folks attract. Might be the best justification for buying a new Bimmer I’ve heard! Fake it until you find rich sugar!
Ha! Well played, dude. :-) When you lay it out like this, it makes many decisions seem even dumber than I originally thought they were, haha.
“Let the future come as it may. We’ll be ready.” Um, but not really. Lol.
Every year my wife and I go to this 1-day thing at a hotel where they try to get you to buy a timeshare. If you go and stay all day, you get a free (and it truly is absolutely free) cruise in the Carribbean. So each year my wife and I sit through these talks on how great timeshares are. I usually fall asleep, she studies for her classes, and we leave the day with a free cruise. In the little break times I listen to other people talk, and man, people are dumb, just like you say here. “If we pull out half our 410k we’ll have enough for this, and over a few years we’ll be able to replace all that 401k money…” Riiiiiiight. Or “this can be our special place away from the kids, and we’ve both been working for a few years, we deserve it.” Riiiiiight. People people people.
And you get a free Caribbean for two successfully? If so, I’m gonna do the same! I can say no to anybody!
A guy passed away from cancer that lives down the street that is a few years older than me (he was 46 with a wife and kids), really made me stop and reflect about spending and saving. I think some of the people on this site are probably guilty like me of being over-savers…I know “there is no such thing as saving too much”. Honestly though, like everything in life there needs to be balance, get your financial house in order, but hell don’t be afraid to live a little! I started about 4 years ago applying a formula to my earnings, with no debt and a comfortable lifestyle allowance I give myself, after all expenses I force myself to spend 30% of the cash each year on a splurge of some type & save 70%. You can’t take it with you and the last thing I want to do is have regrets. Funny part is, some people will read this article and take it literally!
I like that balance, spending 30% of your savings each year. Not good to sie with way too. Hopefully we have a painless year head start before we know it’s the end!
Being a lifelong saver, I think I will keep this post as a guide when I retire. On that magic day, I get to spend like there is no tomorrow. My income naturally increases because I won’t put aside savings. The only issue will be how many of these spending suggestions I can check off. I will have to ease into it otherwise I might go too far.
I think that once you reach 65, you get free tuition at the CSUs and UCs, unless they changed it. That might be considered savings though. BTW, the Dow did hit 14,000 briefly today.
That is the beauty of retirement isn’t it? Not having to save for retirement!
I promise I will help you with spending your fortune if you come up to SF. Harris’ steak house!
No need, I am very aware of SF’s finest. I plan on spending slowly with exciting experiences around the world.
haha, this makes me remember back to when someone told me it didn’t matter how much she spent because she could always get another sugar daddy. =)
Personally, we’re more on the saver than the spender side, but that doesn’t mean we’re living completely austere lives. I drive a fun convertible and live near the beach, but my car’s not a Bentley and we’re not beach front.
Did she find her sugar daddy?
Bentley Continental GT in black on black. Go for it!