Three Rules for Wise Spending in Good Times and Bad

There is a phrase I learned from my grandmother that has taken me four decades (give or take) to unlearn:

“Pull in your horns.”

Throughout my 20s and 30s, I spoke with my grandmother every Saturday morning—she would call like clockwork at 9am, much to my roommates’ and then my husband’s chagrin. She’d always ask if anything exciting had happened. And in those inevitable times when I relayed some setback, she’d reply, “It’s time to pull in your horns.”

Which basically meant, stop spending money.

It makes sense that she felt this way; after all, Gommy did live through the Depression. But here’s what I know now: Money is energy. If you try and cut off the outgoing flow, you will also cut off the incoming flow. “Pulling in your horns” = contraction. And I don’t know about you, but I don’t want the money in my life to contract.

I also know that debt is a real problem. There is such a thing as the reality of keeping your spending in balance with your earning, saving, donating and investing. But you can’t let numbers alone decide when and how you spend.

Here then is my motto for finding the right balance of scrimping and saving. May they inspire you to value what you have, give yourself what you need, and create a healthy, trusting relationship with money along the way.

Use what you have. Buy what you need. Pay what it costs. (Click to Tweet!)

Let’s take a look at these one by one:

Use what you have.

Here’s how you moderate your spending: Look at what you’ve already got.

We definitely live in a consumerist culture—want to change something in your life? Buy new stuff! And said “stuff” may include anything from clothes for a new job to an expensive degree.

Odds are, you already possess a good percentage of the things you need to move you forward. Just as your closet likely already contains several key pieces of a work wardrobe, I’m willing to wager you already possess many of the skills and traits that will empower you in any new endeavor you want to pursue.

This does require you to look with fresh, non-judgmental eyes. Discerning eyes, yes, but judgmental, no. An example is, instead of thinking “I have nothing to wear,” go shopping in your closet. When I was in Alabama last week, I had a booksigning at my hometown bookstore. Instead of going out and buying a new dress, I looked in my closet first. And I ended up seeing a dress, sweater, necklace and shoes that I had never considered wearing together before. And it was perfect.

Bottom line: New isn’t necessarily better than what you already have.

Buy what you need

Sometimes you simply don’t already possess what you need for that new reality. (For that very same trip that I knew would involve swimming, I only had one very stretched out bathing suit; I bought a new one.) That’s when you start shopping.

The key word here is ‘need.’ When you stick to what you truly require, you help keep spending in line.

Sometimes, though, ‘need’ is more than just the bare necessities. You may ‘need’ support from a professional to get you through a tough time. You could live without that help, probably, but a lot less successfully. For example, when I got sick of carrying baby weight after two years of trying to eat healthfully that made no difference in my spare tire, I invested in seeing a naturopathic physician. (She helped me change my diet and support my thyroid; the results benefited way more than just my waistline.) Or when I got sick of feeling bad about myself because I didn’t exercise regularly, I signed up for once a week sessions with a personal trainer. I could have just done push-ups on my own and started running, except that wasn’t what I needed. What I needed was accountability, knowledge and camaraderie. So that’s what I bought.

Pay what it costs

Here’s where things really get interesting. This is about switching your lens away from dollars and toward value.

How much will what you’re buying truly benefit you? And how much is your time and the time of the people who produce the thing you need worth?

You could drive all over town looking for the lowest price, or comparison shop on the Internet for hours, or you could go to the local store and buy it there. You have to decide what you value, which will be different at different times. When time is at a premium, you may value convenience above all else. This makes shopping online a great option. At other times, you may value the expertise of a knowledgeable salesperson and investing in your local community; that’s when you head to your local specialty store and pay up.

This is really a gut feel on your part—to keep the clothes analogy up, when I needed casual Saturday jeans, I went to the thrift store. When I needed fun play clothes for summer because I only had one pair of shorts that gave me a Mom butt, I went to the resale shop, and I got a great cocktail dress and work dress while I was there. But when I need bras that will be comfortable, look great, and last a long time, I head straight for the department store and pay retail, because I value that they have numerous styles in numerous sizes, nice dressing rooms, and knowledgeable sales staff. I don’t believe you win because you paid the least. I believe in paying the right price, which will run the gamut from bargain basement to top of the line.

What are your spending philosophies? I’d love to hear them below!