One of my biggest financial pet peeves is when people like Kevin O’Leary and Dave Ramsey revive the “buying coffee makes you poor” trope. It’s not that I love coffee. It’s that I don’t see the usefulness in shaming people for buying things that make them happy. I’d much rather talk about the best things to spend money on.
After all, rich people constantly spend money on things that make them happy. Those things, more often than not, just happen to also make them richer.
And just like people lose their appetite for junk food after noticing how great vegetables make them feel, wealthy people have no problem being stingy about things like coffee because they recognize how much more energizing it is to use money wisely.
Grasping this logic is how I kicked my poor spending habits with ease after years of struggling with impulsive purchases.
And that’s the point of this article. Ideally, every dollar you spend on these items will be a dollar you don’t spend impulsively on junk. We’re not abolishing the idea of budgeting here. We’re just coming at it from a different angle.
As always, please remember that everyone’s financial situation is unique. While the action steps throughout this article are quite conservative, I’d still encourage you to speak with an advisor one-on-one before following them.
18 best things to spend money on
Remember to prioritize! Your financial obligations (like paying off debt) come before any of the discretionary items on this list, which is in no particular order.
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Books allow you to pick through some of the world’s most brilliant minds – and for practically no money at that. Seriously, for less than the cost of an Uber, you can have a leading expert share their thoughts with you. How cool is that?
Most of my personal finance breakthroughs came from books like I Will Teach You to Be Rich by Ramit Sethi, Total Money Makeover by Dave Ramsey (I don’t agree with his “coffee makes you poor” logic but he’s got some great ideas), and The Slight Edge by Jeff Olson. Altogether, those three books cost me less than $100 but have helped me save and invest hundreds of thousands of dollars wisely. That’s an unbeatable return.
Of course, you don’t have to limit yourself to personal finance books. Anything that enhances your worldview and makes you a more informed person is worth reading. It doesn’t even have to be non-fiction; fictional storytelling has tremendous benefits as well.
Given how cheap books are, don’t be surprised if spending more money on them completely reshapes your understanding of value.
Action steps: Think of one topic you’d like to learn more about, find a relevant book, and budget for it. Repeat this whenever you finish the book.
2. Tools/apps that make your life easier
In my opinion, people tolerate too many little miseries that could be solved by simply spending a bit of money. I mean, we’ve all put ourselves through hours and hours of unnecessary frustration because we were too cheap to buy – or sometimes even go looking for – a solution. Enough, I say!
I experienced this all the time when I worked as an independent contractor. Clients would never buy tools on my behalf so the decision was always mine as far as whether to keep doing things the hard way or just pony up the cash for a time-saving solution.
I never regretted taking the latter option, whether it meant buying a second computer monitor or upgrading my phone plan to include unlimited data so I could make Zoom calls on the road rather than keep clients waiting.
The bottom line is this. Unless your problem is really obscure, a solution exists in one form or another. Finding and using it allows you to focus on creating unique value in life rather than constantly hitting unnecessary speed bumps. That sounds like money well spent to me!
Action steps: Identify an issue that regularly affects your productivity or enjoyment of life. Then, find 2-3 potential solutions, research them thoroughly, and consider buying/implementing the best one.
3. Things you use every day
I firmly believe that if you use something every day, you should buy the absolute best version of it you can afford. Cheaping out on something that sees such rigorous use will mean having to buy frequent replacements, which gets expensive fast.
Of course, there are also practical benefits that come from using something well-designed (which typically costs more).
For example, right now I’m typing on a $200 mechanical keyboard. I don’t mind having spent that much money on a slab of buttons because I write thousands of words per day for a living and find a mechanical unit much easier on my hands.
On the flip side, I definitely cheaped out on my office chair and I curse myself for it every day. It worked well for a few months but now the back just won’t stay aligned no matter how much I adjust it. I’ll have to head to Staples and buy a better one soon when I could’ve just bought something better, to begin with.
Other common everyday items you should avoid cheaping out on include:
- Coffee Makers
- Toilet Paper
Action steps: Identify something you use every day and ask yourself if it’s the best version you can afford. If your answer is no, make a list of the missing features you need and research options that fulfill them. Purchase the best one you can comfortably budget for.
4. Maintaining things you already own
Once you’ve purchased a reliable, well-designed product, make sure it lasts as long as possible by performing the necessary maintenance. In fact, you should include maintenance costs in your budget when determining whether you can afford to own an item, which is different from being able to buy it.
Your car is a classic example of a product to which this tip applies. Also, don’t forget about your air conditioner, water heater, and anything else that might require regular preventative maintenance.
Action steps: Identify a few important items you’ve neglected to maintain and set aside a budget to have them looked at.
Travel is widely considered to be atop the list of things to buy when you have money.
For one, it’s not really a thing but rather an experience – and research has shown that people who spend money on those tend to be much happier for it. Travel also, quite literally, broadens your worldview and makes you a more engaging person, which can have all kinds of benefits in your personal and professional life.
While traveling on a budget can bring loads of happiness, it doesn’t hurt to splurge within your means on things you believe will enhance your experience.
I definitely walk the walk here. While I’m very modest in most aspects of life, I usually fly business or first class on trips longer than two hours and stay in my destination city’s top-rated hotel. I also try to budget for at least one meal at a critically acclaimed restaurant. In addition to making my trips more memorable, these add-ons expose me to people I wouldn’t normally mingle with on a daily basis.
Action steps: Identify a location you’d love to visit and 2-3 aspects in which you’d like to splurge. Calculate how much the trip would cost and set money aside each month to make it happen.
6. Seizing spontaneous opportunities
Sometimes, exciting opportunities present themselves unexpectedly and we’re too afraid to commit the necessary resources. In these situations, it can be very tempting to say, “Ah well, I’ll do it next time.”
But will there be a next time?
If you have the means to take advantage of a valuable opportunity the moment it arrives, what’s the harm in doing so?
Say you fail. Alright, so what? The lessons you’ll have learned will increase your chances of success if you ever seize a similar opportunity down the road. If you have a really bad time and never want to hear about any of it again, at least you’ll have mentally freed yourself up to pursue other things.
Opportunities are among the best things to spend money on because you really can’t lose as long as you’re not throwing yourself into debt or betting everything on a single leap.
Action steps: Identify an opportunity (or type of opportunity) you’ll seize immediately when it arises. Perhaps there’s a business you’ve always wanted to invest in or a city you dream of relocating to. Whatever it may be, write it down and consider setting aside some funds so you can be ready.
7. The future
Being able to set money aside for the future is one of life’s greatest privileges, especially considering that the vast majority of people are living paycheck to paycheck.
The privilege is not purely based on your existing wealth, though. Even people with modest or average incomes can start saving and investing in a brighter future once they have the know-how. Check out my post about how to invest with little money.
Saving and investing for the future can be very empowering if you’re struggling with poor spending habits because it shows you money’s true potential.
That was certainly my experience. When I started investing three years ago, seeing my assets grow in value was the final nail in the coffin for some of my most destructive spending habits. I no longer saw myself as spending $100 here and there on frivolous things. Rather, I saw myself as spending the much greater amounts that money could have grown into if I invested it wisely.
Action steps: Calculate what your most important goal (be it retirement, buying a house, or anything else) costs. Then, determine how much money you need to set aside each month to make it happen. Make hitting that amount a priority every time you get paid.
8. Paying off high-interest debt
I know, I know. You’re probably scowling and thinking, “Investing? Paying off debt!? I thought this was going to be a list of fun things to spend money on!” Bear with me, though.
Certain types of debt can carry double-digit interest rates. New credit cards, for example, have an average APR of 18.61% according to WalletHub. As such, paying money towards a credit card with that interest rate immediately generates an 18.61% return for you.
If you – like the average American or Canadian – carry astronomical amounts of personal debt, it won’t be long before you free up thousands of dollars that would have otherwise gone towards interest payments each year. You can spend that money on whatever you like!
Action steps: Work with an advisor to determine which debts make the most sense to pay off first. Then, figure out how much money you can comfortably direct towards those debts each month beyond what you’re currently doing.
9. Your mental and physical health
Health is priceless. And yet, many of us neglect it in favor of short-term gains.
Speaking from experience, though, having a few extra dollars in your bank account or being recognized as the top-performing employee at work will be of little comfort when you’re laying on a hospital bed.
You have to take care of yourself. There’s no getting around it if you actually want to be alive and healthy when your hard work produces its finest yields.
Here are some health-related items you might consider spending more on if you have the means:
- Gym Memberships
- Personal Training
- Physical Therapy
- Medical Checkups
- Proper Shoes
Action steps: Identify a few areas in which your health is less-than-ideal. Next, pinpoint products or services that could help you improve in those areas and incorporate them into your budget.
Attempting to achieve meaningful and lasting success without some form of education is like trying to win the Indy 500 in a Flinstones Footmobile. You’ll make an absolute fool of yourself.
While getting an education doesn’t have to mean going to university, I’m not one of those guys with a personal vendetta against that sort of thing. If research leads you to believe a degree will help you get ahead (as is often the case with many resilient and essential jobs), get a degree. It may be among the best investments you ever make.
There are also some great online courses that provide knowledge and practical exercises you wouldn’t necessarily get from reading a book or trying to teach yourself. Websites like Coursera host certificates from companies and institutions like IBM, Google, Stanford, Duke, and more.
Many programs are free but if you find something that costs a few hundred bucks, are you really going to regret the investment in yourself? If it’s truly useful (and you should do your research to ensure it is), I bet not.
Action steps: Identify an area related to your line of work (or ideal field) in which you lack knowledge. Find an online course that could help you acquire this knowledge and enroll in it.
11. Your own ventures
Have you always wanted to build something for yourself? Perhaps a 3D printing business, blog, Shopify store, brick and mortar shop, or something else? Your own ventures, whatever they may be, are among the best things to spend money on, for a variety of reasons.
For one thing, you’ll learn very valuable lessons whether you fail or succeed. If you succeed, the rewards you reap could be far greater than what you’d find with a typical stock market investment or day job.
Building your own thing is also just downright exciting. The moment I set up this website, I felt on top of the world because I finally made a move I’d been planning for years.
It’s also arguably easier than ever to turn your venture into something successful thanks to the plethora of resources out there. The best ones tend to cost money, as do the practical steps involved in setting a business up the right way. As long as you’ve done your research and have a solid plan, it can be a wise investment.
Action steps: If you have a business idea, conduct thorough research to ensure its viability. Carefully consider the risks and whether you’re in a position to take them. If so, identify the steps involved with getting started and set aside a budget.
12. Supporting your friends’ (legitimate) ventures
If you’ve surrounded yourself with productive people, it’s very likely a few of them will launch interesting ventures you can support. I rank this among the best things to spend money on because it can be highly beneficial for everyone involved.
For one, it’s just nice to support your friends early on. Your presence, genuine interest, and feedback can motivate them to keep pushing. You’ll also build goodwill, which has a habit of coming back around.
There’s an important caveat here, though.
Before supporting a friend’s venture, you do need to evaluate its legitimacy. We’ve all had friends approach us with “business ventures” that were very clearly just pyramid schemes. Don’t support that crap. If your friend genuinely thinks they’re onto something there, you’re not doing them any favors by playing along. If they know they’re involved in a scam and are trying to rope you in, they’re a shitty person and you should cut ties.
Action steps: Look at those closest to you and ask yourself if they have any projects or businesses you could support in a tangible way (i.e. placing an order with their online store). Set money aside in your budget to do so.
13. Helping the less fortunate
You never have to look very far before you find someone who could use a helping hand. Aside from the fact that it’s good to elevate others, there are many personal benefits to fulfilling such a need.
It doesn’t have to be some grand, altruistic gesture, either. Restaurants and other hospitality businesses tend to be devastated by tumultuous circumstances like recessions and pandemics. If you’re fortunate enough to dine out or travel during these times, why not leave a little extra tip? On your own, you won’t change the recipient’s life but you can certainly brighten their shift.
Spending money on helping others can also take the form of sacrificing time or services for which you would normally be paid. That can mean volunteering, helping a business associate who would do the same for you, or giving up a shift to be there for someone.
However you approach this, it’s hard to imagine having regrets as long as you don’t severely neglect your needs in the process.
Action steps: Identify a person or cause you would like to help financially and incorporate it into your budget. If helping means giving up time for which you’re typically paid, make sure to budget for the reduced income as well.
14. Showing your appreciation
Showing your appreciation for someone can go a long way. Business leaders understand this, which is why corporate gifting is a $125 billion industry in the United States alone.
While you should certainly buy thoughtful gifts for valuable business associates, don’t ignore the importance of showing appreciation in more personal settings, too. A thoughtful gift card for a friend or family member may not further your career ambitions but you’ll find your life enriched in arguably more meaningful ways.
As much as I hate to be a downer, the people you love won’t be here forever – and neither will you. Thoughtful gifts are among the best things to spend your money on because they go beyond words and give people something tangible to hold onto. Those feelings can be part of your legacy.
Action steps: Think of 3-4 people you haven’t expressed enough appreciation for lately. For each person, identify a gift they’d really appreciate. It doesn’t have to be expensive; just try and tailor it to your unique relationship with that person.
15. Your image
Image is important. This is something I failed to recognize for years. I didn’t put much thought into how I dressed or kept my hair. In fact, I thought doing so would be a complete waste of time so I just winged it.
Developing an intentional image is not a waste of time, though. It affects how others perceive you and – just as importantly – how you carry yourself.
You’ll probably notice this (even if just subconsciously) if you ever go to a business meeting looking like a hastily slapped-together video game avatar. Unless you’re exceptionally confident, you’ll have a hard time projecting yourself and your ideas above the more put-together people in the room.
Visit your hairdresser on a consistent basis. Upgrade your wardrobe. Develop a skincare routine. It’s a lot harder to come across as superficial with these things than you might think. You’ll be fine.
Action steps: Identify aspects of your image that you’ve neglected. Set money aside in your budget to improve on them.
16. Improving existing skills
There’s a great (and really short) book called Mastery: The Keys to Success and Long-Term Fulfillment by George Leonard. Reading it roughly a year ago completely changed the way I think about skills.
Most people stop progressing in a particular area once they get just barely comfortable enough to do it on their own. As a result, they never get past what Leonard describes as the “hack” stage.
Enhancing your existing skills is one of the best things to spend money on because achieving true mastery brings a level of satisfaction you can’t really fathom when you’re just hacking it up.
Humble yourself and start learning again, even if it means paying someone to mentor you or taking a pass on unchallenging work in favor of fewer, more complex projects. It will pay off in the end once you’re functioning in a higher percentile.
Action steps: Pinpoint existing skills you haven’t sharpened in a while and identify steps you can take to keep progressing. Set aside a “progression fund” you can tap into to make that happen.
17. Your basic needs
While one might assume needs are just a given in any budget, it doesn’t always work out like that.
When I had really bad spending habits, I would be splurging on unnecessary things one minute and fighting to get the lotion out of an empty bottle the next.
Needs are needs. They should always be taken care of first. If you’re prioritizing frivolous things above basic needs, you probably have some impulse issues like I did.
You may also just be too cheap to address your needs adequately. Why do that to yourself, though? Are you really saving all that much money relative to the difficulty you’re putting yourself through?
Action steps: Identify needs you’ve neglected and incorporate them into your budget going forward.
18. “Cheat” items
I’ve saved this one for last because it’s really not something you should be thinking about until you’ve got other aspects of your personal finance under control.
“Cheat” items are some of the best things to spend money on because they can keep you grounded. Many people take off sprinting on the road to financial freedom as if it’s a race and they’re not allowed to do anything else but slash expenses and pay bills.
Good luck not burning out and falling back into bad habits if you take that approach, though.
In my view, as long as you’re on the road, it’s okay to jog every once in a while, also known as treating yourself to a cup of coffee or a nice dinner. You can use these purchases to celebrate little wins along the way.
As long as you budget for fun (rather than just spending impulsively) and never take your eyes off the prize, you’ll be fine.
Action steps: Budget for a couple of small “cheat” items every month and perhaps one medium-sized item every year or so. You won’t have to feel guilty when you spend the money because you’ll have planned for it.
I hope this article has helped you rethink budgeting. While the brute force method of slashing all discretionary spending certainly helps some people get their finances under control, I’m among those who prefer allocating funds to beneficial things and letting the junk fall away on its own.
If you’re paying off substantial amounts of debt or have an otherwise strenuous financial situation, I’d encourage you to speak with an advisor about your budget. The action steps I’ve outlined in this article can serve as a great starting point for those conversations.