How often do you ask yourself if the decisions you make, with regard to spending, are optimised towards long term happiness? For example, you need a new car and you’ve got your eye on the expensive model of your dreams. Buying it will put you in serious debt, therefore you’ll need to tighten your budget and lifestyle considerably for the next few years to pay it off. To excuse the expense, you tell yourself you need a new car anyway, so it might as well be the one you’ve always wanted.
Despite the fact that the car will most certainly decrease in value and won’t help your financial situation, the momentary happiness you’ll feel about owning your dream car overrides this knowledge. At the time, it seems worth it. However, when you’re struggling to pay an unforeseen bill and can’t afford your yearly holidays, it’s not long before unhappiness creeps in across all areas of life, long after that ‘new car smell’ is gone.
Optimised spending means questioning momentary happiness as opposed to lasting benefits.
What is optimised spending?
Optimised spending leads to a much more sustainable form of happiness.
Optimised spending basically means making choices that hold the most value, in terms of financial success and happiness in life. In other words, it means spending smarter. With the example above, a smarter spending choice would be to buy a new car within your budget and still experience the happiness it brings, without restricting yourself to years of debt and sacrifice.
Keep the goal of owning that dream car, by all means, and start saving for it. In the meantime, you won’t suffer from the sense of lack serious debt creates across all areas of your life, yet you’ll still have a new car. From big choices like this, to much smaller ones, optimised spending leads to a much more sustainable form of happiness.
Sustainable, long term happiness stems from smarter spending on truly valuable experiences.
Forget about spending less - just spend smarter
Think about all the things you spend money on just out of habit, or with the impression that those things make your life happier. While buying something might bring a feeling of happiness at first, this usually wears off quickly. Yet, in all likelihood, you’re still paying for it regardless.
The biggest culprits are often fixed expenses like rarely used gym memberships, pricey phone contracts renewed without thought, subscriptions to TV barely watched, unnecessarily high rent payments and loans for objects that have long since lost their appeal.
As far as happiness goes, all these expenses do is put a strain on your budget and lifestyle, with very little payoff. Think about how much money will be left over when you reduce fixed expenses that don’t contribute to sustainable happiness, and what you could use that money for.
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For one, you’ll have more money for unforeseen expenses, which increases peace of mind. Spending smarter means giving yourself the ability to save for an investment towards financial wealth. It also means being able to put more dollars towards regular experiences that truly bring long term happiness, like holidays and more time with family and friends.
Switch your mindset to optimised spending for happiness
Best of all, switching your mindset to optimised spending is easy. Each time you’re about to make a purchase, sign a contract or splurge on a whim, ask yourself how it truly contributes to overall happiness in life. Ponder whether or not it’ll lead to financial growth. If not, is it really worth the lifestyle sacrifices you might have to make to pay for it?
Focus on spending in terms of what makes you truly happy in the long run, without any negatives like debt or having to decrease your lifestyle. At the end of the day, optimised spending means mindfully getting the most out of every dollar you earn, by avoiding expenses that don’t actually make you happy in the long term.
This information is provided by DPN Pty Ltd ABN: 94 630 700 186 Australian Credit Licence 514759. DPN Finance Pty Ltd is an authorised credit representative 504129 and related entity of DPN. Credit for Dream Big 100% Offset and Work Smart 100% Offset is provided by Adelaide Bank a division of Bendigo and Adelaide Bank Ltd, ABN 11 068 049 178 and Australian Credit Licence 237879.