You know who you are…teenager who loves to spend money like it’s going out of style. You spend money faster than it takes a snapchat to disappear. Money comes into your hand one minute and it flows out like water the next.
If that’s you, I have some special advice today. It’s unusual, maybe even secret advice you may never have heard in your life. In fact, I’m actually running a huge risk by even sharing this with you. Your parents may hate me for saying this because it might go against how they have instructed you to handle money. (That alone should excite you to listen up, right?)
But before I reveal this big secret about spending your money, you have to promise me something.
The promise I’m asking you to make is to read this entire post. You are going to love what I have to say about spending money but you can’t take it as stand alone advice without understanding the bigger picture. As they say, the devil is in the details so I’m asking for five minutes of your time to help you avoid failure on this issue.
Ready for the big, secret advice? OK, here goes…
Go ahead and spend money because you’ll never know a time with fewer financial obligations than you have right now.
Now remember that promise to read the rest of the post? Good…because I’ve got some serious cleaning up to do with the mess I just created.
Six Possible Reasons You Love to Spend Money
Have you ever thought about why you love to spend money? Don’t fret if it’s never crossed your mind. Most adults haven’t considered it either.
Based on your age right now (ages 13-19) one of these issues is likely driving you to spend money all the time:
1. You don’t understand yourself. Believe it or not there are actually personality types that are more prone to spend money than others. Some people are natural savers while others are natural spenders. Put me in the natural spender’s camp…I love to spend money!
I didn’t realize that about myself though until I was in my 30s. Several life events triggered some reflection and soul-searching on my part. (I even took some personality tests to help with this.) Many issues about my financial habits clicked when I figured myself out.
Personality is not an excuse to spend but it can create a natural tendency for you to want to spend.
2. You don’t work for your money. I know many teens that are just given money by their parents. You didn’t do anything for it. You didn’t work for it. It was just a handout…found money.
Consequently, you don’t value it as much.
It’s the difference between caring for a car that you bought versus simply using your parent’s car. You’ll freak out if soda is spilled in the back seat of your personal car…not so much if it’s your parents. You’ll clean both up but you’ll be more ticked it happened in your own pride and joy (…and your parents will be more ticked if it happens in theirs).
3. You lack discipline. I’m not sure anyone likes discipline or likes to be disciplined. We like the outcome of what discipline produces in our life but the actual process of discipline is painful. It’s no fun in the moment.
But being disciplined about money teaches us delayed gratification. That’s a big grown up term that means you forget about the pleasures of the moment for a reward that will come later. I sure didn’t get that concept when I was your age.
4. You can’t see the future. When I was a teen it was really difficult to see myself 20 years down the road. I was more interested in my basketball skills, my friends, and the homework I had to do every night. Picturing my future life most of the time was an afterthought.
That’s really important though in regards to how you spend money in the present. If you can’t project forward with your thoughts, then you can’t see how your current money decisions impact your future. To you money and the things it brings are a present reality only, not a future consideration.
5. You want to have fun and fit in. Having fun and fitting into a social crowd represent two of the most powerful driving forces in your life. Most likely it’s the biggest reason you are spending money so rapidly. Money buys access to fun and when we are having fun with friends we fit in.
Spending money can help solve both needs. It’s not the only way to solve them but it’s probably the easiest way to resolve both problems. And unfortunately, you are probably looking for the easiest path to gain the biggest results. Life doesn’t work that way.
6. You haven’t faced financial hardship. You might not want to hear this but, financially speaking, you have it easy right now.
You have not had to face the responsibility of putting food on the table…or providing shelter…or paying insurance.
You don’t know what it’s like to be out of work and have people depending on you.
You aren’t remotely considering what a life of retirement with no substantial wealth means.
Because you have not experienced some kind of financial hardship, money to you is like a plaything. It’s Monopoly money to spend freely with no real consequences.
Did you see yourself in any of those categories? Not all of them probably describe your mindset but my guess is you are dealing with at least one issue on some level.
If you are don’t be discouraged. You are not alone. I went through this at your age and many others have to.
The trick is though growing out of your financial childhood…the sooner the better. Don’t be like me and wait to learn about yourself until you are 30.
There is nothing wrong with spending your money as long as you have the right perspective about it.
That’s what I’m going to talk about in the final section. So keep reading…you promised!
If You Are Going to Spend Money Do These Things First
As income roles into our house each month my wife and I have to prioritize where that goes. Sure we’d love to throw caution to the wind and flip those bills out of our hands. That would be really cool in the moment but not so much in the end.
We have obligations to meet with our money and so do you. Whether you worked hard for the money or your parents simply gave it to you, you have a responsibility to make wise choices with it. And above all, you must come to understand and appreciate this truth:
Money is sacred and finite. If you don’t respect money it will end up ruling your life and you’ll have very little of it.
Don’t misunderstand…money is not something to be worshiped or reverenced like one might do to God. But to use another spiritual term, money is sanctified (set apart) for our daily needs. Without some form of currency we couldn’t survive to any reasonable standard of living.
The Bible tells a story of a young man who once received an early inheritance from his father. He went off to a foreign land and spent it on whatever he pleased. The Bible says he wasted everything he owned in an effort to make himself feel good.
When he had nothing left and no means to support himself do you now where he ended up? Feeding pigs for a local farmer. We are told he was so hungry he wanted to eat the food given to the pigs. Yuck!
That’s not a place I ever want to end up.
So, when money finds it’s way into your hands follow this pattern in spending it:
1. Spend on necessities first. This should be the first priority…things you absolutely need. For you this could include gas for the car and clothing. Perhaps it’s also food, housing and utilities if you are living on your own.
The trick here will be determining what’s truly a need and what is something you just want. There is nothing wrong with wanting stuff but don’t lie to yourself and say it’s a need. A new PS4 or the latest iProduct is not a need.
2. Spend on your future. Although really challenging you have to begin to think ahead. For you this means spending money to prepare for and fund college or any other career goals you might have. Your parents will probably help with this but many of you will bear part of the cost of college.
If you waste all your money now you won’t be able to fund your education. In fact, the #1 reason students are now dropping out of college is not because of grades…it’s financial related issues.
3. Spend on things that create short and long-term value. Once your present and future is taken care of you can then look to spend money on things that bring personal value to your life. What I’m talking about here are activities that enrich you as a person or are done with friends and produce lasting memories.
You probably want this last one to be first. Sorry, it can’t be. Fun has to come after responsibility. It’s the way the world works so you better just get used to it.
The good news is though you can do all three of these at once as long as you give them the priority they deserve. And the best way to determine how to spend money is to create a zero-based budget. That will help you figure out how to use the money you have coming in each month.
People that consistently budget their money and passionately stick to it win with money. It was the biggest thing that turned my financial habits around.
Some Final Thoughts…
If you’ve read this far congratulations are in order. You have more focus than most young people I know. And thank you for fulfilling your promise to read to the end.
Spending money is really fun. And despite what you may have heard there is nothing evil about it. I believe when done properly and in moderation it’s actually beneficial for our financial lives.
Spending is not the only avenue though in which money can head. To become a 100% bona fide financial ninja you’ll also have to pursue two other activities in which all successful and wealthy people participate…saving and giving.
When giving, saving and spending come together in the right mix your financial life will be a thing of beauty. You’ll experience a symmetry and peace that many adults don’t even have.
You’ll set yourself up for a life of success if you can learn these principles now. It’s never too early to start.
(I’d love to hear what you think about this. Share your thoughts in the comments below. And if you or your parents are looking for ways to save money, I’ve outlined 99 of them in a document you can access for free. Just enter your email in the form below and get the list that will kick-start your journey to financial freedom. )
Questions: What do you love to spend money on the most? Is it easy or hard for you to spend money? Do people always criticize you for spending money and if so, why is that? Are you actively giving, saving and spending?
What’s the biggest thing you are worried about in your future?
For adults…what would you say to the teens and college students out there about how to handle their money? What was it like for you at that age? Did spending money come easy to you?