4 Best Ways To Spend Money for a Great Quality of Life, According to Graham Stephan
Written by
Peter Burns
Edited by
Amber Barkley
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Day-to-day, you’ll find no shortage of options for spending your money. However, many people use their money to impress others, an idea that has caught the attention of many internet finance experts.
Graham Stephan, personal finance expert, YouTuber and real estate investor, found that many finance influencers preach the importance of looking and dressing poor to become wealthy. Stephan agrees with the idea, citing how people purchase designer clothes and expensive cars to impress their peers but derail their finances in the process.
Instead of echoing the idea of simply dressing down, Stephan took the idea a step further. In a recent upload, he explained four ways to spend money to improve your quality of life instead of just trying to keep up with the Joneses.
Experiences
Investing your money into experiences can result in happy memories that continually bring you joy over time.
Stephan said experiences are often a better investment than material things, because we’re more likely to recall how we felt while doing something than when buying an item.
Research backs Stephan’s idea: In 2020, Amit Kumar, an assistant professor of marketing at the University of Texas at Austin, conducted a study with 5,000 participants and found people derive more happiness from spending money on experiences over items.
Spend With People
Piggybacking on the idea of spending on experiences, spending money with others is another way to increase your happiness. When you spend money with or on others, it often reinforces your connections with them. You might spend your money to enjoy a nice dinner or a night out or to give thoughtful birthday or Christmas gifts.
You are investing in that relationship, which will pay off over the long term as you become closer.
Small Things
Stephan pointed out that spending frequently on small things is better for your quality of life than spending infrequently on large things. Making a large purchase can bring a lot of excitement but will simultaneously make smaller purchases less exciting. To reach that same feeling of excitement, you’ll need to make an even bigger purchase the next time.
Spending small amounts on a variety of things — like trips to the cinema, buying new books or playing a round of golf every now and then — will result in different experiences, so you’ll still feel the excitement without needing to spend more each time.
Enjoy the Process
A recent study by Capital One found that 73% of Americans make most of their purchases on impulse. Making an impulsive purchase can make you happy in that moment, but delaying your purchase can not only help you determine if it’s a good decision but also lead to more enjoyment.
Stephan offered the example of a vacation. If you book a vacation a day in advance and fly out to a resort on an island, you’re sure to have a great time. However, booking that same vacation months in advance gives you time to determine if it was the right decision and to enjoy the process. You’ll have more time to plan what you’ll do and anticipate how much fun you’ll have as the days get closer, maximizing the amount of pleasure you’ll get from that purchase.
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