Ah, it's good to be home and finally getting back into something of a routine. As part of that routine, I've been reading hundreds of e-mails, including quite a few reader questions — like this one from Annie. Annie writes:
I'm 25, and starting to take personal finance seriously. I'm in graduate school, and am very fortunate to have an educational trust that allows me to do this without loans. Knowing how lucky I am, I live well below the means the trust could provide, hold an intense part-time job, and am working towards a career that will (hopefully) make sure my kids are given the same gift I was — the freedom to get the finest education they can manage without major debt.
Between my job and my trust, I have a good deal left over every month. I know I should do something productive with this money, but right now I'm mostly spending it on other stuff.
- I'm using some of the extra money for a CBT therapist.
- I bought myself a ticket to a museum gala I've always wanted to attend.
- I've decided to buy myself a massage once a month.
I don't spend a lot on clothes or waxing or anything like that, because I'd rather do other things. I rarely go out to eat. I don't have a car. I live in an unfashionable part of my city. I have no debt, and I save about $400 every month.
I think I'm doing okay, but I'm spending so much on “self improvement”. Heck, right now I'm also looking at brushing up on Spanish and taking an econ class (for fun!). Plus, I'm thinking about going back to the personal trainer I had for a while to jumpstart my physical fitness.
Here's my big question: How much do people spend on “self improvement” and cultural stuff? How much becomes indulgent? Will I end up regretting all of this later? Does all this dabbling make me a trustifarian dilettante?
Leaving aside Annie's awesome financial situation (cue Napoleon Dynamite voice: “Lucky!” — I wish I could have been a trustifarian dilettante), I want to address her main question: How much should a person spend on self improvement?
I've wondered the same thing. It's no secret that I'm something of a personal-development junkie. I love reading about self improvement. More than that, I love putting what I read into practice. (Heck, there's even been a self-improvement category at GRS since day one!)
Still, I recognize that there's a lot of useless information out there. Plus, people like me are inclined to spend on self-help material…and then never act on it. (I may have read tons of books on self improvement, but I've only acted on a handful.)
Is it okay to spend on on self improvement? Absolutely. But you have to be smart about it. I give myself a little more lee-way for self-help spending — but not too much. It's as easy to spend foolishly here as anywhere else.
Here are a few rules I've made for myself to be certain I'm paying for actual personal development and not for pipe dreams:
- Focus on one thing at a time. I know from experience that it's tempting to tackle a lot of self improvement at once. This is a recipe for disaster. The more I try to change at once, the less I change at all — and the more I spend. Instead, I've learned to limit my ambitions. Just as I pursue only one resolution every new year, I try improve just one or two aspects of my life at a time. Otherwise, I end up spending a lot of money to do nothing.
- Pursue your goals. I want to do everything. I want to speak fifteen languages, play a dozen sports, fly an airplane, and sail a boat. But some of these things are just daydreams. Why do I want to fly an airplane? Instead, it makes more sense to spend my time and money on improving things that help me meet my goals. Since I want to travel, for example, I really should learn a language or two. And because I want to lose weight, it's great to spend on a gym. But as much as it appeals to me, there's no point in paying for woodworking classes or power tools. Sure, I'd love to make my own furniture, but that doesn't really mesh with my long-term plans.
- If you don't use it, stop paying for it. A lot of spending on self improvement is based on wishful thinking. We sign up for a gym, promising that we'll go every day. Then we only go once, but we keep paying. This is foolish. Know yourself. Signing up for a gym won't make you fit. Paying for a computer class won't teach you programming. You still have to put in the time and effort. If you see you're not doing this, ditch them. (And don't worry about sunk costs.)
Also, it's important not to delude yourself. In general, a massage is not a self-improvement expense; it's a luxury. There's nothing wrong with indulging in luxuries now and then, but don't pretend they're something they're not. (I got my first massage two or three years ago because my doctor prescribed it as part of my physical therapy — I had a running injury — but subsequent massages are luxuries, pure and simple. If only there weren't a massage therapist in the office next door…)
But to get back to Annie's question: How much do you spend on self improvement and cultural activities? I'm not sure what's normal, and I'm curious to hear what GRS readers have to say. (I suspect answers will vary widely.) Kris and I don't spend a whole lot on cultural stuff (except for when we travel), but I probably spend a few hundred dollars a year on self improvement: books, classes, computer programs, and so on.
What about you? Do you pay for personal development? What sorts of things do you buy? How much do you spend? Which costs are worth it, and which are not? What rules have you developed to be sure you're not wasting your money? What advice can you give Annie about deciding which expenses are worthwhile?
Author: J.D. Roth
In 2006, J.D. founded Get Rich Slowly to document his quest to get out of debt. Over time, he learned how to save and how to invest. Today, he's managed to reach early retirement! He wants to help you master your money — and your life. No scams. No gimmicks. Just smart money advice to help you reach your goals.