Investing in Your Life Pays Off in the Long Term

Simple living is great. Avoiding shopping malls in favor of clothing swaps, cooking meals at home with your spouse, holding a music jam with friends instead of shelling out big bucks for a concert — all these activities not only save you money, but they also connect you more deeply with what you love.

In a sense, they make you more alive. Which is what getting rich is ultimately about: not simply achieving material wealth, but living a rich life.

Pay now, save later
Some things just shouldn't be scrimped on, though. There are expenses that save you money down the line. Some also save you time and improve your quality of life. It might be tempting to cut corners on this stuff, but the truly frugal person knows that laying out cash up front will pay off in savings later.

Consider these expenses an investment in your life. You'll reap material as well as personal rewards when you keep up with these areas of your life:

  • Your health. Preventative health care saves thousands on major medical costs every year. In addition to keeping up with your annual physical, be sure to get your teeth cleaned regularly. Dental insurance typically offers only partial coverage of major dental work, and those crowns can add up to huge dollar amounts in a hurry. Taking care of your health also means eating well and getting enough exercise. These things can be done relatively cheaply: You don't have to spend a fortune at Whole Foods or join a trendy gym to keep fit. It's worth putting some money into eating well and keeping your body moving, though. Look for bargains at your grocery store, but don't eat Fruit Roll-Ups instead of fresh fruit just because you have a coupon. Over time, you'll save money by staying healthy.
  • Your home. You don't need to live in a mansion. A smaller, cheaper home can often bring you more joy because it comes with fewer financial headaches and less labor to keep it clean. Whatever roof you choose to lay your head under, you'll need to maintain it. Unless you rent, or have a condo association managing it for you, it's important to stay on top of upkeep on your property. Like your health, preventative maintenance can go a long way towards saving you money and guarding against real harm in the future. Fixing your leaky roof promptly, replacing your water heater as needed, and cleaning your heating system each year will cost you in maintenance fees. But it's a small fraction of the cost you'll pay if you let those things slide until they become emergencies.
  • Your marriage. Divorce isn't just painful, it's expensive. A divorce typically lowers each former spouse's net worth by 70%. (But it sure boosts the net worth of the lawyers!) Putting some resources into keeping things strong between you and your partner is a great investment, in financial terms as well as emotional. Set money aside for time together, for small thoughtful gifts to let your beloved know you're thinking of her. If you have kids, spring for a babysitter to create some much-needed time alone. If your marriage is in trouble, consider therapy. The therapist's fee may seem steep, but it's a fraction of the hourly rate a divorce attorney will charge, and the end result will likely be happier.
  • Your career. Typically, your career is your greatest source of money. But it also creates expenses. These range from having the right clothes for your office environment to taking graduate courses. There's an art to knowing which expenses will pay off. Do you really need $200 shoes to fit in at work? Is that new laptop an essential business expense or a neat toy? While it's easy to overspend on your career, especially if you're self-employed, work is an area where some investment up front can bring you huge returns over time. If a graduate degree will help you step into a higher paying position, or even switch careers entirely, it's probably worth the cost of tuition bills in the here and now.
  • Your happiness. You can't live entirely in the future. While you save for your long-term goals, be sure to put some energy into being happy in the present. That doesn't mean splurging on expensive whims to buy yourself a moment of happiness in a bleary day. Spending money you don't have won't make you happy. Debt is a major cause of stress and sadness in people's lives. But as you take control of your finances, be sure to also tend to the joy in your life. That's best done by fostering close relationships and engaging in activities you love. Unlike the other “life investments” I've talked about here, this one comes with a small price tag or none at all. A talk with a close friend, a trip to the library, or a free movie at your local university can all bring big doses of happiness for free.

Investing in these core areas pays off in a better quality of life and saves you money on emergencies. A healthier, happier life is also a cheaper one.

Budgeting for now and later
To get the long-term financial and personal gains of this approach, you'll need to do some careful budgeting. Make sure you leave room for “unexpected” expenses like home repairs and dental work. A review of your last few years' spending records should give you a pretty clear idea of what your family typically spends on these periodic maintenance items. By budgeting for them, you'll have the cash on hand when you need it.

You can also make your life easier by funding a three- to six-month emergency fund to tap into when life throws you a big curveball like a suddenly failed appliance You shouldn't rely on your emergency fund to cover your new running shoes or evening computer classes, though. Budget for these “life investments” and they'll fit more easily into your life.

As with any expense, it's important to make these choices with care. Yes, you're investing in your life. Keeping your health, your home, your marriage, and your career strong will bring you more happiness every day. But like any investment, take care not to overextend yourself. Sometimes last year's running shoe is just as good as this year's — and for half the price. Getting the most out of your money without shortchanging your quality of life is the truly frugal approach.

More about...Budgeting, Health & Fitness, Planning

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Kent @ The Financial Philosopher
Kent @ The Financial Philosopher
10 years ago

This is an important topic. Money goals are future-oriented; however we live in the present.

I believe it is important to find balance between funding the life you want now with funding the life you want in the future…

“What is important in life is life, and not the result of life.” ~ Johann Wolfgang Von Goethe

Passiivinen Sijoittaja
Passiivinen Sijoittaja
10 years ago

I completely agree with this post. I think this is essentially the difference between being frugal and being cheap. If you’re cheap, you always choose the cheapest option, but if you’re frugal, you choose the option that has the best value.

Especially concentrating on your health is important. Why save money now if you won’t be healthy enough to use it later?

Wayne Mates
Wayne Mates
10 years ago

Great article Sierra. One thing I would argue is your point on divorce. It may be expensive to divorce, but it can be disasterous to be in a bad marriage. It can ruin your self-confidence and mentally bring you down and cost you a life of happiness.

I would also add that there are some great self-help book that can give you a perspective on happiness and living a great life. Two that I have read and reviewed on my site are “The Idiot Factor” by Larry Winget and “Excuses Begone!!” by Dr. Wayne Dwyer.

Everyday Tips
Everyday Tips
10 years ago

I couldn’t agree more with this post. You gotta live, and to me, happiness is at the forefront of life. One thing I have found though is that the things that make our family happy are not very expensive. (bonfires at night, playing frisbee in the backyard, etc.)

I do think that investing in your health is the best investment you can make. Sometimes the time investment can be harder than the financial if you lead a busy life, but it is so very important.

Great post, as usual.

Christina Crowe
Christina Crowe
10 years ago

While preparing for the future is all well and good, investing money in events happening now is equally important. Your article outlines this point nicely.

After all, what’s the point of saving if you’re not fully living your life? I’d rather live happily now and not have savings in the bank than have a ton of savings but have to wait 20 years (or until I retire) to start truly living.

The happiest moments of your life shouldn’t be when you retire. By then, you’ve let yourself watch your life pass you by. There’s no joy in that.

Christina

Courtney
Courtney
10 years ago

Wayne – I think there are cases where your argument is true, but I also think there are plenty of cases where Sierra’s argument is true. For one, she’s making the case that people should invest time and effort in their marriages preemptively, not just when things start to get bad. But studies have shown that a good portion of couples who were considering divorce, and instead chose to attend counseling or some other form of therapy, were significantly happier with their spouse 5 years later (and, I might add, with their net worth still mostly intact).

MM
MM
10 years ago

“Do you really need $200 shoes to fit in at work?”

I have found generally people agree that more expensive shoes last longer, are better made, and therefore a better investment as they will last years.

MetaFilter has a great discussion about this very topic:

http://ask.metafilter.com/143740/Difference-between-100-mens-dress-shoes-and-500-mens-dress-shoes

HollyP
HollyP
10 years ago

I have to side with Wayne… not every divorce is a bad choice, there are some marriages not worth saving.

Getting divorced was probably the best thing that every happenned to me, financially and spiritually. And this is from a woman who is currently very happily married with two gorgeous children… getting divorced was better than either of those things. It changed the color of my life. No amount of counseling would have helped my first marriage.

Maureen Thomson
Maureen Thomson
10 years ago

Thank you for a poignant, thoughtful and (for me) very timely post. Every know and then, we need to be reminded to invest in what truly matters.

Kris
Kris
10 years ago

Money can come and go, but who you are and how you live your life will have lasting benefits, and pay off in many ways. My 2 oldest kids are now teenagers and I’m noticing that some of the things I used to want them to do but couldn’t get them to do, they now do entirely on their own – once I stopped nagging them and just set a good example.

Katy @ The Non-Consumer Advocate
Katy @ The Non-Consumer Advocate
10 years ago

Sierra and J.D., This is a great column. This summer has been very expensive for us, due to a number of different parenting related factors. (Expensive tutoring, soccer camps and hosting foreign exchange students.) That, plus I took a took a week off from work, which meant a next-to-nothing paycheck. However, the money spent was worth every penny. If all goes well, the extra money spent will ensure that my younger son is accepted into a fantastic public school program. Investing in education and enriching life’s experiences is exactly what money is for. And if we have to forgo eating… Read more »

Erin
Erin
10 years ago

Considering this is written by an parent I’m very surprised by what I would consider a missing catergory – “Your Child(ren)”. No I don’t mean kids having all those latest toys fads – I’m thinking investing in opportunities your student is passionate about, that may pay off in the long run in the form of college scholarships. For example, when I was in high school, I applied and was chosen to participate in summer intensive program at Mich Tech – 6 hours from home. So not only did we have to come up with program fees, my parents also had… Read more »

Money Reasons
Money Reasons
10 years ago

Great solid advice! Here’s how I stack up. Pay now, save later Your health – While I don’t eat that great, but we make sure our kids do! Your home – We live in a medium sized house (2,100 sq ft). But with 2 kids we wish we had a little more. Our house is affordable and paid off, so we are good here. Your marriage – We are both frugal and hardly ever have financial arguments. Your career – I’m frugal all around, so I don’t buy things to keep up with the Joneses at work 🙂 Your happiness… Read more »

Techbud
Techbud
10 years ago

This is a great topic and a nice outline, but ultimately these are personal choices. I may choose to take my family on a vacation, because for us it creates time together, lasting memories. Others will choose what works for them. The key here is to stay within your budget.

Moneymonk
Moneymonk
10 years ago

I can afford to travel anywhere in the world
I have the cash for that. However, I enjoy backyard get togethers with my family, and friends.
That is happiness to me !!

GBR Briana
GBR Briana
10 years ago

Sierra, this post was great. I think a lot of people focus so much on their finances, that they forget that they should invest time and energy into other aspects of their life. Marriage is definitely an investment of love and time. You should invest much of your time and patience if you want a prosperous career. Once you invest in all of these things, you’ll find that you’re also investing in your happiness 🙂 Great points!

Budgeting in the Fun Stuff
Budgeting in the Fun Stuff
10 years ago

As someone who just paid $2600 in dental work for my husband due to bad habits, I cannot agree more with spending on preventative health care. Some exercise and good habits will save tens of thousands in the long run!

Chett @5k5k.org
Chett @5k5k.org
10 years ago

Great job Sierra. Your writing voice reminds me a lot of J.D. Informative, not preachy, but thought provoking. Well done.

PDX
PDX
10 years ago

We have been thinking more about these things lately and they are definitely worthwhile investments especially your health and relationships.

I know this is a common mistake but I would like to make a correction.

Preventative is not a word.

The correct word is Preventive.

Thanks

myfinancialobjectives
myfinancialobjectives
10 years ago

Great points indeed. I’d like to point out that stores like ROSS, JCPenny, Burlington Coat Factory, and Marshall’s are all EXCELLENT places to get great works attire for MUCH cheaper. I ran into this problem when I first started my job out of college. I quickly learned of these places to shop once I had 4 suites and $2000 of debt…:?

MOR
MOR
10 years ago

PDX, the Merriam-Webster dictionary disagrees with you. “Preventative” is an acceptable variation/synonym of “preventive” and has been used since about 1666.

Jack Nimble
Jack Nimble
10 years ago

This is a savvy money blog with smart readers and I have a little add-on. My marriage has always been good to great. Marriage is way more work than I ever thought it would be. But, it is so worth it. As it relates to money, 5 years ago my wife and I went to a weekend marriage conference. It was one of the best things we ever did. The next month our business was out of sight. We were doing so well, my banker caught me in the bank one day and asked what was going on. I said,… Read more »

Jayn Steele
Jayn Steele
10 years ago

Great blog post, I really enjoyed reading this! While typically I look at the term “investment” as a financial commitment with the intent of producing some kind of profit, I agree that we need to put money into certain aspects of our life to ensure success and happiness in the long-term. Often when we are younger and in good health, we don’t think about things like buying life insurance or health insurance, or exercising as much as we should. But these are exactly the kinds of things you want to think about when you’re young and when you can really… Read more »

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