Saving and Spending

How Selective Spending Increases Your Net Worth

I know a couple with two children who can’t seem to stop buying their kids more toys. Their entire house—not the just the children’s bedrooms—is full of them. If I had to count, I would say that their kids have hundreds of them; it’s like visiting a toy store. Yet this couple sometimes has trouble paying their bills. I’m completely baffled. Hasn’t it occurred to them that one thing they could do to help their finances is to stop buying more stuff for their kids? On top of the money spent, they’re house is always a mess. Walking through is like tiptoeing through a mine field: One wrong step and you could end up with some serious injury!


This phenomena of too much “stuff” isn’t restricted to just this family or even parents spoiling their kids. It’s pervasive in American society, as well as some other Western Cultures—although the Europeans seem to be more frugal, as I discuss in my article What the Europeans Taught Me About Being Frugal. But when it comes to spending, Americans take the gold.

Just go to any thrift store, garage sale or junk yard to get an idea of how pervasive the urge to buy is in our society. And I get it. We have some of the best shopping in the world at our fingertips. We also have businesses who know the tricks of how to hit you where it hurts (your wallet). It’s why stores line up their items nicely, big corporations put a lot of time and money into coming up with just the right packaging and why cars are washed and polished until they’re as shiny as an apple at the car dealership.

Garage full of stuff: bikes, lawn mower, crates and more.
Does your garage look like this?

Some of you may know of someone who has a garage that is so full of stuff, they can’t pull a car into it. (Or perhaps that’s you?) Or closets bulging at the seems. Maybe you have a work space that’s overflowing of rubber bands, paper clips and pens. (I’m guilty of this and admit to recently buying a pack of 30 colorful pens from Costco, even though I had plenty of perfectly good pens at home.) Your desire to spend could show up in other ways: Tons of utensils and small appliances in the kitchen; eating out all of the time; constantly going on vacation.

The problem can often arise in the spur of the moment. If you have $100 in your wallet and you come across an item that costs $15, then it’s easy to think, why not? And that piece of plastic in your wallet? That’s a mind trick, too. If it’s a thin piece of plastic and not printed paper deemed by the government as legal tender, then it becomes even easier—psychologically speaking—to make a purchase because our brains still don’t quite see it as money. Plus, we’re not paying for it today—we get to pay for it later.

All of this is a recipe for overspending, which can lead to bigger problems like feeling overwhelmed, stress, and even broken marriages.

But if you change your mindset, you can often change the problem.


The remedy for our addiction to buy is something I call “selective spending.” Selective spending is similar to mindful spending, which became a buzz phrase several years ago. With mindful spending, the notion is that you think things through a bit before you buy. Selective spending takes it a step further and reminds you to be picky—even finicky—about what you spend you’re money on.

One way to do this is to choose fewer but better-quality items for certain things. Buying cheap furniture, for example, can make your place look low-class and is likely to break down quickly. You could opt instead to look for better-quality furniture but find it at discounted furniture stores or even at a garage sale or on craigslist. That also means you could choose to have less of it. My living room, for example, doesn’t have any chairs—just a loveseat. I opted to skip buying chairs because I never entertain at my place so what would be the point? They would never get used. But lots of other people would have gone out and bought a couple of chairs without really thinking about it.

We certainly need to apply this mindset to one of our biggest lifetime expenses: our residence. Too many people buy too much house. You can end up with rooms you never use—and feel obliged to buy more stuff so that those extra rooms don’t feel so empty. Plus there’s the added cost of having to heat and cool all that extra space. I encourage you to downsize if possible and get rid of all that extra stuff in your garage and closets that you don’t really need or even like. (So many people could downsize if they just got rid of that extra “stuff.”)

This doesn’t mean you have to live like a miser. No one wants to be around a person who never wants to spend money on anything or who is always complaining about how much things cost. That’s no fun—and I’m big proponent of fun. But with the money game, we have to remember that just about everyone is trying to take it from us. We have to realize that just because someone is offering something that might be “nice to have” or make our lives just a tiny bit easier, doesn’t mean we should buy it. We always have the option to say no and saying no more than yes will help you get the financial freedom you’re looking for.


There are plenty of times when I go into a store and want to buy something—and sometimes I do actually pull out my wallet. But then I remember all of the garbage bags I’ve filled up over the years with stuff to take to the thrift store and usually that’s enough for me to just admire the item and then move on.

Warren Buffet quote: Do no save what is left after spending, but spend what is left after saving.

It’s not that I’m against ever buying anything. Of course, we need some of the items—toiletries, food, clothes, a roof over heads and safe, reliable means of transportation. I also think it’s safe to say that we also each need a cell phone and a laptop or tablet these days, too. Heating and cooling units, bedding, major appliances also make our lives more comfortable. Other times like décor can make a house feel like a home. And it’s certainly nice to have a variety to choose from when it comes to food and clothing.

All of these things make our lives better, easier, more interesting. But how many of you are buying these items in excess—twenty candles, fifty pairs of shoes, six watches…? How many of you are buying things that you want in the moment but then it ends up being ignored and collecting dust a month later?

Selective spending, which helps you to have a pretty thick filter about what items you let into your life, will help you curb the urge to spend. I say don’t work for that item; make that item work for you. Anything you buy over a few dollars should reflect your tastes, bring some type of value into your life and be a fair or great price.

There are people, though, who seem to have their money values out of whack. I once knew this guy who had a house that was in major disrepair. Yet he spent tons of money on movie memorabilia, travel and tech items. I was amazed that it hadn’t occurred to him to cut back on his spending in these areas and upgrade his house!

So when I say selective spending, I do think we need a balance: If all you’re doing is spending money on your house and don’t have anything left over for fun or hobbies, that’s a problem. But likewise, if all you’re doing is spending money on fun stuff and you’re not maintaining your residence, vehicle or even your health then that’s a problem, too.


Selective spending can be life-changing in multiple ways. If you’re married and you’ve been arguing with your souse about money, it can improve and even save it because the you won’t be arguing about money so much (because you’ll have more). It streamlines your life (less stuff means less to manage) and will end up saving you thousands, or even more, over your lifetime.

It is also an essential tool for building wealth. By practicing selective spending, you end up saving more. In their bestselling book The Millionaire Next Door, authors Thomas Stanley and William Danko explain how proactively saving money has helped everyday people become millionaires: “If you make a good income each year and spend it all, you are not getting wealthier. You are just living high. Wealth is what you accumulate, not what you spend.”

On top of that, if you take what you save and invest it into something like dividend stocks, your net worth can explode over time.

I say this often in my blog posts: You can’t buy everything, no matter how much money you have. You must choose. But choosing is the beauty of it all. You choose to live in the city or town you live. If you have a partner, you chose them. If you have pet, you chose that pet. Life is about choices and I’m asking you to be selective in you’re spending, too. The reward is that you’ll have more money and a greater net worth, less clutter, fewer worries and a life that is filled with more joy and happy times:)

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