#67 The art of spending money
What ancient philosophy and modern science teach about spending money
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We spend years learning how to make money. How to earn it, invest it, multiply it.
Almost no one teaches us how to spend it well.
I recently joined the “Educa tu dinero” podcast to talk about this and other lessons on money. The episode sparked more conversations than I expected. It made one thing clear: we obsess over accumulation, but we rarely question how we actually use what we accumulate. (listen to the episode in spanish here)
So we thought it was worth putting those ideas into writing.
Part I: Why we spend the way we do
Most of our spending decisions are not independent. As we wrote in “Why You Want What You Want”, desire is mimetic. We learn what to want by watching others. We upgrade because our reference group upgrades.
That would be fine if imitation made us happier. Often it just makes us restless.
We optimize for the wrong scoreboard. Not for a better life, but for status.
There are two useful lenses to look through:
The internal one asks: does this improve my time, my relationships, my peace?
The external one asks: how does this look? What does this signal?
Take a big house. It can improve your life if it creates space to host friends and family. That is real return.
But if the goal is admiration, the return on investment is terrible. People notice for a moment, then move on. Nobody thinks about your house nearly as much as you think they do.
Luxury feels like progress. Then it becomes normal. Then it becomes insufficient.
Baseline shifts. Desire resets. So we have to upgrade again.
Part II: What Ancient Wisdom Teaches
Across centuries and cultures, thinkers arrived at similar conclusions.
Stoicism: wealth as tool, not identity
Epictetus wrote that wealth is the slave of a wise man and the master of a fool. Seneca argued that wealth is not measured by abundance, but by having enough. Marcus Aurelius lived simply despite ruling an empire.
For the stoics, possessions and status are indifferent. Useful, but not sources of peace. True wealth is internal.
A key practice was negative visualization. Imagining loss not to induce fear, but to restore gratitude. It is an ancient antidote to adaptation.
Buddhism: attachment is the problem
Buddhism teaches that suffering comes from clinging, not from the objects themselves. Having money is not the issue. Making your peace dependent on it is.
Generosity is foundational. Neuroscience confirms that giving activates brain regions associated with pleasure and connection. Thich Nhat Hanh said that even the intention to give reduces suffering for both giver and receiver.
Confucianism: relational spending
Confucian thought frames money relationally. Wealth is justified when it deepens family, community, and virtue, not when it defines you.
Live within your means. Earn righteously. Spend in service of connection.
Across these traditions, the message is consistent. Money is useful, but it is not the point.
Part III: A practical framework for spending well
Modern research and ancient wisdom converge on a simple framework for spending in ways that actually improve life.
1. Buy experiences, not things
Experiences provide more lasting happiness than material goods. They resist comparison and become part of your story. They shape identity and create memory dividends that compound over time.
Memory compounds. Objects depreciate and end up owning you.
2. Buy time and freedom
Time scarcity is one of the strongest predictors of stress. Spending money to free up time consistently improves well being. Time is the one asset you cannot replenish.
Saving is another way to buy freedom. Unspent money is not just future consumption. It is optionality. It is the ability to say no. To leave a job that drains you. To take a sabbatical. To start something new. To protect your attention from being hijacked by urgency.
In that sense, savings are stored autonomy.
3. Invest in health and hobbies
Money spent on your body and your craft rarely disappoints. Sports. Strength training. Good food. A hobby that absorbs you.
If that hobby is done with friends and in nature, even better.
These purchases generate energy, not status. They improve your days, strengthen your resilience, and quietly compound over time.
Better health increases freedom. A meaningful hobby deepens identity.
That is a high return investment.
4. Spend on others
People are consistently happier when they spend money on others rather than themselves. The amount matters less than the act. Generosity strengthens relationships and reinforces meaning.
5. Use anticipation and scarcity
Pay now and consume later. Anticipation extends pleasure. Rarity preserves joy. The occasional treat often delivers more happiness than the daily indulgence.
6. Ask better questions
Instead of asking, can I afford this? ask:
does this reduce future regret?
does it deepen connection?
does it buy time or calm?
am I buying authenticity or applause?
These are not budgeting questions. They are values questions.
Conclusion: The real ROI
Across philosophy and science, the pattern is clear. Money improves life when it buys what actually matters.
It fails when it buys status, comparison, or identity.
The art of spending is the art of knowing yourself.
Not your image.
Not your scoreboard.
Your life.
And spending in ways that serve it.
Thanks for reading 3x!
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