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I used to be guilty of spending money on the life I thought I lived, rather than the life I was actually living. To illustrate what I mean, consider the following past expenditures:

● Snowboarding apparel for my first -- and only -- snowboarding trip.

● Evening dresses from Bluefly. Yes, they were purchased at a big discount, but I had nowhere to wear them.

● A mountain bike. I was so dedicated to riding, for about three months.

I recently read a Psychology Today blog post titled "What you do every day matters more than what you do once in a while." Written by Gretchen Rubin, author of "The Happiness Project," the main point of the post is that people are happiest when they make decisions based on their daily life, not the life they lead every once in a while. Says Rubin:

"In his fascinating book, 'House Lust,' Daniel McGinn notes that market researchers use the term 'maximum-use imperative' to describe the fact that people will often buy something to accommodate a use that they need only rarely. . . . Along the same lines, I've noticed that when making decisions, I tend to give too much thought to what I do once in a while and not enough weight to what I do every day. For example, I wear running shoes 29 days out of 30 days a month, yet I have three pairs of black flats and only one pair of running shoes."

Maximum-use imperative doesn't affect just happiness, though. It also affects your bottom line.

Buying for someone else's life

It struck me that spending money on the things I do once in a while was a large part of why I wasn't saving money, or at least spending on the things that really mattered. And that led to a lot of unhappiness.

As I mentioned earlier, I used to buy clothing for someone else's lifestyle. I had clothes for snowboarding, cocktail parties and mountain biking. I had several winter coats and countless pairs of gloves -- and I live in Texas. Who knows how much I've spent over the years, buying new apparel every time a new hobby interested me or picking up a little black dress without so much as one event on my calendar? And the purchases weren't just wasting money; they were also chipping away at my happiness. I had a closet full of clothes and nothing to actually wear. I also had to look at the results of my spending habits every morning when I got dressed, which only made me feel worse.

Then one day I'd had enough. I started cleaning out my closet and pared it down so much that my husband and I now use the same small closet -- a huge accomplishment, if you knew me 10 years ago! (You can read more on my process and how I've maintained a streamlined wardrobe in a previous post on Get Rich Slowly.) I'm not perfect, but I now ask myself if I'll really wear something before I buy it, and I walk away more often than not, which feels surprisingly good.

House rich, lifestyle poor

Another example of maximum-use imperative is buying too much house so the owner can host the entire family over the holidays. This isn't farfetched; I know more than one person who has done it. It's a lovely sentiment to want your entire family under one roof, and it's a gracious thing to offer to host them. But if you're a family of three and you buy enough house to accommodate 15 or more people, that's a huge expense you'll pay all year to make use of for just a few days during the holiday season. The mortgage payments will be higher, not to mention taxes, interest, insurance and utilities, as well as the time and money spent cleaning and maintaining a larger house.

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Buying a smaller house could give you more options, including:

  • Moving somewhere more desirable (paying for location instead of square footage).
  • Paying off the mortgage faster.
  • Buying a smaller house and using the extra money to travel.
  • Saving the money for long-term goals like retirement.

On a day-to-day basis, one of those options will probably make you much happier. Then, during those few days of the year when family is in town, you can find a way to make things work. Better to structure your life and your spending around the other 51 weeks of the year.

Invest in your real life

I just returned from a trip to Italy and Spain, and I was tempted more than once by a great sweater or scarf I saw in a shop window. One of my travel companions said, "You're here, just get it so you won't think about it later." I thought about this advice for a second, then I remembered that I have more than enough sweaters and scarves and decided I'd rather spend the money on tickets to a museum or a round of churros and chocolate. Or maybe just put it toward the next trip.

As Rubin writes, "we're happiest when our decisions most closely match our natures and our values," and that's definitely applicable to spending decisions. Instead of spending money on the things you use once in a while, ask yourself how often you'll need something before you buy it. Then invest in your day-to-day life, not your fantasy life.

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