Robin Powell
Carl Richards – Money expert 

RP: Something that a financial planner can do for you is to help you develop a sensible approach to spending. Some clients spend too much; others, perhaps out of fear or guilt, really don’t spend enough.

Carl Richards is a former adviser and an expert on spending habits. His advice is to prioritise spending on time spent with loved ones.

CR: To me, the best examples I can point to of stuff that we’ve spent a lot of money on that, at the time, I remember – and still to this day, even the next time we do this – I’ll still feel the same way, because it’s hardwired, are experiences with our kids and our family. And even personally: one example would be a trip that we just went on, to the States and we went to Grand Teton National Park, and we rented a boat, and we spent five days waterskiing; and when I look at the aftermath – when I start adding up the receipts on the credit card bill to get ready to pay the credit card back off – I’m like, “Oh my gosh! We spent so much money!” But I already know that we’ll look around at each other and go, “Would we do it any different?” There’s no way.

RP: There is, in fact, evidence to show that spending on experiences — holidays, for example — makes us happier than spending money on stuff. But Carl says you shouldn’t feel guilty about buying physical items, especially those that will really last. One of his most successful purchases was a rather expensive outdoor jacket.

CP: It’s ten years old now, and it’s both stuff and experiences. There’s patina – emotional patina – now, because this thing has been around long enough. I mean, even if I look around the house at pictures on the wall, I can see this jacket. I can see this jacket in New Zealand, I can see this jacket in the Alps, I can see this jacket in the Osage mountains of Utah, I can see who was with. I love the old saying: “buy nice, or buy twice”. I make the argument that this was less expensive than at least three of the jackets I would have already worn through.

RP: Of course, if you can’t afford something, you shouldn’t buy it. If you can afford it, this is what Carl suggests you do.

CP: There’s a couple of things you have to go through. Number one: I love letting those things simmer just a little bit, to make sure; because we all know how often we’ve been, “I’ve got to have that thing!” So one example would be books. On Amazon, I keep a wish list that I’ve named “the 72 hour bin”. Any book I buy has to go into the 72 hour bin, and it’s amazing how many things have gone into the 72 hour bin that have never come back out. Because I had to have it, and then 72 hours later, it’s faded. So, simmer – let those things simmer. Number two: if you can afford it after it’s simmered, and you’re sure, go do it! I’m giving you permission. If you need permission, Carl grants you permission with my little permission granting stick. Go do it!

RP: In summary then, prioritise spending on loved ones and experiences. But whatever it is, don’t feel guilty buying something you think you’ll really love.. as long as you can afford it.