One of many personal finance commandments I hear is “spend as little money as possible”. On the surface, this is a good rule to live by. After all, the less money you spend, the more money you have to save or invest.
But there are certain situations when, financially, it makes sense to spend money even when you weren’t planning to do so.
For example, I recently received a letter from ING Direct notifying me of a promotion they have going on. The letter told me that if I opened an Electric Orange checking account with them, and made 3 signature based transactions (those that do not involve entering my PIN) within 45 days, then my account would be credited $50 dollars.
At first glance, it might seem counter-intutitive to make three purchases just to make 50 bucks.
But if you look a little closer, you’ll notice that there’s no minimum purchase amount. So, my plan is to go to Walmart or Meijer and buy three packs of gum or possibly something even cheaper. My local Meijer even has self-checkout lanes, so I won’t have to look like an idiot by going through a lane three separate times.
$50 bucks for spending a few dollars sure seems like a win to me.
But the concept of spending money to make money doesn’t stop with promotional offers from banks.
Let’s say you purchase a book about personal finance. You implement a few of the ideas after reading it. Those ideas could easily save you hundreds, if not thousands of dollars.
Or maybe you decide to spend a reasonable amount of money going to college. You might be spending thousands of dollars, but the degree is worth the cost because it allows you to get a job that can pay more. Or at a least a job with better benefits and working conditions.
Lastly, you could decide to purchase a more expensive, but also more reliable and fuel efficient car instead of a cheap and low quality vehicle. You might be paying more upfront for the nicer car, but you’ll save money over the long run by spending more cash to begin with.
The take home point is that spending money can be a viable way to actually boost your income or increase your savings. Many things in life cost money, but they can also improve your bottom line.
