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Money is a utility that, in its best form, is meant to improve our lives.
As such, there are a few times where a product, service, or experience is worth the additional cost (as long as you're not slipping into credit-card debt because of it).
For example, you're better off spending money on a life insurance policy to protect your family than not having one at all; paying a professional for help with your money if you're paralyzed by indecision; and yes, buying the latte if it's something you enjoy and it doesn't distract from your other goals.
Here are seven times you're better off spending than saving:
Your health is priceless. Whether it's opting for a more expensive health insurance plan at work because the coverage is better, ponying up for an Equinox membership, or picking organic produce at the grocery store, you shouldn't feel guilty about spending money when your mental and physical health is on the line.
2. To protect your family with insurance
If anyone relies on you for financial support, life insurance and disability insurance are a must-have. In exchange for paying a monthly premium, a disability insurance policy will provide an income stream if can no longer work due to an injury or illness and a life insurance policy will pay out a lump sum if you pass away.
The average cost of a 20-year term life policy for a healthy 35-year old male runs from about $20 a month for $250,000 of coverage to $100 a month for $2 million of coverage, according to Policygenius. Long-term disability insurance premiums run anywhere from 1% to 3% of your salary.
Ask anyone with life or disability insurance and they'll tell you: It's a small price to pay for peace of mind and financial security.
3. To buy things that bring you joy or save you time
As long as you're cutting back on the things you don't care about, it's OK to spend money on the experiences, services, and products that bring you joy or make your life easier. If a daily latte, regular facials, a housekeeper, or first-class plane tickets enhance your life without distracting from your financial goals, spend away.
Being good with money is the ultimate balancing act between needs and wants. Depriving yourself isn't sustainable and rarely leads to success.
4. To buy what you've been saving for
If you've been deliberately saving for a down payment on a home, a big summer vacation, or a new car, it's likely taken months or even years of discipline to get there. It may feel difficult to part ways with that savings, but money is best paired with intention.
5. To get professional help with your money
If you're paralyzed by indecision or laziness when it comes to your money, it pays to hire help.
Research shows that people who work with financial advisers are more likely to report happiness, confidence, and stability in their financial and personal lives. A good financial planner can help you identify your most important goals and make a plan to achieve them.
You may also find that hiring a CPA to do your taxes is worth the cost. It's a relatively small fee that can ultimately save you time, money, and a headache.
If you travel frequently, spring for the better luggage. If you're prone to bad skin and a pricier product works, buy it. If you sleep better on a memory foam mattress, don't settle for anything else.
7. To grow your money in the stock market
Your emergency fund and any savings you're planning to spend in the next few months to a year should be kept in cash. Any leftover money is best "spent" on investments.
Too many people are paralyzed by the fear of losing money that they avoid investing all together, but the stock market is one of the most powerful tools we have for building wealth. Returns are never guaranteed, but if you're sitting on the sidelines you not only avoid the bad days, but you miss the best days, too.
