COLUMN - I listened to a podcast with Morgan Housel, author of The Psychology of Money and his new book, The Art of Spending. 

It was interesting because almost everything in financial planning focuses on saving and growing wealth. Very little focuses on spending it. 

Yet the whole point of saving is to eventually spend.

Here are 4 ideas from the podcast on his new book that stayed with me –

Housel defines financial success not as a number, but as independence. The freedom to wake up and choose how you spend your time, who you spend it with, and what you work on. He points out that there are billionaires with no control over their schedule, and people on modest incomes living exactly as they want. 

The number in the bank does not always tell the real story.

The right question is not only how much you are accumulating, but what that accumulation is actually buying you in terms of freedom.

"Wealth without independence is a unique form of poverty."

2. Saving without knowing why creates its own problem

Housel describes clients who have saved more than enough for a comfortable retirement but cannot bring themselves to spend anything. The number going up every year has become their identity. When the time comes to actually use the money, they freeze.

The antidote is knowing in advance what the money is for. Not vaguely, but specifically. What does your retirement actually look like? What experiences matter to you? What do you want to give your family, and when? A financial plan without those answers is only half a plan.

3. Spending to impress strangers is the fastest way to have less money

Most people you are trying to impress are not paying attention. They are too busy thinking about themselves. And the ones who do notice are probably not admiring you — they are thinking about how they compare.

Housel's point is direct: the most valuable financial asset you can have is not needing the approval of strangers. Use money to build a better life for a small number of people you actually care about. 

Everything beyond that tends to be expensive and largely invisible.

4. Happiness is fleeting. Contentment is the goal

Happiness comes from surprise and novelty. It fades quickly, and chasing it through spending — the next holiday, the next upgrade — will always disappoint. Contentment is different. It is steady and does not depend on what comes next.

Housel's formula: independence plus purpose. The freedom to be who you are, and something meaningful to work towards. Money supports both. But it cannot replace either.

"Money serves you best when it stops being the thing you think about."

Matthew Matthee has a wealth management business that specialises in retirement planning and investments. He writes about financial markets, investments, and investor psychology. He holds a Masters Degree in Economics from Stellenbosch University and a Post Graduate Diploma in Financial Planning from UFS. [email protected]    

Read more Columns here.

‘We bring you the latest Garden Route, Hessequa, Karoo news’