The psychology of spending money

Spending decisions impact everyone on a day-to-day basis more than investing decisions. What we spend money on often reflects our life experiences and psychological wounds. Money can buy happiness indirectly, such as by facilitating quality time with loved ones. Unspent money buys intangible but valuable things like freedom and control over time. There is a struggle to spend money on things that could bring happiness due to the ingrained identity of being a saver. Material possessions can be sought to fill a void in life, to gain respect, or compensate for unfulfilled areas. Desire for things that are just out of reach can magnify their significance, but the fulfillment may not bring the expected changes. Aspirations trickle down from higher income groups to lower income groups, and wealth is relative to what others have. There is a distinction between nice stuff that provides tangible utility and fancy stuff that offers social utility. Knowing what to want is challenging, especially when money is not a constraint.