Top 5 Best and Worst Ways to Spend Your Money

As I’m sure you know all too well, there are countless ways for you to spend your money. You could invest in the stock market and hope that your money grows into, well, more money. You could donate to charity and help your fellow man. Or you could just blow it on something stupid, like gambling in the casino. The irony is that sometimes the best ways to spend your money are also the worst.

I previously described the 10 best ways to spend a dollar, but what if you have more than 100 cents to spend on something? Let’s have a look at the top 5 best (and worst) ways to spend your money. Yes, they’re the best and the worst at the same time.

Cars and Car Modification
Some people are perfectly satisfied with a vehicle that can get them from point A to point B in a reliable fashion, but why is it that these same people are known to swoon over features like air conditioning and an MP3-playing car stereo? Auto enthusiasts will remind you that there is no better feeling that ripping down a race track in a Ferrari F430 or some other supercar. It’s a thrill and it’s enjoyable.

At the same time, cars can be the worst way to spend your money. Nearly all cars significantly depreciate in value the moment they leave the dealership. An even worse investment are some of those car modifications that people like to do — exhaust systems, engine swaps, body kits, and so on — because these lose their monetary value almost immediately. And let’s not forget about gas prices. Even so, you can’t deny the pleasure derived from having (and driving) a hot ride.

Decadent Food and Drink
Might I interest you in a $60 burger? Or how about some duck confit and Larry Albright trout? They say that the way to a man’s heart is through his stomach and let me tell you, I love to eat. There isn’t much that makes me happier than a nice dinner.

At the same time, isn’t it a little hard justifying the cost of a $60 hamburger when you know that money could be spent much more wisely elsewhere? That money could be used to invest in the future, help the less fortunate, or pay for something a little more necessary. Fine dining is an exercise in excess, but it’s one that I simply must indulge in.

Consumer Electronics and Gadgets
I don’t recall the exact figures, but consumer spending on electronics, gizmos, and other gadgetry is very much on the rise. People are spending more money on their iPods, high-definition televisions, cell phones, and other personal electronics than ever before. I guess I should be thankful that I review technology for a living, because I get to enjoy new tech toys without paying for them.

While considerable enjoyment is derived from having the latest cell phone, this enjoyment quickly diminishes when said cell phone becomes obsolete in 2 months. Piling up with electronics is a considerable waste of money and it can’t possibly be good for our landfills. But you just can’t help but to want a new camera, new stereo, or new computer accessory, can you?

Travel and Holidays
What are you doing when you go on vacation? You’re spending money left, right, and center! When you start to think about the flight, the hotel, the dining out, the excursions, the transportation, and all the other costs associated with taking a holiday, the Vegas trip starts to sound pretty expensive. And that’s before the gambling and the loss in wages! (Don’t forget about opportunity cost.) In the end, you typically have nothing physical to show for your spending other than some random tourist-themed trinkets.

Ah, but the memories are invaluable! If it wasn’t for worldly travel, I wouldn’t have eaten life-extending black eggs or survived the Great Wall of China. It is important to experience cultures other than your own, if only to truly realize that not everyone speaks English.

Designer Clothing and Shoes
For the life of me, I cannot justify buying a $100 t-shirt. Yes, there is a distinct difference between a finely-tailored Italian suit and one that you get off the bargain rack at the thrift store, but for everyday clothing, it’s largely unnecessary. The cheapest clothing will be of poorer quality, but you can’t tell me that your $200 pair of jeans is five times better than my $40 pair.

When I was younger, I loved getting new shoes. These days, while I still enjoy getting new shoes, I’m more about scoring a deal on last year’s style at the outlet mall. Maybe that’s just me. In any case, it’s fine to indulge in a luxury item now and then, but some people really stretch their budgets just so that they can buy a Gucci purse. Talk about status-obsessed!

Where Do YOU Spend Your Money?
I’d love to hear about your vices and how you decide to spend your money. Are you terribly frugal or are you an absolute spendrift?