The most valuable thing I learned about money after my first full year working

Looking out mountainKathleen Elkins/Business InsiderA view from Crowders Mountain in my home state, North Carolina.

My frugality runs deep.

It started early on: I was a kindergartner who really wanted chocolate milk at the local diner when my dad first gave me the is that a want or a need? talk.

What started as a basic personal finance lesson — buy needs, not wants — evolved into a rather utilitarian budgeting philosophy: Don’t spend money, take advantage of freebies, and record expenses versus income in a spreadsheet.

For too many months to count after graduating college the spring before last, I didn’t purchase much else than instant oats, toothpaste, and Trader Joe’s “2-Buck Chuck.”

My frugal system proved to be a well-oiled, functioning machine — I haven’t been evicted in Manhattan, seem to be nourished well enough, and manage to set aside a generous portion of my income each month. And while I’m not one to fix what isn’t broken, I learned this year that room for improvement exists even in the most reliable of machines.

What I learned after one full year of working in New York City is that it’s OK to spend money.

Being money conscious is a good quality to have, but extreme frugality can be limiting and can cause you to do impractical things, such as schlepping miles across the city to avoid the $2.75 metro fare (my M.O.) or buying cheap to save in the moment, when paying more upfront would have saved tremendously in the long term.

Perhaps worst of all, my frugality prevented me from saying “yes!” to social events or activities with a price tag on them — it didn’t allow me to do, experience, and live in this electric city I’m lucky enough to now call home.

After months of meticulously tallying daily expenses and playing the can-you-spend-less-money-this-month-than-the-last game, I figured out that it is OK to spend on good things, meaning experiences that will make you happy or things that will pay off in the long run. I like to call this quality spending.

For me, this means signing up for $70 half marathons, paying a gym membership, and trading in my low-cost oats for the occasional Sunday brunch with friends.

Camel kathleenKathleen Elkins/Business InsiderSpend on experiences. Here’s the author making memories in Morocco.

While my expense column has expanded significantly, I don’t spend aimlessly — this newfound freedom to spend my own money does not mean I’m commuting to work via taxi or dining at Michelin restaurants — and that’s the trick.

I spend without guilt on the two most important things to me right now — my health and my relationships — and live frugally in all other aspects of my life. This still puts me at (or under) budget and allows for a healthy dose of life.

Quality spending still makes me cringe on occasion, but I am becoming more and more comfortable with my amended budgeting philosophy: take advantage of freebies, record expenses versus income in a spreadsheet, recognise the difference between needs and wants, and spend money on good things.

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