What Are Your Money Dials?

What Are Your Money Dials?

One of the keys to designing a great lifestyle is to align your spending with your values, or to practice conscious spending. But what does that mean, exactly? If you showed me your budget would I be able to tell if you’re a world traveler, a wine connoisseur, a golfer, a philanthropist, an outdoorsman, or a gastronome?

Too often our spending is misaligned because we prioritize the wrong categories. We say we want to travel, but then we buy too much house and finance two vehicles, which eats up all of our disposable income. We say we want more time to spend with family or to pursue leisure activities, and then we buy a house in the suburbs with a dreadful work commute and then refuse to pay for someone to help clean the house or cut the grass.

Related: Is outsourcing the key to happiness?

Everyone has an area that they love to spend money on – or would love to spend money on some day. Personal finance author Ramit Sethi calls these your Money Dials – because you can tune them up or down just like a dial.

Here are the 10 Money Dials that he identified as key areas that most people are excited to spend money on:

  1. Convenience
  2. Travel
  3. Health / fitness
  4. Experiences
  5. Freedom
  6. Relationships
  7. Generosity
  8. Luxury
  9. Social status
  10. Self-improvement

The litmus test is this – If you had $25,000 to spend on any of the above categories, the one that comes instinctively to you is likely your number one Money Dial.

My Number One Money Dial

My number one Money Dial is travel. It used to be in the “some day, maybe” category, but a few years ago my wife and I decided that we would spend more intentionally on travel, and that resulted in some epic trips to the west coast, to Maui, to Scotland and Ireland, and to Boston (to name a few). We now have our travel schedule filled up for 2022 with trips to Italy, the U.K., and France throughout the year. We are excited to travel and regularly talk about where we want to go next and what we want to do.

But even though travel is our top Money Dial that doesn’t mean we had cranked it up to a 10 out of 10. I still had a scarcity mindset when it came to our travel. I naively wanted to fund everything on travel points to save on cash. While our trips were enjoyable, we dealt with trade-offs like multi-layover flights and hotel stays on points instead of a spacious Airbnb in our desired neighbourhood.

For our flight to Edinburgh, we flew economy with a long layover in Chicago. Our seats from Chicago to Edinburgh were in the last row of the plane where we slept for about 25 minutes on an eight hour flight. Every time someone went to the bathroom they would grab our seats on the way by and the bathroom light would illuminate the back of the plane.

My mindset was about quantity, not quality. Minor inconveniences like this were fair trade-offs to conserve travel points and cash. After all, more trips is better than fewer trips, right?

Related: Exactly how I redeemed more than 1 million points for travel

That trip taught me a lot. First, we absolutely loved traveling and couldn’t wait to go back overseas. Second, it would be worth it to increase our travel spending and avoid these minor annoyances. I’m talking about direct flights, using points to upgrade to business class, splurging on a spacious and well appointed Airbnb, and spending on experiences in our destinations of choice.

The result: We increased our annual travel budget to $25,000. We got Aeroplan 35K status this year by spending $10k on the American Express Aeroplan Reserve credit card last year. This gives us priority check-in, boarding, and baggage handling – not to mention lounge access. We upgraded to business class for our trips to Europe this year. We booked a beautiful Airbnb right across from the Eiffel Tower. We bought tickets to see Wicked in London – an absolute dream for my wife and oldest daughter.

We’ve cranked up this Money Dial to a 10 out of 10.

My Low Priority Money Dial

Ramit has another saying that you should spend lavishly on things that bring you joy, and cut back mercilessly on things that don’t. For me, that’s spending on vehicles. I could not care any less about the car I drive. It gets me from point A to point B – that’s it. As I’ve transitioned to working from home full-time, we sold our second vehicle because we didn’t drive it for a year, and we drive so infrequently now that our 2013 Hyundai Sante Fe might easily last another 10 years. 

That’s fine by me. There was a period from late 2012 to 2016 where we didn’t contribute to our TFSAs because of that stupid car payment – $832/month. My spending didn’t match my values during that time.

I’d rather take that $10,000 per year and put it into our travel budget, and that’s exactly what we’ve done.

Combining Money Dials

Health and fitness is an area that is important to me and my wife but we don’t spend a lot of money on this category. We converted a spare room in our basement into a gym with a bike, treadmill, free weights, and a bench (equipment paid for long ago). During the pandemic we ditched our pricey gym memberships and now use the Peloton digital app for strength, cycling, yoga, and running programs. The cost is just $17 per month.

Home Gym

But we also love running and competing in races. We typically do these races locally, or in Calgary, but what if we combined our love for running and competing with our love for travel?

This year we’ve entered the Banff Marathon (okay, my wife entered the marathon and I chickened out and opted for the half-marathon). We’re going to stay at the Banff Springs Hotel and we’ve treated ourselves to the VIP race experience that includes access to the VIP lounge before and after the race, plus a post-race massage.

We have always talked about entering a half-marathon (for fun!) in Europe or in the U.K. What a great way to combine our favourite Money Dials.

For others, this could be a wine tour in Italy, or a golf trip to St. Andrews. As Ramit says, your rich life is yours.

Changing The Dials Over Time

We all go through different phases in our lives and so it’s only natural for our money dials to change over time. I’ve never been a fan of paying for convenience. If there was a delivery charge – I’d just go pick up the order. And, why pay someone to clean the house or cut the grass when you could just do it yourself in your spare time.

But, again, the pandemic has shifted our priorities. We don’t mind paying for grocery delivery because we value our free time in the evening and on the weekend. Sure, we could go out during the day, but I figure my time is worth about $250 an hour – why take an hour out of a busy work day to grocery shop when I can order everything online in about 5 minutes and pay between $5 and $10?

We subscribe to a grocery delivery service from Spud.ca that comes every Monday and supplement that with online orders from Save On Foods once a week. Worth every penny.

I mentioned how travel was a “some day, maybe” desire for us years ago. But we were still getting our finances in order back then and our kids were too young to enjoy a big trip. We prioritized filling up our RRSPs and TFSAs in those years. Now that we’re “coasting” with fully maxed out registered accounts (and no car payment), we have the cash flow available to turn up the dial on our travel spending and make the most out of those experiences.

Final Thoughts

Show me your budget and I’ll tell you your priorities. Do they align with your values? With what you absolutely love spending money on? What if you could turn that dial all the way up to a 10 – what would that look like? Tell me in the comments.

One final idea – if you could allow yourself to spend $500 on something extravagant, what would you buy? Maybe that small indulgence can help you think about your own Money Dials and how you want to design your lifestyle to maximize enjoyment.

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  1. Pam on March 23, 2022 at 4:17 pm

    Man this year I have really turned up a few of my money dials. I am spending more on fitness (home equipment and a personal trainer) and some personal wellness things. But travel is coming back for me soon. I agree about the car, mine is paid for and I have no intention of replacing it. I also pay for a cleaner as my time is more valuable than it would take to do it myself. Worth every penny.

    Now I just need to plan some vacation time. And now that you mention it, somewhere I can book a wine tour

    • Robb Engen on March 23, 2022 at 4:30 pm

      Pam, I love this! Thanks for sharing. I think for some, increasing spending or lifestyle will always be seen as sort of sinful. But I’m not suggesting mindlessly spending on consumerism crap from Target or Walmart. It’s okay to turn up the money dials on convenience, health & fitness, travel and experiences, etc. if it brings you joy and you can afford it.

  2. Heather Anderson on March 23, 2022 at 4:39 pm

    This was a fun read. I am not sure what dial a $25000 renovation to the cabin on the lake would fall under, but that is where it would go. We need a reliable vehicle for multi long distance travel, but within the next year we will be a 1 car family. As our family have grown up and have family’s of their own, the lake is a place to gather. You will LOVE Wicked.

    • Robb Engen on March 23, 2022 at 4:49 pm

      Thanks Heather – and congrats on your retirement!

      I’d say the cabin ticks a few boxes. Relationships (family), experiences, travel. A wonderful area to splurge on and continue building memories.

      Yes, we’re all excited to see Wicked!

  3. JimG on March 23, 2022 at 4:59 pm

    For me, spending on good health is priority. Without it, none of the rest matters.

    We do budget for annual house upgrades, vacations and charity; always making sure we never over-spend. Mind you my wife still can’t resist buying all that “stuff”. Thankfully most of that “stuff” originates from China (i.e. dollar stores, Walmart). It could be much, much worse 🙂 .

    • Robb Engen on March 23, 2022 at 8:54 pm

      Hi Jim, agreed that we can’t neglect our health or the rest doesn’t matter.

  4. Jerri on March 23, 2022 at 6:00 pm

    For me, freedom is a priority, so I tend not to spend so that I can plan to exit the corporate rat race sooner….. But maybe I should re-jig that a little…..

    How do you value your time at $250 hourly? In my mind that equates to a $500K annual income?

    I tend to think of time as $ after tax – so if I spend $50 for lawn mowing, I had to earn nearly $100 to spend that $50….

    Open to hearing how others mentally value their time!

    • Robb Engen on March 23, 2022 at 9:05 pm

      Hi Jerri, I’d consider what you’re doing as buying back your time for an earlier retirement.

      There should be a balance, though. I like the concept of consumption smoothing where we don’t have periods in our lives when we feel like we’re depriving ourselves, or periods where we have too much excess.

      I’ve seen plenty of retirement plans where people spend, say, $40k per year during their working lives and then have the ability to spend $80k or $90k in retirement. For one, it’s more difficult than you think to turn off years of frugal spending and suddenly turn on the spending and double your standard of living. Second, wouldn’t it make more sense to spend $60k per year all throughout your lifetime – where you can consciously spend that extra $20k/year on something that excites you?

      As for valuing my time, you’re assuming I work 40 hours a week for 50 weeks a year 😉

      That’s my rate when I’m working on financial plans, speaking with clients, and freelance writing. That takes up maybe 25-30 hours a week. We’re travelling for 9 weeks this year, and I’ll take 3 weeks off around Christmas / New Years.

      • JimG on March 24, 2022 at 7:08 am

        Robb, what you said….
        “I’ve seen plenty of retirement plans where people spend, say, $40k per year during their working lives and then have the ability to spend $80k or $90k in retirement. For one, it’s more difficult than you think to turn off years of frugal spending and suddenly turn on the spending and double your standard of living.”

        Unfortunately you are describing me – guilty. I’ve just retired and am fortunate to have a DB pension that now, would pretty much cover what I have budgeted for annually all these years. I also have saved plenty throughout my working career. However, there are two main concerns that I personally have preventing me from spending more:

        – Prolonged inflation. This would potentially destroy my DB pension over time since it is not indexed to inflation. I do have precious metal and commodity investments to (hopefully) somewhat counter this concern, and so far it is helping to a degree.

        – A potentially prolonged bear market. Many will dismiss this and tell me that stocks always rebound after a recession. However if anyone believes in the 70-80 year long economic cycle, their could be huge risks that lies ahead. Both Elliot Wave and Neil Howe’s book “The Fourth Turning” would support this concern.

        So I do have a good chunk invested in ETF’s and dividend-paying equities. I have a good chunk in cash. I have a good chunk in commodities / precious metals. Maybe I need a big chunk in canned food and beef jerky too 🙂 . I welcome anyone’s opinion on this whether you agree or disagree.

        • Robb Engen on March 24, 2022 at 11:26 am

          Hi Jim, it’s possible to increase your spending without going overboard. Maybe spending $80k per year could be potentially ruinous if we have persistently higher inflation and very poor investment returns. But spending $60k per year is a reasonable trade-off that allows you to design your ideal retirement lifestyle with a very good back stop for worst case scenarios.

          What I don’t think is prudent or enjoyable is spending the bare minimum, reading Zero Hedge conspiracy theories, and thinking about the gold buried in your backyard and the canned food in your bunker. We have to live our lives with reasonable expectations for the future.

  5. C. Hopwood on March 24, 2022 at 5:19 am

    Hmm. I guess I’m in the freedom camp, as I don’t think I’d spend the $25K. Honestly, though, I can’t really say that investing it is clearly pro-freedom, though, since we don’t really need the extra $25K in our investments.

    I like travel, but I really prefer slow travel (like living somewhere for a while). And despite my advancing age (45 and counting) I’m still very much a budget traveler, happy to travel hack.

    I also like health / fitness, but I don’t really spend much. Like Robb, we set up a home gym, and spent a modest amount on a spin bike (and got TRX for Christmas) but I just use Youtube videos, so there’s no subscription fee.

    I like “experiences”, but I tend to prefer those that are free (like hiking). I do like the live theater, but where we live (and with a young kid) that isn’t readily available. We go when we can, though, but it’s typically in the $30 a ticket range.

    Luxury and social status are complete non-starters for me. Convenience doesn’t rank particularly highly for me, either. At the same time, I’ve definitely come to a point where I don’t put up with something that causes daily annoyance just because it’s a bit cheaper. Again, though, I try to keep my hedonistic adaption level pretty low. And relationships (at least immediate family) are certainly important to me, and that’s part of why I work from home, but it doesn’t require a lot of spending.

    Finally, self-improvement is also pretty important to me. Perhaps it’s #1 on this list. And I certainly spend more than most on things like meditation courses and retreats, but even those aren’t particularly expensive. I probably spend about $400 per year on courses (including books) and maybe $1000 or $2000 on retreats (mostly from home, nowadays). Once I can do longer residential retreats, though, that number might go up a bit.

    This has been an interesting reflection. I’m not sure that I see myself in this sentence: “Everyone has an area that they love to spend money on – or would love to spend money on some day.” At the same time, I’m not sure that this is a good thing. I think, despite our decent investments, I still might have too much of a scarcity mindset. Thanks for encouraging us to think about this!

    • Robb Engen on March 24, 2022 at 11:38 am

      Thanks for sharing your thoughts and perspective. I was worried this article may come across as pushing some kind of YOLO or consumerism narrative, and that wasn’t the point. Maybe you can’t see yourself spending $25,000 in any one area because many of the things you value are free or inexpensive.

      I think that’s where the $500 test comes into play. If I gave you $500 and restricted you to spending only on yourself – not to charity, not a gift for a friend or family member, but something indulgent for you – what would it be? Maybe an awesome hiking backpack you saw on a Kickstarter campaign, or a new MasterClass course you’ve been dying to try.

      You mentioned self-improvement and going on meditation retreats. What would it look like if you went on a week-long yoga / meditation retreat in Bali? I mean, how magical does this look? https://www.cntraveller.com/spa/como-shambhala-estate-bali-spa-review

      Again, your rich life is yours and it doesn’t have to be terribly expensive. This exercise is about imagining what it would look like to take the thing that your most passionate about and turning up the dial to a 10.

      • C. Hopwood on March 24, 2022 at 11:47 am

        Thanks for your thoughtful response — to be clear, I really did appreciate you getting me to think about this stuff. I’m admittedly fairly anti-consumerism (which is fine) but I also do realize that I have some negative habits around money (namely being overly averse to spending it) that don’t contribute either to my happiness or to the happiness of those around me. Reflecting on which dial I could turn up (at least a little 🙂 ) is certainly worthwhile.

  6. Steve on March 24, 2022 at 8:25 am

    Often spouses can agree on “how to save” during their working life,
    but disagree drastically on how to “spend” during retirement. (opposite Money Dials)
    Can anyone relate or offer a suggestion?
    (you take this year, I’ll take next, doesn’t work)

    • Carol on March 24, 2022 at 10:06 am

      Steve, I have to disagree with your statement. I think your solution of “ you take this year, I’ll take next year” works well.

    • Robb Engen on March 25, 2022 at 10:24 am

      Hi Steve, you’re right that this can be challenging for couples to align their views on what their rich life should look like. For travel, I think taking turns planning the destination and activities can be effective for many. In the year when it’s not your turn, having a say in one day’s activities or planning a dinner gives you a stake in the planning and could be more enjoyable.

      I also think it’s important for spouses to have their own “no questions asked” pot of money for spending on their own interests and hobbies.

  7. Andy on March 24, 2022 at 9:34 am

    Similarly we ditched the gym and personal trainer for the peloton app and home equipment and saved a bundle. Oddly enough we’ll be in Paris and London this year too! It turns out travel, great food, and being present for important family & friend milestones are our big rocks.

    • Robb Engen on March 25, 2022 at 10:28 am

      Hi Andy, great minds…

      Enjoy your travels this year!

  8. Brenda on March 24, 2022 at 2:48 pm

    Thanks for introducing your readers to Remit Sethi’s podcast last year. I started from episode 1 and have been an avid listener ever since. It’s fascinating to hear how couples view money and I’m very glad my partner and I are already “rowing our boat in the same direction”.

    Freedom: This was and probably remains the single biggest money dial for me. Previously it manifested as a high savings rate in pursuit of FIRE. During the pandemic, I decided to pursue SlowFI/CoastFI instead. As a result, I reduced my working hours/gross income by 20% last year (which reduces my net income by 14% since a gross reduction is at the marginal rate). I want to continue to save less/spend more on other money dials so that I have a smooth consumption path and also a smooth work/life balance path.

    Relationships, Generosity: During the pandemic when travel was minimal, I made an effort to redirect some of those funds to relationships and generosity. While I do value relationships and generosity, they’re all too easy to forget about with a busy schedule. I need to try and keep them top of mind now that things are re-normalizing.

    Travel, Experiences, Luxury (mostly to boost the other money dials, e.g. nice hotels): These show up all over my calendar and budget. No doubts here, lol.

    • Robb Engen on March 25, 2022 at 10:32 am

      Hi Brenda, thanks for sharing. I agree, Ramit’s podcast is fascinating.

      I like how you switched focus to relationships / generosity – it’s so true how easy it is to forget about these things when we’re caught up in our own busy lives.

  9. Christina on March 24, 2022 at 8:57 pm

    Interesting article on money dials. I know for me I feel i’m constantly spending more on eating out than i’d like. But for me, its important as i’m single and that’s my social time. So i tell myself as long as i’m reaching my saving goals its ok. I know i’m also lucky as my grandma left me some money in her will and i’ve been using some of that for travel. So i can spend quite a bit of discretionary income on eating out. I still feel guilty though.

    • Robb Engen on March 25, 2022 at 10:48 am

      Hi Christina, I think it’s common to feel guilty or indulgent for spending money on certain areas of your life. The point of the Money Dials exercise is to help ensure your spending aligns with what’s important to you. It sounds like spending on dining out ticks a few boxes for you in terms of socialization and perhaps convenience. And, as you said, as long as you’re reaching your savings goals then you should feel good about spending your leftover cash flow on what makes you happy.

  10. Christine P. on March 24, 2022 at 9:03 pm

    Freedom/Security has always been the No.1 money dial for me based on my early childhood experiences. A mid-life divorce and retiring just before the global financial crisis didn’t help.
    However, I have come to admit to myself that I am going to be ok and that it is permissible to spend money on some luxuries. So, last fall when I flew to Europe to stay with my sister while she had serious surgery, I chose to fly business on a direct flight. I had flown business in the past on Aeroplan points, but that wasn’t an option this time and I also booked on pretty short notice – more than I ever spent on any trip, and that was just the flight. I used the pandemic and the risk of flying at my age as an explanation/excuse, but really, who am I kidding. I am going back to Europe this summer, business again, and I may never change back.
    Does that fall under convenience or experiences or luxury?
    I don’t spend money on cars, or alcohol, or many other things that people find important. Most of all, I have stopped feeling guilty and/or apologizing for my choices. That is the greatest money dial of all.

    • Robb Engen on March 25, 2022 at 10:51 am

      Hi Christine, thanks for sharing. I’ve heard that about business class – if you upgrade once you’ll never want to go back to economy 🙂

      I think that’s a good example of combining your money dials into convenience, luxury, and experience. No wonder it’s expensive to fly business class!

      You closed with a great example of the idea of spending lavishly on things you care about and cutting back mercilessly on things you don’t care about. I love it!

  11. Roger W on March 25, 2022 at 5:57 am

    Hi, great article. In it you say you “had” a scarcity mind set. Well, I still have one and would be interested to hear how you moved on from it.

    • Robb Engen on March 25, 2022 at 10:56 am

      Hi Roger, great question. My relationship with money is in a constant state of evolution. I didn’t grow up with much, and struggled with money in my 20s. As I earned more income and improved my financial situation, it was hard for me to escape my scarcity mindset and loosen the purse strings, so to speak.

      Listening to Ramit’s podcast (I Will Teach You To Be Rich) has honestly helped me understand my own situation better and give myself permission to spend a bit more in certain areas. I mean, he has an interview with a couple earning $500k a year and the husband is still driving around town to save money on blueberries.

      Also, through my financial planning work I see way too many situations where a retiree lived well below their means all throughout their life and now has the ability to double their spending but they just can’t bring themselves to do it (or they don’t even know how to start). That’s where the idea of consumption smoothing comes into play – where you can start inflating your lifestyle, even a little bit, to teach yourself to spend on things that truly matter to you.

      I’d rather spend $60k all throughout my lifetime (increasing with inflation each year), instead of spending $40k during my working years and have the ability to spend $80k but not know how.

  12. Richard on March 30, 2022 at 1:35 pm

    Entertaining article. Like seeing where folks spend their cash! My favourite part of “financial facelift” in the weekend globe & mail! Thanks for read!

  13. Barb Day on June 28, 2022 at 2:49 pm

    I read all comments with great interest. I need to look up Remit Sethi podcasts. I have a scareity mindset. It’s much easier now that I’m retired to pat myself on the back for staying on budget in spite of increasing costs and financial holding plans failing to achieve goals. How can I travel and spend money if my financial plan of 5% is not working. I haven’t travelled for the 2 years of pandemic so I should have money to travel but… I need a “cash cushion” now because look what has happened to the portfolio.

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