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Are you “doom spending” out of fear, or making “YOLO economy” decisions based on love of life? Here’s how to strike the right balance. [[{“value”:”

Americans have been spending a lot of money lately, and not everyone is happy about it. The post-pandemic era of “revenge spending” and “doom spending” has been called the “YOLO economy” by some experts.

The attitude of “You Only Live Once” can sometimes go too far. We can’t all live like carefree spendthrifts, especially if you have people in your life that you need to provide for, responsibilities to maintain, and mortgages and auto loans to pay. But it’s understandable that so many Americans want to keep traveling the world, spending money, and living life, after the pandemic era of isolation and dread.

I would argue that “YOLO” is a better approach to personal finances than the opposite extreme: what I’ll call “YNLAA” (“You Never Live At All”). Let’s see why the “YOLO economy” is not such a bad thing — and how you can better enjoy your money and your life.

Does saving or spending bring you more joy?

Some people struggle to save money, while other people are naturally frugal and sometimes struggle to spend — even when they have plenty of money. Both of these attitudes can be “problems,” based on what you need in life and how you feel about money. Here’s a question to ask yourself: “Are you making your money decisions out of fear, or out of love?”

If you’re saving money, are you doing it because you love the feeling of being thrifty and you’re joyfully saving for important goals? Or are you saving money because you’re afraid of running out of money, afraid of being unemployed, afraid that no one will care about you unless you have money?

People who save too much money based on fear and insecurity are at risk of “Never Living At All.” If you never enjoy your money and your good health and your moments of good fortune, if you’re always working, saving, planning, and worrying about the next catastrophe to strike, you might look back on your life and realize that you never fully lived it.

Money can’t always buy happiness, but investing in relationships and making memories are two good ways to try.

How to do “YOLO economy” spending the right way

If you’re spending money in a “YOLO” way, are you doing it out of love and joy? Are you spending that money in ways you really care about — treating your friends to dinner, buying concert tickets to see your favorite musicians, taking vacations to places you’ve dreamed about? Or are you spending money based on negative “doom spending” emotions: spending because you’re afraid of running out so you might as well spend the money faster, spending to try to impress people, or spending to try to cover up for low self-esteem?

“YOLO” spending can be a good thing for your personal finances if it helps you consciously focus your spending on responsible, high-priority areas, not just spending out of boredom or disregard. “YOLO” can help you buy more time and create happier memories. If you’re saving “too much” money, you might need a “YOLO” reminder — you can’t take the money with you, and you need to try to enjoy your life while you’re living it, along with planning and investing for the future.

We survived a generational trauma

The pandemic gave all of us a rare moment to take a deep look at our personal relationships with money and think about what we would do differently, given the chance. All those months of isolation gave us a chance to reflect on how we would rather be spending our time (and money) — and what’s worth spending on. Sometimes “more money in the bank” doesn’t feel as good as you thought it would.

For example, in 2020-2021, I saved more money than I’ve ever saved in my life — but 2020-2021 was also the worst year of my life. Everyday life generally felt bizarre and awful. Even though I’m incredibly privileged and fortunate and didn’t lose any relatives to COVID-19, I still felt like a big, possibly-permanent hole had opened up inside my brain from all the anxiety, stress, and grief. The pandemic felt like life was being slowly stolen from me, with no new memories to show for it.

I know everyone’s tired of talking about COVID-19, but the fact remains: We all just lived through a generational trauma. That can make things like “Do you have exactly six months of expenses in an emergency fund?” feel pretty insignificant. If now is not the time for “YOLO” spending, when is the right time?

It’s natural for people to want to celebrate being alive, and want to experience more of life — especially after seeing how fragile life can be. I’m not going to scold people for trying to live a little, and spend their money, even if they’re not always “responsible” about it.

Bottom line

If you want to dial back on your spending and regain control of your monthly budget, that’s great. If you feel like your spending is not bringing you happiness and you want less financial stress, that’s totally valid.

But if you still feel the urge to go on vacation and meet friends at restaurants even if you don’t have enough emergency savings, even if you have some credit card debt, and your retirement investments are not on track — well, that’s OK too. Try to keep living life and buying happier times, instead of looking back with regrets that you didn’t live to the fullest.

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