The Art of Spending Money: Simple Choices for a Richer Life
October 28, 2025
5 min read
📚 arvy's Book Club
arvy's Teaser: Morgan Housel explained how to build wealth in The Psychology of Money. Now he asks the question almost nobody asks: What do you actually do with the money once you have it? His new book shows that spending has no formula — it's an art. Shaped by envy, identity, regret, and expectations. And that most people who "have everything" still aren't happy — because they never learned to spend intentionally.
THE ART OF
SPENDING
MONEY
Morgan Housel
SPENDING
MONEY
Morgan Housel
The book in 60 seconds
The Art of Spending Money (2025) by Morgan Housel is the third book from the former Motley Fool columnist and partner at Collaborative Fund. After The Psychology of Money (building wealth) and Same as Ever (what stays constant), he tackles the final, neglected topic: how we actually use what we've earned. His thesis: spending isn't a science with right and wrong answers — it's an art. Personal, contradictory, shot through with emotion.
Published 2025 · Follow-up to Psychology of Money · Buy (Amazon)
Idea 1: Spending Is Art, Not Formula
The finance world is obsessed with the income side: How do you earn more? Save more? Invest better? But about the spending side — how you actually use the money — almost nobody talks.
Housel's explanation: Because there is no formula. What's the right way to spend depends on your biography, your values, your fears, and your priorities. The woman who spends CHF 500 on a concert isn't "wasteful" — if music is her highest life value. The man who spends CHF 80,000 on a watch is — if he's only doing it to impress others.
The core idea
Most spending advice ("don't buy coffee out," "don't drive an expensive car") is useless — because it ignores that money means different things to different people.
The right question isn't "What should I spend?" It's "What truly matters to me — and does my spending align with that?"
Housel calls it "intentional spending." Not spending less. Not saving more. But: making sure every franc you spend actually contributes to the life you want.
Idea 2: Expectations Determine Your Happiness — Not Your Income
The most counterintuitive idea in the book: your happiness level has almost nothing to do with your income — and almost everything to do with the gap between income and expectations.
Someone who earns CHF 80,000 and expected CHF 60,000 is happier than someone who earns CHF 200,000 and expected CHF 250,000. The first has a "surplus." The second has a "deficit." And the deficit feels like failure — even though they earn more than 95% of the population.
The Hedonic Treadmill
Psychologists call it the "hedonic treadmill": every raise, every material gain also shifts expectations upward. You get used to the BMW within 3 months. Then you need the Porsche. Then the Ferrari. The treadmill never stops — unless you consciously step off.
The solution: don't let expectations rise when income rises. Housel calls it "saving the raise" — every salary increase goes into the savings plan, not into lifestyle.
"Wealth isn't what you earn. Wealth is the gap between what you have and what you need."
Idea 3: Regret as a Compass — or: What You'll Be Grateful for on Your Deathbed
The most emotional idea in the book. Housel argues: the best spending strategy is the one that minimises your future regret.
People on their deathbed rarely regret not buying enough designer bags. They regret:
The punchline: the best spending is often invisible. A home you love (even if it's not a penthouse). Relationships you invest in. Mental health. Time with your children. None of it goes on Instagram — but all of it makes you rich in the truest sense.
What This Book Means for Swiss Investors
The Swiss Paradox: High salaries, high pressure
Switzerland is the perfect laboratory for Housel's ideas. Few countries have higher salaries — and few have more social pressure to show those salaries off. The company car, skiing in Verbier, the right address. The hedonic treadmill spins especially fast in Switzerland.
At the same time, Switzerland has a system that rewards intentional spending like no other: tax-free capital gains, Pillar 3a, low inflation. A Swiss person who spends consciously and invests the rest builds wealth faster than almost anywhere else on earth.
Housel's question — translated for Switzerland
Do you need the 4.5-room flat — or would the 3.5-room do? The difference: CHF 500/month. Invested over 30 years: CHF 610,000.
Do you need the new car — or would a 3-year-old one work? The difference: CHF 300/month in leasing. Invested over 25 years: CHF 250,000.
Do you need the fine dining restaurant every weekend — or once a month? The difference: CHF 600/month. Invested over 20 years: CHF 280,000.
Housel doesn't say: give up everything. He says: spend intentionally. And invest the gap between what you want and what you need.
arvy's Take: Why This Book Arrives at the Right Moment
What's brilliant: Housel is the best finance writer of our generation because he connects psychology and money. This book fills the gap that Psychology of Money left open. It's no longer about "How do I get rich?" but "What do I do with the wealth?" — and the answer is surprising: most people get it wrong. Not because they spend too much, but because they spend on the wrong things.
What's missing: Housel deliberately stays philosophical. He gives no specific budgeting tips, no savings plan instructions, no numbers. That's intentional — but as a Swiss reader, you sometimes wish for a concrete framework. "Save the raise," for example, is a great concept — but how do you automate it?
Our answer:
Automate "Save the Raise." Salary increase of CHF 300? Increase savings plan by CHF 300. Not lifestyle. Automatic, on the 1st of the month, never think about it.
Separate "life money" from "future money." Account 1: Everything for living. Account 2: Savings plan + 3a. The money in Account 2 no longer exists — it belongs to your 65-year-old self.
Intentional spending doesn't mean spending less. It means: know what it's for. Spend CHF 200 on dinner with friends — intentionally. Save CHF 200 on the car — intentionally. Invest the rest — automatically.
The 3 Sentences to Remember
1. Spending money is an art — and most people have never learned to practise it.
2. Your happiness doesn't depend on what you earn — but on the gap between income and expectations.
3. The best spending is invisible: time, relationships, health, freedom.
"For years I've been writing about how to grow money. But almost nobody talks about what to do with it. Spending isn't science — it's art." — Morgan Housel
📚 arvy's Book Club
The Art of Spending Money
Morgan Housel · 2025 · Follow-up to Psychology of Money
The book that asks the question every other finance book ignores: What do you do with the money once you have it? Essential reading for anyone who's realised that "earning more" alone doesn't make you happy.
Also in Book Club: The Millionaire Next Door →
Spend intentionally. Invest the rest.
Set up a savings plan. Max out Pillar 3a. Invest the gap between wanting and needing. Compounding does the rest.
This article was written by Thierry Borgeat, Co-Founder of arvy, and reviewed by Patrick Rissi, CFA, and Florian Jauch, CFA.
Disclaimer: This article is for general informational purposes only and does not constitute personal investment advice. arvy is a FINMA-supervised asset manager. Amazon links are affiliate links.
