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The Art of Spending Money
Matt Karamazov
October 16, 2025 ā¢ Estimated Reading Time: 19 minutes
YOUTUBE š CREATOR LAUNCH ACADEMY š PATREON
Morgan Housel is one of the few living authors who, whenever they come out with a new book, I will immediately drop everything and read it.
And, well, I guess dead authors donāt ever come out with new books, so I donāt know why I said ālivingā authors just now. Anyway, the point beingā¦
The Art of Spending Money isā¦sensational.
I loved The Psychology of Money (as did millions of other people), and I still think Same as Ever is his best book, but this one?
Itās easily one of the best books Iāve read so far in 2025 (out of 69 books, itās probably top three), and my full summary as well as all of my notes and takeaways is below.
Now, before our coffees get cold, letās hit the books!
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After achieving my (somewhat meaningless) goal of reading 1,000 books before I turned 30, I set a new (also meaningless but cool) goal of reading 10,000 books. As of today, Iāve read exactly 1,423 books, including 69 books so far this year, and if youāre interested, hereās my full Reading List.
āIn between the numbers, charts, and data sits the messiness and absurdity of the human mind. Money is a remarkable tool that can provide a better life if you know how to use it. But knowing how to use it is quite different from knowing how to acquire it.ā
The Art of Spending Money is yet another great book by Morgan Housel, this time about what money can buy, what it canāt buy, and how to tell the difference.
I ended up with twelve pages of notes from the thing, and itās easily one of the best books I read in 2025. Iāll still be thinking about what I learned from it in 2035. Likely longer.
A few terms stand out that helped me think completely differently about money and its relationship to my life and happiness. One is āsocial debt,ā which refers to how there are often hidden costs associated with certain large purchases and expenditures.
Once youāre expected to spend money, you have to keep spending money, or else risk losing the status youāve gained within your newly-entered socioeconomic reference group.
Then there are ideas like āmental liquidity,ā meaning the ease with which youāre able to change your mind based on new information. Housel also talks about how memories of past experiences can appreciate and grow in value as you get older - similar to Bill Perkinsā concept of āmemory dividendsā in his book, Die with Zero.
One of the main lessons of the book is that people are so often clueless about what will actually make them happy. The wrong question to ask in that situation is, āCan money buy happiness?ā Rather, you might ask, āHow can money buy happiness?ā
āWhat havenāt I tried spending money on yet that might actually improve my life? Whatās my thing? And how can I reduce the unnecessary spending in the other areas of my life so that I can spend even more money on what will truly make me happy?ā
However, there are very few āshouldsā in this book, for the simple reason that you, and you alone, know whatās best for you. The Art of Spending Money isnāt prescriptive as much as it is about helping you detach from the emotional element of money and look somewhat dispassionately at its true nature.
Itās even forced me to reevaluate my own spending. As I write this, Iāve sold my Porsche and Iām getting the down payment ready for my first Lamborghini (a used one). I like to travel, I love going to death metal concerts, and I spend loads of money on books. But Iāve been wearing the same two sweaters for the last five years.
I have zero interest whatsoever in buying some giant house. Itās extremely rare that youāll find me eating at expensive restaurants, and youāll never catch me waiting in line for the latest iPhone. My spending decisions in one area of my life look completely different than they do in another area of my life, and thatās because I carry virtually zero āsocial debt.ā
My spending habits are inconsistent, which, as Morgan Housel argues in the book, is likely a good thing. It means that Iām making my own purchasing decisions, not buying what random strangers āexpectā me to buy.
First-class flights will always seem like a giant waste of money to me; instead, Iāll throw the money I would have spent on leg-room for three hours into index funds and crypto. Iāll spend ridiculous amounts of money on buying time, freedom, and independence, and virtually nothing on fancy vacations.
As you can imagine, this is a book that can keep you busy for long after youāve read it. Housel covers a lot of ground (in this, and in his other two books, which are also excellent), and virtually everybody can make astounding financial progress (and āpeace of mindā progress) by thinking deeply about what he has to say.
Iām calling it right now: many of the things Iāve thought about and pondered as a result of reading this book will seep into my consciousness, quietly informing my spending decisions for many years to come.
Another main idea you could take away from the book is that if you donāt think money can buy happiness, you just havenāt yet found your āthing.ā It could be something physical, like a car. Youāll get no judgement from Morgan and I.
Or maybe youāll discover that giving money away makes you stupidly happy and that youād love to devote your life to that pursuit instead. Or maybe youāre happiest when youāre saving 50% of your paycheck, buying time, freedom, and independence that you can cash in later whenever you want.
Itās your life. Itās your money. Take inspiration from others, sure, but donāt allow them to dictate your spending decisions or desires. Learn who you are.
Try a million things (wide funnel, strong filter), discard what doesnāt work for you, and through trial and error discover what does. Assume that you donāt actually know what will make you happy, for the simple reason that you havenāt tried enough things.
But maybe, through this gradual, iterative process of spending and searching, searching and spending, and then discarding and deciding, you can begin to find out.
āNone of these topics have to do with spreadsheets or numbers. Theyāre so much messier than that. Itās all psychology, sociology, and understanding how everyoneās different.
Understanding how everyoneās just trying to make it through life the best they can, making sense of the world given the experiences theyāve had, who they want to be, and what they think others think of them.
In school, finance is taught as a science, with clean formulas and logical conclusions. But in the real world, money is an art.ā
āEnduring happiness is found in contentment, so those happiest with money tend to be those who have found a way to stop thinking about it.ā
āMost debates about whatās worth spending money on are actually just people with different life experiences talking over each other.ā
āAn important question I love is: What have you experienced that I havenāt that makes you believe what you do? And would I believe the same if I experienced what you have?ā
āThe more you say to yourself, āI would be happier if I had this new car,ā the more youāre just focusing on the fact that youāre not happy right now. Desire is a hidden form of debt that must be repaid before you get to feel any happiness.ā
āPeople from a planet without flowers would think we must be mad with joy the whole time to have such things about us.ā
āThereās almost no end to this. The millionaires look at the centimillionaires, who look at the billionaires, who look at the decabillionaires, who look at the centibillionaires. And what do the centibillionaires want? Immortality.ā
āHappiness is that feeling you get right before you need more happiness.ā
āThere is no such thing as an objectively good experience - every amount of āgoodā is just the gap between expectations and reality. Itās the distance between what you have now and what you either had or expected before. The contrast, not the amount, is what makes you happy. Few things are more important to keep in mind while spending money.ā
āThe amazing thing about memories is how they can compound over time, just like a stock. When I was ten years old, memories of what I did at age nine were boring. Today, those same memories are astounding and hilarious to recall as I can put them into the greater context of my life. In fifty years, they will be my most cherished possessions.ā
āSaving for the future creates independence today. If I save $100 for the future, what does that cost me today? I donāt think the answer is $100, or anything close to it.
Sure, I could have used that money today to buy a $100 shirt or a $100 dinner with friends. But by saving it for the future, I gain something today: $100 in independence.
One hundred dollars in options and freedom to do anything I want in the future that costs $100. One hundred dollars of time that I might need at some point. One hundred dollars of reduced stress about my ability to care for my family or retire when I need to.
That can be as tangible a benefit to me today as buying the $100 shirt. Once you view savings as providing the benefit of independence, you stop viewing saving for tomorrow as sacrificing today.ā
āHow to live a good life is endlessly complicated, but sometimes the best way to understand a complicated topic is to pay close attention to the few big rules that carry the most weight. Let me propose one: The simplest formula for a pretty nice life is independence plus purpose.ā
āThe concept of f**k-you money - having so much money that you can tell people to f**k off without fear of repercussion - is great. But so is kindness and civility. So I aspire to āNo, thank you, Iām not interested in that, I respectfully disagree, and Iām free to ignore youā money. One is rationalizing being a jerk, the other is intellectual independence.ā
āI am 100% happy to watch you get really rich doing something that I have no interest in doing.ā
āNo one can recognize how many different ways there are to live a life, and how imperfect they are, and honestly say theyāre doing everything right.
Iāve also changed my mind about plenty over the years. And the right lesson from changing your mind is wondering which other of your beliefs youāll eventually update. When you accept how messy money can be, you value good-enough simplicity over the false comfort of complexity.
Over the years, Iāve come up with a few simple thoughts that guide how I think about money in my own house:
Spend less than you make; quietly compound; money serves you, not the other way around; no one is thinking about you as much as you are; independence is wealth; health is wealth; aim to be a good ancestor; and love your family.
Thatās a pretty comprehensive list.ā
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OK, thatās it for nowā¦
Iāve got plenty more excellent book recommendations coming your way soon though!
Thereās also my YouTube channel, where I publish book reviews, reading updates, and more each week.
And if you want to learn how Iāve built an audience of 170,000+ followers across social media, became a full-time creator, and how Iām rapidly growing my audience and my profits in 2025, join us inside Creator Launch Academy and thatās exactly what Iāll teach you ā weād love to have you in the community!
With that said, I hope you enjoyed this edition of The Reading Life, and enjoy the rest of your day!
Until next timeā¦happy reading!
All the best,
Matt Karamazov
P.S. Whenever you're ready, here are two more ways I can help you:
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