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Pieces picked up from a decade of learning

The significance of money and wealth goes far beyond material comforts and desires. It goes to the core of human emotions, including security, freedom, self-worth, envy and greed.

Regardless of how much money you earn, spending money well is the key to wealth. Having money gives you options. Not having it attracts stress and haunts relationships.

Those are a few of the insights I learned over a decade of writing more than 400 newspaper columns and two books on the topic of spending your money smarter. They are the backdrop for the thousands of tips about such topics as grocery shopping, phone bills, credit scores, insurance, eyeglasses, bicycles and funerals.

As this column passes its 10th anniversary this year, here are Spending Smart fundamentals to consider in the new year.

  • Spending matters: Cost-cutting just to be a cheapskate is a worthless endeavor. But plugging the leaks of wasteful spending allows you to redirect cash to things that truly matter to you. Spending smart should be about liberation, not deprivation. Minding your spending is worth your time. You can't out-earn dumb spending.
  • No such thing as "saving": Money is only good for one thing — spending it. Saving money is making a disciplined decision to spend later rather than now. It's envisioning your future self and deciding to be kind to that person — or kind to someone loved by your future self.

If you don't have any spending goals, don't bother saving any money.

  • Aim at something: "If you aim at nothing, you'll hit it every time," the saying goes. Brainstorm money goals and write them down, both long term and short term. Each objective must have a dollar figure and a date for completion. Once you have goals, your poor everyday spending decisions automatically improve. You have a reason to reject daily spending temptations.
  • Find a clue: Don't bother creating a budget. Just examine your past spending and categorize it. Money leaks will be obvious and, beware, they will cause dismay. "I spend $100 a month on convenience-store soft drinks?"
  • Get FIT: If you're overwhelmed with where to start, get FIT. That is, pay attention to spending on food, insurance and telecommunications, which includes phone and video-entertainment bills. Those three spending categories are sources of painless cost-cutting.

Nearly every time I recommended that people shop for a better price on auto insurance, I get emailed success stories from pleased readers. A thought for the new year: Dine out because you want to, not because you're a poor meal planner.

Compare prices: Prices vary, sometimes widely. Failing to compare prices is making a choice to be powerless as a consumer. Research consistently shows that consumers buy from the first merchant they visit.

"Consumers say, 'Well, I may be paying a little bit more, but I don't have time to shop around.' But if they knew the degree to which prices may vary, they would find it's well worth it," Donald Lichtenstein, a marketing professor at University of Colorado, told me in 2007.

With the Internet and smartphone applications that allow you to check prices, don't make a decision to be powerless.

Buy happiness: Shift discretionary spending from things to experiences - vacations, attending live events and visiting friends. Research shows memories of experiences are durable, improving with age because we tend to remember the good parts of an experience, while bad ones fade.

Reflect on what brings joy to your life. What makes you feel guilty, angry, resentful and unhappy? Examine areas where you're growing, where life is getting better, where you're making a difference.

"Once you've looked at those three things, you ask yourself, 'How can I use money to help me?' " Gretchen Rubin, author of "The Happiness Project," told me in 2009.

Happiness corollary: Throw money at a problem. If marital strife is dampening your happiness and conflict stems from arguments over housecleaning, hiring a maid can be money well spent.

If mowing the lawn makes you miserable, hire a lawn service. Itching to buy a new car but nothing wrong with your current one? Get your car detailed and buy a new audio system, if that will satisfy the urge.

Cars are crucial: If you're careful with only one purchase, make it your next car. Buying new cars, especially luxury brands, is wealth-repellent. Their enormous prices and wicked depreciation sabotages household finances.

"I think BMW is a great car," Thomas J. Stanley, author of the famous book "The Millionaire Next Door," told me in 2006. "But I won't buy one because there is a relationship between wealth and how much people spend for cars."

Five years later, money-advice guru Clark Howard identified car-buying as the most important consumer issue.

"People buy cars on emotion," Howard said. "They buy in a day, and they're stuck with consequences for four to seven years."

  • Recurring threats: Don't fret about a $100 one-time purchase. The killer expenses are the recurring ones. And they're sneaky. Three $30-a-month subscriptions don't sound like much, until you realize it's nearly $1,100 a year.
  • Cost per use: Is a purchase worthwhile? Examine its cost per use instead of purchase price. That's how a $150 pair of jeans that you wear often is a better deal than a $50 pair you seldom wear. Items you use daily do well in a cost-per-use analysis. Mattresses, coffee makers and computer monitors are examples.
  • Just do it: You don't have to perfect every aspect of your money-spending life right away. Get started with one issue that's been nagging you. Maybe you call and ask for a better cable TV rate, switch your banking to a credit union, or comb your credit card statement for easy spending cuts.

Gregory Karp, the author of "Living Rich by Spending Smart," writes for the Chicago Tribune. Readers may send him email at gkarp@tribune.com.