The Three Uses of Money
Every pound you have can only do one of three things
Pete Matthew argues that money has only three legitimate uses: spending it on living well now, saving and investing it so you can spend it later, and giving it away. Every financial decision ultimately maps to one of these three buckets, and balancing them is the core craft of personal finance.
The framework cuts through complexity because it forces you to ask, for any pound: which of the three jobs is this doing? It also reframes generosity not as a leftover after spending and saving, but as a core, equal-weight use of money. Matthew calls giving the highest calling and the hardest to do well, but the most rewarding.
Applied at scale, this becomes a values lens. People who only spend feel hollow; people who only save feel trapped; people who give well feel free. The healthiest financial lives blend all three intentionally rather than letting circumstance default the mix.
- Money has exactly three uses: spend now, save to spend later, or give away.
- Giving is the highest calling of money but the hardest to do consistently.
- Money is a means to an end, never an end in itself.
- The healthiest financial lives intentionally balance all three uses rather than defaulting to one.
- When money becomes all-consuming, it has overreached its proper place.
- Audit your current allocationLook at the last 12 months of spending and saving. Categorize every pound into spend-now, save-for-later, or give-away. Most people discover giving is effectively zero.Pro tipInclude intangibles like time and skills in the giving bucket if cash giving feels out of reach.
- Set a target ratio that reflects your valuesDecide intentionally what mix of the three uses you want, not just what fell out of habit. There is no universal right ratio, but the act of choosing forces clarity.
- Automate the saving portion firstSet the save-for-later bucket on direct debit so it leaves on payday before you can spend it. This removes daily decision-making and protects future-you.Pro tipSet a calendar reminder every 3 months to nudge the amount up by a small increment.
- Build a deliberate giving practiceTreat giving as a category, not a leftover. Decide who, how much, and how often, and let recipients see the impact. Matthew encourages giving with warm hands during your lifetime rather than waiting for inheritance.Pro tipInclude family in the giving bucket — gifting to children and grandchildren now is often higher-impact than leaving it in a will.
- Permit yourself to spend on living wellIdentify what 'living well' means for you specifically and ring-fence spending for it without guilt. Over-saving while never enjoying life is a real failure mode.WarningMany of Matthew's retired clients work like dogs, retire, and die within months without ever spending what they built.
- Review the balance annuallyOnce a year, ask whether the mix still reflects your values and life stage. As income grows or life shifts, the right ratios shift too.
Demo's grandparents pulled 20 grandchildren onto a family cruise rather than leaving the money in a will. The shared memory dwarfed any cash inheritance.
A client built a beautiful home in Portugal with her husband but, after he died, never goes — they had been all-in on each other and she has no friends to travel with.
Matthew has very wealthy clients whose primary daily activity and conversation topic is volunteering at a debt counseling charity.
Matthew was raised by an evangelical pastor father who modeled service tirelessly, with a house continually filled with needy people. While he rejected aspects of his religious upbringing, he kept the orientation toward service and putting assets to good use, and that distilled into the three-uses framing he now teaches clients.
He says he doesn't think you need religion for this to be true, but his upbringing gave him an early model of generosity as an equal partner to consumption and accumulation, which most financial education ignores entirely.