Dear Dave,

I was talking to a friend the other day, and I couldn’t remember what you said about the three good uses for money and why each is important. Would you go over them again?

– Albert

Dear Albert,

I’ve been doing this for a lot of years, and after all that time studying finance and teaching people about money, I can still find only three good uses for money – spending, saving, and giving. You should be doing all three while you’re working your way out of debt and towards wealth, and after you become wealthy.

The kid in us likes the spending part of this equation, because it’s so much fun. The problem with most people is they can’t really afford the fun they have. You should have some fun no matter where you are on the financial scale, but it should be inexpensive fun in the beginning. Then, the fun can get bigger, better, and more frequent once you’re out of debt and building wealth.

The grown-up part of us likes investing and saving, because that’s what can prepare you for retirement and make you wealthy. After a while, though, investing can feel a little bit like Monopoly. You can be up, or you can be down. Sometimes the market fluctuates, but a mature investor will ride out the waves and stay in for the long-term.

If you have quality investments with long track records of success, they will come back up. Start investing 15 per cent of your income for retirement once you’ve paid off all debt except for your home and you have three to six months of expenses saved for an emergency fund.

The most mature part of you will meet the kid inside when you give. Giving is the most fun you’ll ever have with money. Every financially, mentally, and spiritually healthy person I’ve ever met has been turned on by giving. I’ve met and talked with thousands of millionaires in my career, and one thing all the healthy ones have in common is a love of giving.

Someone who never has fun with money misses the point. Someone who never saves or invests money will never have any. And someone who never gives is holding on too tight. Do some of each, and enjoy the ride!

– Dave

• Dave Ramsey is a seven-time #1 national bestselling author, personal finance expert, and host of The Dave Ramsey Show, heard by more than 16 million listeners each week. He has appeared on Good Morning America, CBS This Morning, Today Show, Fox News, CNN, Fox Business, and many more. Since 1992, Dave has helped people regain control of their money, build wealth and enhance their lives. He also serves as CEO for Ramsey Solutions.