Many people think I disapprove of spending money on anything. I like to relate budgeting and spending to dieting. Just as with dieting you need to consider your calorie intake and amount of exercise you get. With budgeting you need to consider your income and the fixed expenses you have. Once you deduct your fixed expenses such as mortgage/rent, utilities, food and debt repayment then you can see how much you have to spend on other things.
As it is discussed in David Bach's books, "Smart Women Finish Rich" and "Smart Couples Finish Rich" and other resources it is helpful to sit down and think about what is important to you about money. Once you decide what you value, it may be easier to budget your money towards those things.
I feel it is also important to track your expenses so you can see how you are spending your money. It is easy to take out cash and all of a sudden your wallet is empty and you may have little idea of what you actually spent your money on.
So it is alright to spend money, just think about what you are spending it on.