What triock said.
You'll come across some hard levels, eventually, especially the side-quest teleport maps, and, trust me, you'll die at least once, during those. Since I don't recommend sacrificing experience and fame points to be resurrected at the exact spot in which you died, stack up on gold so you can spawn at the entrance of the level.
If you're really, really good at Torchlight and end up never dying a single time, there are still some options to spend your gold, there's a guy in town that sells equipment in a sort of "gamble mode" (he's near the entrance, standing close to the river), he sells really expensive stuff that, more often than not, pays off to buy. It's not ideal, these games are all about the loot you find, not the equipment you buy, but it's a viable option to spend your money on, provided you won't die and won't need gold to respawn at the entrance to the level.
N.B.: The further into the mines, the higher your level and/or the more difficult the side-quest teleport levels, the more gold you need to respawn. It will reach absurd amounts, eventually, so, if you think you'll die a few times during later/harder levels, stack up on that gold, as it is way better to sacrifice gold than experience and fame, and definitely better than being sent all the way back to Torchlight.