"Mastering Money: The Do's and Don'ts of Mindful Spending"
Navigating personal finances can often feel like walking a tightrope, especially for young professionals just starting to build their financial foundation. It's easy to get caught up in the hustle and bustle of life and lose sight of where your money goes. But fear not! Here, I’m going to walk you through the do's and don'ts of spending so you can start spending mindfully and take control of your financial future. The last tip might even shock you!
1. Do Think About What You Want to Show for Your Money
Have you ever reached the end of the week, month, or year and wondered, "Where did all my money go?" This is a common experience when spending isn’t intentional. When I was younger, I spent so-called disposable income and often didn’t have anything to show for it. The term "disposable income" isn't quite accurate; it literally means money left after taxes, but we shouldn’t think of any money as disposable. All money should be purposeful and spent with intention. As I got older, I started to see and believe that every dime matters, so I shifted my mindset. Just like "free time," I wanted to be intentional about how I spent after-tax and other expense money—I wanted something to show for it. Without a clear plan or goal, it’s easy to spend money on whatever catches your eye at the moment. Before making a purchase, ask yourself what you want to have to show for your money. Will this expenditure bring lasting value, or is it a fleeting indulgence? If it is a fleeting indulgence, that’s fine, but go in with eyes wide open, and remember it still needs to go on your financial scoreboard.
2. Don't Go to the Grocery Store Hungry
We've all been there: walking into the grocery store with an empty stomach and walking out with way more than we planned to buy. I am still guilty of this. Some years ago, I learned that stores actually position certain items to nurture your impulse buys. I used to wonder if there was a hidden motive behind coupons—of course, there is. If a store can get you into the location with the lure of a discount, you are likely to spend more. Much like if you test drive a car, the car salesman knows you are likely to buy the car, so don’t test drive if you are not ready to buy! Back to grocery stores…When you're hungry, everything looks good, and it becomes easy to overspend on snacks and high-margin items placed conveniently near the checkout. Plan your grocery trips after meals and stick to a shopping list to avoid impulse buys.
3. Do Know That Most Spending Beyond the Basics is Emotional
Whether it's the "I deserve this" mentality after a hard day’s work or indulging in retail therapy, emotional spending is a common trap. The most recent thing I bought in the last 12 months that was an emotional purchase was a membership at Stretch-U. Don’t get me wrong, I need to stretch more, but did I need the monthly subscription that I am paying for but rarely use? Probably not—but it sounded great to say, “I am a member.” What about you? What was your last emotional purchase? Recognizing that most non-essential spending is emotionally driven can help you pause and reconsider before making a purchase. Budget for occasional treats, but find other ways to soothe or reward yourself that don't involve spending money.
4. Don't Gauge Your Self-Worth by Comparing Yourself to Others
In a world dominated by social media, it's easy to fall into the trap of keeping up with the Joneses. Remember, comparing your financial situation to someone else’s is a race to nowhere. Focus on your own financial scoreboard instead. It’s not about how much you make, but how wisely you save and invest. As a mentor once shared, “the flashiest person may be the brokest.”
5. Do Not Think It's Bad to Spend Money—Just Spend Responsibly
You will never hear me say don’t spend money! Our economy is driven by your spending. Consumer spending (what you spend alongside every other person in this country) as a whole is more than $13 trillion, making up around 70% of the American GDP. I want you to spend money; we can’t function without it. Just don’t spend money you can’t afford to spend. It’s actually music to my ears when I hear, “consumer spending is down,” particularly when the spending is funded by debt and our collective consumer default rates are climbing. It’s okay to take a breather and save for when things go bump in the night—when you have an unexpected challenge. I see more challenges on the horizon…save some money. Living a life where you never allow yourself to spend any money can be just as unhealthy as overspending. The key is to spend responsibly in a way that aligns with your values and gives you peace of mind. Respect debt, avoid unnecessary expenditures, but don't deny yourself life's pleasures. Balance is crucial.
By keeping these do's and don'ts in mind, you can transform your spending habits and lay a solid foundation for a financially secure future. Remember, the goal is not to deprive yourself but to spend in a way that aligns with your values and long-term goals. Start making mindful spending choices today and enjoy the peace of mind that comes with financial stability.
What additional points would you include? Let me know in the comments below. #MindfulSpending #FinancialWisdom #SmartMoneyMoves #BudgetingBasics #SpendWithPurpose