How to spend money more mindfully
Have you ever peeked at your bank account and wondered how the balance got so low? Or do you receive every credit card statement with trepidation because you're not sure how much you've spent? Not all surprises are fun. But in this case, there's a smart solution: mindful spending.
Mindful spending empowers you to take full control of your spending habits. You gain the freedom to spend money on things you know are worth it rather than looking back with regret. This process starts with some self-reflection and a few loose guidelines. Then, depending on your preferences, you can get as specific as you like with your budget. Here's how to begin your mindful spending habit—and create a financial lifestyle that lasts.
4 Tips to Start Mindful Spending
Before thinking about your expendable income (i.e., the money it's safe to spend), make sure you have the necessities covered, including your saving goals. Once you know how much is left over, it's time to plan how you'll use it. This is the fun part! It helps you spend money in ways that make you happy and satisfied rather than on things you'll forget or throw away. Below are some tips to get started.
1. Prepare your mindset.
Consider your values and priorities. Nailing this down will help you plan how to spend money intentionally. What most fulfills you? It might be a hobby, time with friends, or seeing new places. Perhaps organization and cleanliness keep you grounded. The key here is to put your finger on what's most necessary in your life to be happy. Now consider your spending habits:
Do they align with your priorities? Think back on the past year or two. Is there anything you wish you hadn't spent so much money on? Or anything that cost a lot, but you don't regret at all? Answering these questions prepares you to spend your money wisely and meaningfully.
2. Consider experiences over things.
While material goods may seem to last longer than experiences, the same isn't true for the happiness they generate. When we spend money on an experience, we build anticipation and excitement. We have something to look forward to. Not only do we get to enjoy the experience, but can also bond with the friends and family who are included. Afterward, we reflect on and remember the experience. And that memory lives on, bringing us happiness each time we think of it. What are your best memories? Chances are that experiences came to mind—not things that you bought. So, when planning how you'll spend money, consider prioritizing experiences rather than things.
3. Buy items only if they are meaningful or add quality to your life.
When deciding whether to splurge on something, consider if it will hold its value or improve your lifestyle. If it will, then it's likely a good purchase decision. For instance, if a warmer coat will make your morning commute much more bearable, then go for it. Or maybe there's a painting that reminds you of your grandparents' home where you spent many happy summers. If you can afford it, then by all means, hang it on your wall. On the other hand, if you think that your tomorrow-self or your next-month-self will regret or feel indifferent to a purchase, then consider skipping it.
4. Name your spending goals.
We've all heard of saving goals, but have you heard of spending goals? This is an effective approach strategy to make saving fun—because you're planning to spend it on something that's important to you. Let's say your group of college friends is long overdue for a reunion. Pick a future date with them. Then open a savings account to prepare your finances for a guilt-free, stress-free trip. Give the account a name that reminds you of the goal, something like “College Reunion." By naming the savings account, you'll keep your eye on the prize and build excitement for your saving/spending goal. Once you use the balance, rename the account and start on your next spending goal. Many people also like to save for charitable donations that mean something to them. You can make sure your charitable giving is safe and meaningful by planning for it now rather than reacting to giving opportunities as they come up.
To gain the freedom of spending money on what you care about, you must stop spending on things you don't. In moments of weakness, just think of how your college reunion balance is growing. When a spending urge arises, simply consider whether it aligns with your values. If it does, you can feel good about spending your money in a mindful way. And if it doesn't, you'll get better at putting things back on the shelf.