This post is from our regular Wednesday contributor, Erin.
After countless mentions of mindless spending, the need to have your spending align with your values, and then spending on what matters most to you, I’ve finally decided to write a post specifically on how you can spend meaningfully.
Why is it important to spend meaningfully? I believe the number one reason is that it serves to make us feel better about our overall spending.
If we know we’re putting money toward our values, and not wasting it on meaningless stuff, we feel good.
Personally, I tend to feel guilty when I make an unplanned purchase, or when I spend on something I’d consider a bit trivial.
While I can technically afford to do so, I’d rather be putting my extra funds toward my student loan debt. When I fail to do that, I feel disappointed in myself.
Spending meaningfully means unplanned purchases happen less often (or not at all), allowing me to feel a lot better about my spending and my financial decisions as a whole.
A lot of people don’t realize how much stress their spending is causing them, as evidenced by the amount of people that complain they’re living paycheck-to-paycheck while spending frivolously.
When you spend meaningfully, you’ll encounter less stress.
By evaluating your values and determining what makes you happy, you’ll know what’s worth spending your money on.
If this sounds great to you, read on to find out how exactly can you go about spending meaningfully.
Critically Evaluate All of Your Purchases
If you’re not already tracking your spending, then you should start.
Besides that, just being aware of what you feel tempted to purchase will help. Question everything that isn’t a necessity (like food and water).
If you pull something off a shelf at a store, evaluate whether or not that purchase aligns with your financial values or your goals.
I always remind myself that any money spent outside of necessities means less money going toward my student loans. This helps to streamline my purchasing decisions.
This might sound nitpicky, but I question my smaller purchases as well.
Why? Because it’s about reinforcing the habit.
If you’re grabbing a bunch of low-cost items to buy with abandon, then you’re probably spending meaninglessly.
The point is to spend meaningfully on everything – even that $1 chocolate bar.
Ask Yourself These Questions
In order to help you evaluate your purchases, ask yourself the following questions:
- Will spending my money on this item bring me happiness for more than just a few days/months? – If the answer is no, put it back. Part of spending meaningfully is bringing things into your life that you want to stay there. Instant gratification is the enemy.
- Can I see myself getting a lot of value out of this? – Similarly, you should make sure you’re going to be able to enjoy whatever it is that you want to buy, multiple times. This is partially why I don’t buy movies or books. I know I’m not one for re-watching or re-reading!
- Is this purchase bringing me closer or further away from my goals? – Like I said earlier, I’d like to put as much as possible toward my student loans. I know that any money I spend otherwise is pushing debt freedom further away.
- Will I regret this purchase a year from now? Will it just be collecting dust? – This can be difficult to answer, especially if you have good intentions. I have purchased a few things with every intention of getting the most out of them, only to find that it wasn’t what I was expecting, or that I didn’t have the time to dedicate to it. At least make sure you can recoup some costs by selling the item if it comes to that.
- Do I want to buy this to fill a void? – Lots of people go shopping because they’re unhappy or bored. Getting something new is a temporary high that will wear off at some point. If you know you don’t need something, you’re probably just trying to fill that void.
Create a List
I’ve seen a few people say that creating lists of things they want and need is a great way to combat mindless spending. You just need to be sure you answer the above questions before putting an item on your list.
If you want to be a little extreme: if something is not on the list, you can’t buy it.
How can this help with spending meaningfully?
Let’s say you’re out shopping and see a nice pair of jeans on sale. They’re a great price, but they’re not on the list because you don’t need them. Keep walking!
My own process for determining if I want to buy something is a longer one – the more expensive an item, the longer I think about it.
Again, instant gratification isn’t your friend! Think your purchases through, or you might end up with buyer’s remorse.
Spend Intentionally
Another way to view spending meaningfully is to think of it as intentional spending.
Your money needs a purpose. Too often, people assume the purpose of their money is to simply buy whatever they want at any given time.
When you figure out your values, you’ll figure out a purpose for your money.
If you’re trying to build up a portfolio so you can be financially independent, then the purpose of your money is to give you freedom in a few years.
If you want to spend a year backpacking across the globe, then the purpose of your money is to allow you to travel without financial worries.
You’re intentionally investing your money for the future, or intentionally saving so you can fulfill your dreams of traveling.
This puts the focus on your values and makes it easier to resist spending on things that don’t matter.
I should also at least mention spending on experiences over material things. Experiences are more likely to make you happy and provide you with lasting memories!
Put Your Money to Work for YOU
Spending meaningfully does require a bit of discipline and determination. It can be tough to ward off all the spending temptations around you.
It’s well worth getting a system in place, though. Once you do, it will become second nature to you.
I’ve always liked the comparison of money to soldiers – you send your money out to battle for you when investing, paying off debt, or buying something.
Make sure your money is on your side.
_________________________
Spending meaningfully is one of the best ways to get your finances in order. When you do that, everything else tends to fall into place.
Make it a priority to create a list of your values, to track your spending, and then evaluate what you’re spending on. Get your spending as close to your values as possible.
Do you make it a habit to spend your money meaningfully? Have you spent mindlessly in the past? What helped you transition?
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I would not be able to succeed with money without my budget! Planning where it goes is the key to my success. Otherwise, I’m naturally a spendthrift, and I end up with more month left at the end of the money.
Such a well thought out post! Thank you!
Great thoughts here Erin. I think when you live by some sort of budget, spending plan or whatever you want to call it – spending meaningfully needs to become a habit. We really look at if we’ll get value and use out of the item and what it will do for our goals. Doing so helps us slow down the purchase decision process and help avoid, for the most part, stupid decisions we shouldn’t be making.
I was definitely a mindless spender in the past and part of what helped me change was giving definition to what I truly wanted in life. Once my goals were clearly defined, it was easier to put each spending choice in a category and know whether or not it was taking me farther from my goals and if so I could determine if the choice was one I would be happy about or not.
Very well put together, Erin!! I had a horrible habit of spending to reduce stress/celebrate/punish or whatever other emotion came my way. Money/purchasing was almost like a drug. For a long time this made me afraid to have money, but now that I’ve learned and follow the tips you share above, my life and relationship with money is finally healthy and productive. Great post!
I have gotten way better at this. Now I’m at the point where I need to stop hanging on to money for dear life, and in fact invest a little in myself, which may be tough in the short term, but will hopefully pay off in the long term. For instance purchasing a camera. But believe me I weighed that decision FOR-ever!
Great tips Erin! Giving my money a purpose and deciding whether a purchase brings me closer to my goals or not was most helpful for me. When transitioning from mindless spending to mindful spending at first I was already starting to feel better about making purchases and I ended up saving more as well.
Financegirl I think having some sort of plan in general, even if it’s not technically a budget, is the key to financial success. Having a purpose behind spending really helps!
Davistommy Thanks!
FrugalRules Same here – I’ve always been bad at spending “on the spot” as I like to think about what a purchase will really do for me, and how it will impact my overall financial picture. Delayed gratification definitely helps to cut down on regrets!
blonde_finance Exactly! It’s so important to cut through the noise and figure out what you want your money to do for you. Too many people spend without truly knowing why they’re spending. Reflection goes a long way.
Laurie TheFrugalFarmer Thanks Laurie! I’m so glad you’ve been able to overcome that and be awesome with your money! I have no doubt it’s something many people struggle with, and having a purpose for your money really helps.
I think spending is hard for anyone who has worked hard to pay off debt of save up for a huge financial goal. It’s important to spend with a purpose but not get so bogged down in the process that you make yourself miserable by over analyzing every purchase. It’s a tough balance to find and something I struggle with all the time.
Beachbudget I’m with you there! I had been thinking of purchasing a new laptop for years before I finally did it, but I’m glad I did. Knowing when to invest in yourself can be tricky. I think so far, every time I have, it’s paid off.
Chonce Thanks! So glad it’s been working for you. That was what helped me the most, too. Reframing spending makes a huge difference.
Eyesonthedollar You and me both! Making spending decisions can get tiring rather quickly when you’re too analytical. I’m finding that by defining what’s truly important to me, I can spend a bit easier knowing that it will add value. It speeds up the process a little!
I used to spend mindlessly a whole lot in the past. Hitting rock bottom in 2009 and realizing that I didn’t have to do that is what helped me change.
I love the idea of a wish list. It’s a good middle ground.
I’ve always been able to save a decent amount, probably 20% of my net pay however have realised that recently those odd expenses have popped up i.e. weekend trips away, nights out etc..
On this then I’ve decided to start tracking as it’s easy to not realise when you’re putting it all on the credit card..
Although I love travelling and having a great time, there’s probably a few other things I could intentionally/meaningfully start to spend money on! :)
Jason @ The Butler Journal Hitting rock bottom doesn’t feel great, but it can be the wake up call some people need to get their finances in order. Glad it helped you change your ways!
Mark@BareBudgetGuy It is! It’s also good to have some guidelines to follow when shopping.
mycareercrusade Saving 20% is not bad at all, but it’s great to see you think there’s some room for improvement! I actually find tracking easier with credit cards since it’s right there on the statement. I’m horrible at remembering to record cash transactions.
Erin @ Journey to Saving mycareercrusade You’d think that the credit card statement would help and I will keep using the credit card but there’s an app I downloaded called Good Budget, everytime I make a purchase I’ll punch it in the app, which really won’t feel like a lot of effort for me :)
It let’s you set up “envelopes” as well, could be one to review.. If I cut out the holiday fund could easily bump that to 30%
Yes! Spending meaningfully and in line with my values has been absolutely transformative for me. It’s all about goals for me now. Anytime I want to buy something, I ask myself if I want it more than my long-term goals, and the answer is almost always “no.” It sounds overly simple, but it really has helped me curtail unnecessary spending.
And I’d say do question necessities like food–that was a huge area of overspending for us in the past. By really examining our grocery bill, we were able to reduce it by quite a lot. I love your suggestion of creating lists–that’s definitely a tactic that helps remind me of what I actually need!
Creating a zero-sum budget helps us spend mindfully. Once we put our spending plans on paper, it makes it harder to stray from them or get off track. We mostly stick to the plan!
Spending consciously, meaningfully, intentionally- whatever you want to call it, is in my opinion, the foundation for a building a stronger financial future.
mycareercrusade Erin @ Journey to Saving Hmmm I may have to give Good Budget a try. I do have to agree with Erin: I’m terrible at remembering cash transactions. I charge almost everything for two reasons: rewards and having a record of it.
As you know, I’m a huge advocate of spending mindfully and giving money purpose through goals. It’s an absolute must and it also helps you spend guilt-free. I do believe in being purposeful with money but I also believe money is meant to be enjoyed. So if you enjoy something – whether someone else may consider it trivial or frivolous – shouldn’t matter as long you buy it mindfully, without creating debt or sacrificing more important goals. I think many people get themselves in trouble buy shopping to fill voids, whether it is boredom, loneliness, etc.
Mrs. Frugalwoods It does sound really simple, but when you put it into action, it’s extremely powerful! I found it became habit for me after about a month (when I started focusing on paying off my student loans faster).
Ugh, yes, food…I’ve been getting better at questioning our decisions there as well. Food can add up so quickly if you’re not careful, even if things are on sale.
Holly at ClubThrifty I’ve always been interested in your budgeting method, Holly. I think zero-sum budgeting can definitely help with prioritizing since you have no choice at the end of the month!
brokeandbeau It’s good to see so many of us are in agreement! I hope we can get the word out to others, as it’s been pretty transformational for me.
ShannonRyan Well said, Shannon! Spending meaningfully can absolutely mean something different depending on the person you ask. It’s important we respect that and trust that other individuals have evaluated their priorities. I know cable and dining out isn’t important to me, but for others, it is. Nothing wrong with that. The “mindless” part of spending is the biggest problem!
Oh I’ll still continue to charge the Amex to get those points but every time I make a purchase, I’m going to pop it in the app, even if it’s a $ for a bread roll..
Would be happy to update and see how it goes and if it’s too annoying if you’re interested :)