Even before I got my first paying job at age 14, delivering newspapers in the early morning hours before going to school, I was fascinated with what money could buy. In the years to follow, I acquired expensive taste when it came to pretty much everything and was so focused on spending what I made that I didn’t save much.
My propensity to spend mindlessly coupled with overall poor money management resulted in a negative net worth for far too long. I eventually learned my financial lessons and in the past five years, I not only became debt-free and started saving and investing consistently, but I also learned a lot about what it means to practice conscious spending.
It may seem like an obvious concept to some but for others like me, the idea of evaluating every purchase beforehand and determining whether it aligns with our needs, values and true wants is not something we have been encouraged to do, or even thought much about.
Frugality, which can work in tandem with conscious spending, is a word that to some extent has a negative connotation, as if one is being deprived. The truth is that for some Americans, being frugal is not a choice, it’s a necessity. When a family of four is living on or less than the current equivalent poverty guideline of $23,850 per year, the pressure is on to ensure that their basic needs are met.
But if you make a solid income, well above the poverty guidelines, but you still find yourself less than satisfied with your overall quality of life, then it might be time to take a closer look at what you are spending your hard earned money on and why.
The following tips can help you to develop the habit of spending more mindfully and with purpose.
1. Determine what is important to you.
At the core, conscious spending is about choosing to spend on things that are significant and meaningful to you and spending less on things that aren’t.
Instead of buying gadgets that you believe you’re supposed to have because your friends are raving about them, or doing things because you think they’ll make you happier, try taking a moment to consider what really matters to you.
Question every expense in your budget and determine whether you are getting your money’s worth. If you have a goal to travel once a year, max out your IRA, work less hours or learn a musical instrument, then align your spending to support your objectives.
2. Define your spending.
You’ve heard it a million times over how operating on a budget and tracking your expenses are important to maintaining a positive cash flow. What you may not realize is that you are likely spending on products and services that don’t align with what you truly deem important.
Whether you use online software such as Mint.com or track every expense via Excel, review a month’s worth or more of spending to see exactly where the money is going. This is the only way you’re going to find out if your three-bedroom bungalow, weekly Friday happy hour or magazine subscriptions are costing you more than they’re worth.
From there, you can start to cut down or remove some expenses altogether in order to redirect those funds to serve your goals.
3. Control your cash.
The money that you earn requires that you assign a purpose to it. Spending intentionally not only can save you money but it can lead the way to incredible life experiences.
Nowadays when I consider making a purchase, I ask myself the following questions.
Do I need to buy this today?
Why am I buying this?
Will this help to fulfill a goal of mine?
How often will I use this?
Can I find this for less or, even better, for free?
I will say that I still succumb to impulse spending on occasion but those moments are few and far between. Over the course of time and with increased awareness, conscious spending has become the norm for me.
Conscious spending is an opportunity for you to create more value in everyday experiences and direct your money to actively support the desire to improve your quality of life. Spending mindfully is not an act of deprivation – instead, it frees you up to do better and be better.
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This article originally posted on, money.usnews.com.