Mindfulness is one of the best things you can incorporate into your life. This is true with your finances as well. Practicing mindful spending can bring you peace and joy (and help you save money).
A lot has been said about the so-called latte factor. I firmly believe that small purchases add up to make a difference in your finances. My blog is literally called “A Dime Saved”. I believe that every dime makes a difference. So why do I get annoyed when I see all those tweets and blog posts shaming people for $5 cups of coffees?
Besides for the fact that I don’t think that people are actually buying $5 cups of coffee with any regularity- I think that advice like that is focusing on the symptom, not the issues.
The symptom: the fancy cup of coffee
The problem: not practicing mindful spending
Spending money does not bring happiness… until it does. Buying a fancy cup of coffee is wasting money… until it isn’t. There are times in your life when you need a pick-me-up or a treat and a fancy cup of coffee is exactly what you need. Here I go again talking about coffee when it’s not about the coffee! It can be the snack that you buy or the subscription you have (Hulu anyone?) or the taxi you take at the end of a long day even though you could take public transportation.
Although we do like to make fun of the cup of coffee trope, mindless spending without a budget is a real problem for a lot of people. While everyone can and should allow themselves to buy luxuries and special things, you should also be aware that mindless spending does add up. Every dime counts.
Creating a budget that works and that has room for you to spend on the things that are important to you will help you stop the mindless spending and increase your mindful spending. When every dollar has a purpose then it’s not very difficult to be purposeful in your purchases.
As an added bonus, I think that once you start practicing mindful spending you will see that so many things that you spend money are unnecessary and unneeded. When you stop spending money on things that you don’t need or that don’t bring you the joy you will save a lot of money!
When you spend mindlessly then not only are you being reckless with your finances it also very rarely brings you joy. Mindful and purposeful spending and budgeting can bring you happiness and peace. By spending on things that make your life happier and fuller, you are making a concerted and conscious decision to use the money to bring you happiness. What this looks like in practice will look different for every person.By spending on things that make your life happier and fuller, you are making a concerted and conscious decision to use the money to bring you happiness.
Practicing mindful spending is what gets you to the point where you are spending money on the things that bring you joy. This goes hand in hand with what I wrote about trying to do an austerity budget in your life. You should go on an austerity budget every once in a while because when you remove things from your life and then add them back in you will have such a new appreciation for it. You will have a renewed gratitude for the basic things in life that we so often take for granted.
So how do I practice mindful spending?
Mindful Spending is spending money on what you need and what brings you joy and acknowledging that.
This means that you need to first know what you need and then know what brings you joy.
First needs and then joy. I’m guessing you know that already. Once you have figured out what brings you joy- which by the way, is easier said than done, then you can decide to spend purposefully on those things. Depriving yourself of things that bring you joy doesn’t help anyone- least of all yourself. Spending on things that don’t bring you joy also doesn’t help anyone and is a waste of money.
For some people, saving for retirement (and saving as much as The Trinity Study tells you to) or having an extra-large emergency fund makes then happy. For some people just amassing wealth makes them happy (until we get to the ethical issues of hoarding wealth) than go right ahead! If that is what truly makes you happy and you know it then that is practicing mindful spending and we don’t ever need to talk about coffee ever again except that we probably will.
When you make a purchase or pay a bill. Stop. Think. Think about why you are spending this money. Why are you buying this item? Why are you paying this bill? Is it purposeful?
This is pretty easy when it comes to essential bills. Stop. Think. Say out loud (or quietly if you are embarrassed)- I am paying my water bill so that I can have water in my home. I am grateful that I have the ability to pay for water in my home. This not only will bring you more peace in your spending but will increase your gratification for the things you have. If you feel resentful about any of your bills this can help take away some of the negative feelings as well.
If you are a parent and you say these types of things out loud in front of your kids, then you will be teaching them to not only have gratitude for the things they have but also the value of money.
If you are purchasing a want, then do the same thing. Stop. Think. Say “I am spending this money on a new top for myself. This shirt will make me happy and make me feel confident. I am happy that I can buy pretty shirts”.
Doing this exercise every so often will help you focus your thoughts and spending on the things that bring you joy. This is mindful spending. Every purchase has a purpose. Every dollar spent is on something that is important to you. Bringing joy and light into your life is a valid reason to spend money that you have.