Mindful spending: how to stop spending money on unnecessary things
We’ve all fallen victim to a sketchy sale or two. To a deal that wasn’t the excellent value for money that it marketed itself as. But more and more people in the US are changing their spending habits in 2023, rejecting overconsumption in favor of mindful spending.
Here’s everything you need to know to feel better about how, when and why you buy.
If the answer to either question is “yes”, it’s worth learning to practice mindful spending as soon as possible. This is especially true if saving money is a growing priority.
Mindful spending can help you to:
Budget more effectively for long-term life goals
Reduce your reliance on money
Take emotions out of the equation
Buy only what you genuinely need (and, in some circumstances, what you genuinely want)
What is mindful spending?
In the simplest terms, mindful spending is a lifestyle management approach to money. It’s also known as ‘conscious spending’ or ‘intentional spending’.
If implemented in your own life, it will improve your awareness of how you’re actually using your money.
When you spend with caution and thought, you take stock of your financial values, goals and human needs.
You have a clear chance to ask yourself, “Do my current spending patterns support my values, goals and needs? If not, how can I change things so that they will?”
Considering necessity first and foremost, you’re prevented from throwing money away when you don’t need to.
You make smarter purchasing decisions with the right overarching thoughts, values and plans in mind.
Ultimately, mindful spending improves your day-to-day life by shifting your mindset and lowering your stress levels, replacing what you think you’d benefit from with what you genuinely require.
The money you save adds up, and your reduced reliance on money decreases your stress and anxiety.
Nine ways to practice mindful spending
Americans are constantly driven to take advantage of sales and discounts, and it can be hard to resist when a reduction feels too good to be true.
Some of the most significant discount shopping days of the year include New Year’s Day, St Patrick’s Day, and of course, Black Friday.
When you need a particular item, and a deal pops up, it makes sense to buy it at its lowest price.
But how often have you been guilty of buying something you didn’t really need — or perhaps even want — because the discount lured you in?
Leave less-than-sensible impulse buys behind and turn to mindful spending as a better alternative.
Here are nine ways to get started:
1. Pay attention to the actual value of special offers — Special offers are always tempting, but they can trick you into buying things you don’t need or incentivize you to buy more than you need. $1,000 off an iPhone 14 Pro Max looks like a great offer, but is it going to be that much better than your current phone, or would you prefer to keep the money in your pocket?
2. Prioritize saving over spending — Open a savings account that accrues better interest than your current account. Set up a direct deposit of money into this account each month to ensure savings goals are met consistently (and you can’t spend more than you intend).
3. Watch out for false economies — A false economy is a saving that, over time, becomes a greater expense. For example, a cheap dupe of a quality product that breaks in three months and needs to be replaced. Or a monthly payment plan that’s massively more expensive in total than the upfront cost if you paid in full. Stay on the lookout for false economies, and always weigh what you’ll pay now against what you’ll pay later.
4. Work out the hour value of an item before you make a purchase — Divide the cost of the item by how much money you make per hour. When you’ve completed this calculation, ask yourself, “Is this worth the price of my labor over X hours?”
5. Complete an audit of all your monthly subscriptions — From Spotify to Apple TV, there are a million and one different subscriptions you might have signed up for and then forgotten all about. Cancel any unnecessary outgoings. Fully consider whether you need what you’re paying for.
6. Remove your cashless spending option — The current contactless limit in the US is $200. When you’re using contactless, paying for things is as simple as a tap, and losing track of your spending is easy. If you fall into this trap, try removing your cashless options. Bring only the amount of cash you want to spend when you go shopping, give yourself a definite limit and avoid the temptation to overspend.
7. Invest time and energy into budgeting — After the pandemic hit in 2020, 64 per cent of Americans changed their spending habits. They’re now making better financial choices for their evolved priorities, and you could do the same if you chose to budget, plan and get stuck into your finances.
8. Try a no-spend challenge — Choose one day a week and commit to not spending anything on that day. Try to go a month without buying anything non-essential. No-spend challenges come in all shapes and sizes, but whichever challenge you choose to rise to, it should help you to get your savings back on track and reset your purchasing patterns (especially essential if you’re prone to over-spending).
9. Cut food shopping costs by planning ahead — The average single American should spend between $59 to $91 weekly on food shopping, and the best way to keep this figure low is to determine your meals and required groceries in advance.
You don’t need everything all the time, and you know this better than anyone. There’s a reason you’re reading this article.
By spending less and being more conscious about what you do choose to buy, you’re investing in a brighter future for yourself.
The lifestyle shift to a mindful spending approach is a big one, but it’s one that will 100 per cent be for the best.
Kate has written for leading publications and blue chip companies over the last 20 years.