Stop Your Unconscious Spending
As inflation makes our lives more and more expensive, it’s more important than ever to keep an eye on your spending habits. Budgeting is a great start, but following it is easier said than done. It is one thing to swear in the abstract to “reduce expensive coffee consumption”; but how do you stick to it when it’s already 8am and you need caffeine ASAP? Here are our tips for becoming a more conscientious spender so you can cut back on expenses that don’t add real value to your life.
Find out where your money is going
To get rid of unconscious spending habits—such as the cost of making lifestyle changes—you need to be as honest as possible about answering some tough questions about your finances.
The most important question to answer is: Where does my money go? Don’t settle for ratings here. Review your bank statements and face your spending habits. Then evaluate what expenses are really valuable to you, not some subscription services that you have long forgotten about . It is much easier to eliminate unconscious spending when you bring it to light.
Specify your financial goals
The idea of ”cutting costs” is abstract and elusive. It’s like saying you want to “learn how to cook” without even choosing a recipe or buying ingredients. Instead, you need specific, achievable goals to guide your conscious spending.
One place to start with your specific spending goals is to physically write down the things you want to buy before you buy them . Use these bank statements to tell you what items are on your official “shopping list”. When you read the items on this list, you will be able to make a more informed decision about what you really need.
Remember, you are still allowed to heal yourself.
Hard limits are a recipe for an unhealthy relationship with money. As NPR explains , it’s important to indulge thoughtfully . Ask yourself: “How do I expect this purchase to make me feel? What do I want it to make me feel? What feelings am I trying to avoid by buying it?
Only you can determine what is truly valuable in your life. Personally, I have enough money in my budget to treat myself to a daily coffee. For you, that might mean treating yourself to a gourmet dinner once a month, or perhaps cutting back on restaurant expenses so you can go on vacation in a few months. Allow yourself to be pampered, especially if it improves your overall relationship with money.
When you are confident that you only spend money on things you like and don’t spend money on things you don’t like, you will make better financial decisions. What’s more, here’s how small daily purchases really impact your finances in the long run .