The Art of Spending: Mastering Money Before Saving It
- T.
- Oct 31, 2024
- 8 min read
Updated: Nov 2, 2024
Hello again, fellow productivity enthusiasts! Today, we are flipping the script on traditional financial wisdom. Instead of going on about the importance of saving, let's talk about the art of spending instead. After all, what's the point of saving if you don't know how to spend your money wisely?
You brush your teeth every day without thinking too much about it right? Why is that? Because it's a habit that was instilled in you when you were younger.
So, logic would dictate that there's no reason why you can't gain a new daily habit, right? Your brain is capable, you just need to start off with something small. So, let's start right now by answering these questions honestly to gain some insights into your spending habits & start making changes to improve your financial well-being.
QUESTIONS:
What Triggers My Spending?
Where to start
Identify if certain emotions, situations, or environments lead you to spend more.
Questions to ask yourself
Do I shop when I'm stressed, bored, sad or happy?
Do I see a sale for shoes & think "Bargain!"...even though last time, those 'must-have' heels just turned into dust collectors.
When a friend flaunts their latest tech gadget, do I suddenly look at my perfectly good mobile phone & think it's from the Stone Age - great, now I 'need' a new one!
How to improve
Find healthier ways to cope with your emotions. Activities like stretching, exercise, meditation, journaling, spending time with loved ones, or my personal favourite, listening to (& singing along with) music can all help manage stress & improve your mood without spending money. These don't have to be lengthy sessions either, 10-15mins can make a big difference!
I have a premade "Anger Release" playlist on Spotify ready to go for my bad days - belting out those tunes at the top of my lungs on the drive home from work really does help release a lot of my built-up stress! Even if I may get a few looks whilst stopped at the lights...😅🎶
Do I Have a Budget & Do I Stick to It?
Where to start
Assess whether you have a clear budget & if you follow it. If not, why do you find it challenging to stick to your budget?
Questions to ask yourself
Do I set a budget for eating out, but when a wild weekend appears my budget is thrown out the window?
Do I put funds aside for the bills, but then the latest streaming service subscription whispers to me "What's one more?"
How to improve
The simplest way I have found to keep on top of payments is to write down what I earn, a list of bills & when each bill is due (monthly, weekly etc.).
If a bill is $100 per month & you're paid weekly:
Divide $100 by four (=$25) & set up an automatic transfer from your account (the day after pay day) to pay that $25 towards the bill (use BPay or bank details on previous invoices)
By the time the bill is issued you should have it paid off (or be very close to having it paid if it's not exactly the same amount each month).
This approach takes the emotion out of the payments & after a few months you won't even need to check on the transfers, you will know it works. When the bill is issued check if you have anything left to pay, then pay the remainder & adjust your future automatic transfers (if necessary).
Am I Influenced by Social Pressures?
Where to start
Consider if you’re spending to keep up with friends or trends.
Questions to ask yourself
When everyone's raving about a new restaurant, do I fall into the FOMO trap & suddenly think my homemade meal is very underwhelming?
When my workmate gets a new car does it have me second-guessing my trusty, fuel-efficient hatchback?
How to improve
Ask yourself, do you actually want it, & if so, why? Write a Pros and Cons list to rationalise your choices & then make a decision.
How Often Do I Make Impulse Purchases?
Where to start
Reflect on how frequently you buy things on a whim & what prompts the purchases. Are they often items you don’t really need?
Questions to ask yourself
A choccie at the checkout is no biggie, right, but when it ends up being every trip to the shops, those little treats start to add up to a lot. Why do I do that? Is it after I've had a bad day, or a fight with a loved one?
Does an ad for a 'limited time offer' grab my attention & before I know it, I'm the owner of a brand-new waffle maker...and I don't even like waffles?!
How to improve
Make an effort to figure out what your current & future priorities (& goals) are. This can help you train your brain to see theses influences for what they are, passing fads; focus on what you believe will be more rewarding for you in the long run.
What Are My Financial Goals & Am I Working Towards Them?
Where to start
Think about your long-term financial goals. Are your current spending habits helping or hurting your progress towards these goals?
Questions to ask yourself
I have a dream of a beachfront retirement, but my savings are looking more like I will end up having a view of a kiddie pool rather than an ocean view. What is stopping me from saving consistently, even when I know what I want?
I really want to be debt-free, yet my credit card is used daily for unimportant things, why do I do that?
How to improve
Reflect back on what your goals are, if they have changed since you last thought about them & WHY they are important to you. Make a vision board of these goals & have it somewhere you can see daily - you could even do a digital collage style vision board to have as your laptop or mobile background - seeing something daily that reminds you of what you are aiming for can really help with your mindset around money.
Do I Know How to Spend Money on Groceries?
Where to start
Simple: Go back through your shop spendings; log in to your online banking & see how much you spend on groceries each week, fortnight, month.
Detailed: Start keeping your receipts from your grocery shops & after a few weeks>a month start to review exactly what you have purchased.
Questions to ask yourself
Do I have good intentions when I go to do a grocery shop, but forget what I need?
Do I get distracted (suckered in) by the advertising saying "sale, sale, sale"
Do I end up spending way more than I wanted?
How to improve
Ask yourself why the items you are purchasing are necessary & if you could have done the shop differently.
Plan meals ahead of time
Don't go shopping when you're hungry
Buy foods that are in season
Use rewards and cashback programs (I use ShopBack & CashRewards frequently)
Bulk in bulk (only if you can afford it, the unit price is significantly cheaper than buying individually & you know you will use the additional quantity before it expires)
Use your freezer to save meals
I repeat, don't go shopping when you're hungry, it's never a good idea!
Can I Add to The Cart?
Where to start
I'm not going to discourage you from adding items to your cart BUT what I encourage is to try waiting at least 48hrs before purchasing those things in your cart - use the time to think about if you really do need it or if you were just emotional & trying make yourself feel better.
Questions to ask yourself
Do I actually need it?
What else could I do with that money; buy something more important, save it?
If you do still feel like you need to buy it after waiting the 48hrs, it's likely you would have been sent a discount code via email from the website to entice you to buy it. So, you have contemplated whether it is necessary and,
Decided yes (& gotten a discount), or
Decided no, & you've saved that money for when it is needed, how great is that!
Am I Automating my Bill Payments?
Where to Start
Automation helps to take the emotion out of spending money, it's that simple. But I'll be honest, there is a bit of up front work to get your figures on how much to automatically transfer, where to transfer & when, however once that is done it really is suuuuper simple to keep on top of it (& requires VERY minimal thinking after it's all set up)!
Questions to ask yourself
Are my bills set up to automatically pay set amounts per pay day, ensuring I never overlook a payment or lose sleep over it?
Is a portion of my income directed straight into savings? Can I actually afford what I am putting aside, or is it unrealistic? Do I keep taking the savings back out? Why?
How to improve
Try setting amounts to automatically come out of your account & go to your bills - ideally the day after your pay day. This is simpler for reoccurring bills that are around the same price each time they issue you a bill - think of utilities like electricity, gas & rent, mortgage etc.
Don't try to save if you keep spending what you put aside, you're just keeping yourself in a viscous circle. Instead think about the amounts you spend on essentials, give yourself a small amount of 'play money' to enjoy the odd takeaway coffee & then see how much you can afford to save.
Am I Visualising my Goals?
Where to Start
Now we touched on this topic a little earlier & yes, I agree, it can sound a little 'woo woo' BUT there are a lot of people that really benefit from visualising things to keep motivated.
Ideas
A vision board with photos of your dream house, vacation location or new car you are saving up for keeps you focused on the bigger picture.
A chart showing your debt slowly getting lower & your savings slowly going up is the grown-up version of a gold star chart; who doesn't love a gold star?!
Food for Thought...
Before you tighten your belt, or try to save, make sure you grasp the art of spending. It's not just about where your money goes, but also where it shouldn't go.
Slowly reframe your mindset around spending
Look into what you currently spend
Find a goal to aim for to help stop unnecessary spending
Treat yourself in small ways to keep motivated (it doesn't always have to be strict - in fact it hurts you more when you are too strict!)
Find the habits you want to do daily & slowly stack them into a routine (making the change less overwhelming & more manageable).
It's about slowly teaching your brain that you can stick to something - changing your self-talk over time - having something your brain can reference back to later that shows "You know what, yes I can do this, because I have done this before.".
Remember only you can motivate yourself & change your mindset,
just take it one small step at a time & stay Simply Productive!!
Thank you so much for supporting the blog.
Sending productive vibes your way,
T💜
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