If you’re feeling like your spending is out of control but you want to get it back on track, you’ve come to the right place. In this article, I’ll go over my top tips on mindful spending. These frugal practices have helped me save thousands of dollars to invest and fund a move halfway across the world. I’ll also go over some common reasons why people overspend and to avoid common mistakes.
Read on to learn about practicing mindful spending.
Introduction
What is Mindful Spending?
Firstly, mindful spending is the practice of being intentional about where your money goes. A mindful spender knows exactly where their money is going, how much they’re allowed to spend on specific items and how close they are to reaching specific financial goals.
Mindful spending isn’t being stingy and overly cheap – for example, completely cutting out restaurant dining and other non-essential purchases. Rather, it’s consciously knowing why you’re spending what you’re spending and setting achievable financial goals – also known as being frugal. There is a difference between cheap and frugal!
Understanding the Importance of Mindful Spending
There’s no doubt about it – creating and maintaining solid financial habits, including getting a curb on your spending and practicing money mindfulness takes work. It’s important to know why mindful spending is a practice everyone should undertake in their life.
Tips for Practicing Mindful Spending
Setting Goals
Confirm Your Values And Goals
Before you set off on mindful spending, it’s important to know your why. People cut back on spending for a variety of reasons. What are yours? Some examples of values and goals include:
- Building an emergency savings account
- Saving for a long-term goal such as retirement, extended travel or a child’s college education fund
- Enjoying simpler things in life that cost little to no money
Identify Your Spending Triggers
When practicing mindful spending and training your mind, it’s important to identify your spending triggers so you can avoid or eliminate temptations. One of my spending triggers is failing to bring a shopping list when I go to the mall. While there’s nothing wrong with browsing at the store, being around clothing, shoes and other items I don’t need is a recipe for me to overspend.
You may have other spending triggers. For example, going to the grocery store when hungry, stressed or when you want to reward yourself. Avoid going to the grocery store when hungry is easy to implement. What about when you’re stressed or want to treat yourself?
When you’re stressed, your body and mind want to feel better. It’s only natural that you’re looking for a rush of dopamine. Instead of running over to the mall to buy a pair of shoes, find other ways to make yourself feel better. When I’m stressed, I minimize spending by doing 10 minutes of yoga calling a trusted family member or friend or simply enjoying a healthy snack such as a few squares of dark chocolate or a strawberry mango smoothie.
Financial Planning Tips When Practicing Mindful Spending
Creating and sticking to a budget
First and foremost, you need to have a plan. It’s important to know:
- How much money you make per month after tax
- Which categories you should include in your budget – to get started, refer to my handy guide on the 12 most common budget categories
- How much you approximately spend on variable expenses such as groceries
- Approximately how much you spend per month on non-essentials such as takeout and movie nights out
If you’re self-employed, take the average of your last 3 months’ worth of income. For a more accurate picture of your spending, take the average you spent in each category over the last few months. After you have an estimate of your income and expenses, decide how much you want to reduce your non-essential spending by. Even reducing it by $50 or $100 is good.
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Putting Your Money to Work
Saving money is nice and all, but you need to use that money for something else. Below are the most popular ways to do so. I am not a financial advisor. Before you make any decisions surrounding your finances, please speak with a professional about options such as:
- Reducing or eliminating debt
- Building or topping up an emergency fund
- Investing for retirement
- Saving for a short-term goal such as a vacation
While all the above tips are all about cutting back or eliminating spending, you don’t need to completely stop spending money on things you don’t need (unless you want to – a great way to save money short-term!). Find a balance between being cheap vs frugal by setting a budget for non-essential spending. Choose 2-3 categories that you just can’t live without. Personally, my categories are nail salon treatments and takeout. I allocate a couple hundred dollars per month towards a weekly takeout order and a gel manicure treatment twice per month.
Not sure which categories to include? Choose 3-5 items or experiences you absolutely love but do not need for your daily survival. These could be:
- Specialty coffee
- Jewellery
- Restaurant dining
- Movie nights out
- Designer sneakers
I’ve personally had the most luck choosing 2-3 categories, but you can choose as many as you like and what suits your budget.
Ignore Sales Unless You Need Something
Who doesn’t love a good sale? I personally get a high when something I want is cheaper than I originally thought it would be. However, it’s important to generally only buy items you actually need (unless you’re treating yourself – more on that later). Mindful spending is all about purchasing items that bring you value.
Perform A Subscription and Membership Audit
Take a look through your bank statements from the last few months. Which subscriptions are you paying for? Are there any that you both don’t need and don’t use regularly enough to justify paying for? I got rid of my Netflix subscription over two years ago and have saved nearly $300 just on this purchase. Instead, I borrow videos from my public library as they provide a Hoopla account with my library card. If I really want to watch a movie, I’ll pay a few dollars to watch it (rarely). Consider if you need a gym membership. Do you use it enough? There are tons of other ways to get fit on a budget.
Another added benefit of cutting out paid TV and movie subscriptions is the opportunity to practice mindfulness. Previously, I would spend 20 or 30 minutes watching a few minutes of a movie, decide it wasn’t for me and change it to another movie or show. When you have a limited selection or commit to purchasing a movie, you’ll need to take the time to look at reviews and decide if something is worth watching. This habit has made me more mindful of the types of content I consume.
Think About It In Terms Of Hours
Another key way to practice mindful spending is to think about how long you had to work for something to pay for it. For example, let’s say you want to buy a dress that costs $150 and you earn $25 an hour. In total, you’ll need to work 6 hours (150 x 25) to earn that dress. Calculating the cost in terms of hours has helped me think twice about how long it takes to earn a product or service I want to consume. Since integrating this practice into my life, I’ve tended to purchase high-value items that I know will last longer and I’ll spend less money in the long term. For example, I’m happy to pay more for a pair of shoes that I know will last longer and I’ll have to replace them less often.
Consider Buying Used or Borrowing
If you’re dying to purchase something brand-new, think about whether it’s possible to rent or borrow the item instead. This especially goes for items that you’ll only use or wear once or twice a year such as a formal dress or power tool you rarely use.
Put It On A Wishlist
Want something but can’t justify the cost? Put it on your wishlist for your birthday, Christmas or another gift-giving occasion. Alternatively, create your own personal wishlist of items you want but either cannot afford or justify buying today or in the near future. Commit to saving a certain amount until you can buy that item.
Do a No Buy Challenge
Cutting down or eliminating spending for a day, month or even a year is a great way to focus on what matters in life. Every month, I do a no-spend week challenge where I’m only allowed to spend money on essential purchases such as groceries and transit. This one week per month helps me slow down and focus on free experiences. Take some time to write down a few free activities you can do at home or around your city. Some activities I enjoy include:
- Having a picnic at the park
- Going for a nature walk
- Hosting a games night with family or friends at your home
- Going for a neighborhood walk
- Pulling out old family albums and looking at memories from past years
Once you’ve mastered a week of no spending, try it out for a month – or even an entire year. It’ll completely change your perspective on what you truly need and want in life. If entirely cutting out purchases is too overwhelming, you can reduce them by a certain percentage for a month or year instead.
Incorporating Mindful Spending Into Your Daily Life
Mindful Shopping
Mindful spending isn’t just about determining whether or not you should buy something – it’s also about maximizing value on items you need to buy.
Comparison shopping
Take the time to compare the price of a similar or identical item at 3-5 different stores, both online and in-person. If you own a car or live in an area with a decent public transportation system, invest a couple extra hours to pick up the cheapest item at each store.
Utilizing coupons and discounts
Mindful spending also means mindful saving. Take advantage of any coupons or discounts at every single store you go to. You might think that it’s silly to look for coupons and discounts, but over time, you can save thousands of dollars.
Thinking Before You Buy
Before you commit to making a non-essential purchase, take 24 hours to think about whether or not you really need or want it. Once 24 hours have passed, you’ll have had the time to think about it.
Other Mindful Practices Besides Mindful Spending
Alongside mindful spending, you should strongly consider mindfulness in other areas of your life. I’ve saved hundreds of dollars and have improved my mental health by undertaking the following steps:
Stock a Capsule Wardrobe
Clear out your closet and commit to stocking a minimalist capsule wardrobe full of core clothing, shoes and accessories that are of high quality, match many different outfits and are suitable for a variety of seasons. A wardrobe full of clothing I use regularly has saved me nearly $300 a year as I’ve invested in quality items that only need to be placed every 4 or 5 years instead of every year.
Practicing Gratitude and Contentment
Every morning, take 10 minutes out of your day to put on some relaxing music and write 10 things you’re grateful for. This practice has helped me start my day in a good mood and stay motivated to practice mindfulness with my finances and other areas of my life.
Cultivating a Mindset of Abundance vs. Scarcity
Reflect on positive money affirmations that will help you build a mindset of wealth. While reflecting on statements alone won’t make you rich, a positive mindset will keep you motivated to work towards your financial goals and stick to a plan.
Seeking Support for Mindful Spending
Get Help Staying Centered
Mindful spending is a lot easier when you do it with someone else! Find a trusted family member or friend who is interested in reducing non-essential spending and increasing their savings. Meet once a week to chat over coffee about how things are going including:
- What categories you’ve reduced your spending in
- How much you’ve saved (if you’re comfortable talking about this)
- Which areas you need to work on
- How close you are to reaching specific financial goals
Conclusion – Mindful Spending
There are so many ways to practice mindful spending, an incredibly important aspect of frugal living. Start with one or two practices and slowly build from there. Remember to find a balance between frugality and being overly cheap. Have fun getting creative with alternative activities that don’t involve spending money. Keep a positive attitude and don’t forget you treat yourself to the occasional indulgence along the way!
Additional Resources on Mindful Spending
Further Reading
- Simple and Frugal Living Ideas by Frugal Fun Finance
- 100 Money Affirmations article by Frugal Fun Finance
- No Spending Month challenge article by Frugal Fun Finance
- Doing a Low Spend Month challenge article by Frugal Fun Finance
- Mindful Spending Tips article by How to Money
- How to Stop Spending article by Money Saving Expert
- Questions to Ask Before Spending Money article by CNBC
- 5 Ways to Avoid Impulse Buying by Bankrate
- Mindful Spending article by Calm
- Mindful Spending Ideas by Apartment Therapy
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Janita is a frugal living expert and owner of Frugal Fun Finance. With over five years of personal experience finding and trying out the best ways to make and save more money, she's eager to share her knowledge. Janita's strategies have helped her save thousands of dollars for funding investments and traveling to over 20 countries.
Janita completed training in personal finance at The University of Western Ontario and McGill University, two prestigious Canadian universities. Her expertise has been shared on GoBankingRates, Yahoo Finance, and NASDAQ.com.
