Mindful spending: 5 techniques to help you save money
And we’re definitely spending...according to ME’s latest report on online shopping habits, Aussies are wasting $384 on online shopping they don't intend to use, but don't return either. That's a big loss for no reason.
This is where mindful spending comes in. It’s a technique that helps you save money without the spreadsheets that come with traditional budgeting, instead, managing your emotions and consciously making decisions every time you take out your wallet could help you save. Here’s what it’s all about:
What is mindful spending?
Rooted in the trend of mindfulness which means “focusing on one's awareness in the present moment,” mindful spending is consciously thinking about your purchases.
By being mindful of your spending habits and the connections they have to your emotions, it’s easier to see where your emotional triggers are and find alternatives that don’t cost you every time you’re feeling the feels.
Questioning the value of every dollar you spend not only impacts your bank account but can also have a big impact on your lifestyle and wellbeing.
There are heaps of benefits to mindful spending, including:
- Easy to make a habit out of it.
- Giving you flexibility in your finances.
- Making you feel good about your values and decisions.
Isn’t that just the same as budgeting?
Kind of. Mindful spending is a practical solution for people who aren’t into the spreadsheets that come with traditional budgeting. But it does help you manage your money, be aware of your spending habits and cut back on areas where you shouldn’t be spending so much - so, yeah, it’s a different kind of budgeting that might suit you better.
How to spend more mindfully...
1. Reflect on each purchase
First and foremost, identify the times you have impulse spent and ask yourself “why?” Perhaps you’re a little too tired and hungry while grocery shopping? Or sitting on the lounge bored while browsing online stores?
By narrowing down the triggers to bad spending and acknowledging them, you’ll know when to think twice about making unnecessary purchases.
2. Have alternatives
Once you’re aware of the times you’re likely to emotionally spend, it’s good to have fallback options to replace this behaviour.
For example, you could go for a walk with a friend or even just call your mum for a long hard catch-up (they usually know what to say). With these alternatives, you’re taking the time to replace the temporary dopamine rush of spending.
3. Ask yourself what you value
By knowing your values, you can decide what really matters to you as a person. Don’t want to spend money at a restaurant with friends you don’t like eating at? Don’t. In the habit of buying a muffin before work every day even though you know it’s not healthy for you? Stop.
It all comes down to how each financial decision makes you feel, for example, switching to an ethical bank could make you a lot happier than keeping up with the Joneses.
4. Have a waiting period
The best way to avoid making an emotionally spontaneous spend that you could regret is by writing down a list of things you’re interested in purchasing, take a week, review it and work out if you still really want them.
By taking this time to pause, and ask “will this contribute to my long-term satisfaction?” or “is this something I could live without?” you might find your list is filled with more wants than needs.
5. Pick the right savings account
Once you’ve mastered the art of mindful spending, you’ll want somewhere to stash the money you’re no longer spending. A great place to start is with a high interest savings account, where you could have things like bonus savings rates and minimal fees.