Intentional Spending 101

Spending with intention, is a frugal habit used by many. It is used as a way to spend your hard earned dollars the way you want. Intentional spending  sometimes is also referred to as conscious spending.

Let’s take a closer look at what Intentional Spending is , how you can implement it, and how it will benefit you. 

 

What is Intentional Spending? 

Intentional spending is all about having a mindful plan for your money. A plan that includes your financial hopes and dreams, savings goals and what you wish to spend  your money on in the day-to-day.

When you choose to spend with intention, you are able to save more, spend less and spend your money on more meaningful items or experiences.

With practice, over the years I have become very good at intentional spending. To the point where I have to talk myself into spending money.

I know. That sounds a little backwards.

I stop and think through all of my expenses and decide if I really want to allocate some of my hard earned money towards it.

A simple example of this would be choosing between name brands and store brands when I go grocery shopping. Is it worth the extra money to pay for the fancy packaging and branding? – Not always.

 

Reasons You Should Be More Intentional 

Intentional spending decisions can help you keep your wallet in check. By weighing the decision to purchase something, it can help to control your emotional, or impulsive shopping habits. It also gives you opportunities to divide your money for debt repayment, bill paying and savings goals. 

 

Intentional spending allows you:

• Freedom to spend money on what you really want. (May have to save up)
• Frees up money, to go towards paying down debt
• Relieves stress 
• Financial security – by saving money to reach financial goals 
• Stops hasty impulse buying
• Room to invest for your future 

 

Intentional spending allows you more freedom with your money, regardless of if you are broke or well off. 

How To Be More Intentional With Your Spending

 

1. Values and Goals

Determine what you value most. For couples or those sharing finances, sit down and choose your goals and values together. You do not have to share the same values as your parents did, as your friends or neighbours. Choose what you value, what speaks to you.

Do you value travelling the world?

Perhaps a well rounded wardrobe?

Or regular nights on the town? 

 

 

 

 

2. Where is Your Money Going  Currently? 

Figure out where your current paycheques are going.  What kind of items are you purchasing? 

To do this you must track every purchase you make.

There are many ways to track your spending. Try smartphone apps, a spreadsheet or the old school paper method.

Once you have been tracking your spending for a few weeks or month, you can look back and assess the damage. 

Go line by line and see where you spend your money the most. You can even break it down furhter from looking back at the receipts.

 

 3. Create a Budget

What goes hand in hand with tracking? Budgeting!

Just like with tracking find a method that works for you, that actually works that you will stick to. Something that you can easily review and assess.

When budgetting this is where you can allocate money to certain accounts based on your values. Or with draw money for an envelope system.

 

Envelope system – Have an envelope dedicated to certtain categories of spending. Add your budgetted amount of cash to each envelope. Once the envelope is empty, then you have to wait until next week or month.

Trade-offs

When reviewing your budget this is where you can also decide to make trade-offs if needed.

A trade-off is when you choose to save in one area and spend more in another. Essentially taking the money spent from one area and using it elsewhere. 

Say you want to save up for a car, and are looking for an area to cut back in. You notice your cable and internet bill are getting out of hand, and decide to cut back.You choose to stream and get rid of the cable, saving you $100 a month. That $100 now can go into your car fund (YAY!).

4. Lists Are Your Friend

 “Create a list and stick to it”.

How many times have you heard that before? I do say it alot, because it helps!

By shopping with a list, it helps you spend with intention. By taking the time to think about what you actually need. Creating alist helps you avoid all those tempting ‘sale’ items, that you would not of normally needed if they were not on sale.

 

Feel free to create multiple lists, not just for groceries.

Have a list of clothing items you will need to replace soon, or need for the upcoming season. 

 

Have a list in your phone of ‘Items for the home’, ‘To pick up when on sale’ (be it lightbulbs or cleaning supplies).

By having a list of items to be on the look out for, it will allow you to buy them when they are on sale, instead of when you desperately need them and have to pay full price. 

 

 

 

5. Wait It Out

 Stop. Think. Then buy.

The 24hr rule, 3-day rule which ever you choose. Take some time to pause and think things through.

It doesn’t have to be that long either.

I have done this multiple times, where I picked up an item, put it back, and continued my shopping. Then I  came back to it, maybe walked away again, and back, before deciding I actually want to purchase it. Perhaps the store associates may think I’m a little nuts, but I don’t care, I am thinking through my spending with intention. 

By taking the time to think through a potential purchase, it helps you avoid those pesky impulse buys. In turn keeping more money for you.

 

Things to think about before you buy: 

• Is this just retail therapy?
• Is this an impulsive purchase ? 
• Would I buy it, if it was not on sale? 
• Cheapest Buying quality over lowest price
• Will this appreciate with time ?(House renovations)
• Will this hold its value? (Car purchase)
• Do I have something similar at home?
• Can I borrow this item from someone?
• Can I afford it?
• Is it in the budget?

 

In Conclusion

This frugal habit of intentional spending, can be hard, but don’t get discouraged. Try, try, try again until it becomes second nature.

Review your goals and spending on the regular.

Avoid spend impulsivly, by thinking before you purchase.

Wishing you all the best on your journey to spending with intention.

 

Until next time,

 

Connie 💕