If you don’t have access to endless wealth, then intentional spending is what you need! What exactly is intentional spending and what does it mean for you?
If you are reading this, I bet that you don’t have heaps of extra cash lying around.
You are probably trying to focus on budgeting and spending with a purpose.
Like most people, you will need to deliberately choose where, when, and how you save money and where you spend it.
Maybe you are already working on adjusting your budget and spending so that you can:
- Build up an emergency fund
- Pay off debt
- Save a down payment for a home
- Put money in a retirement fund
If you already have some financial goals like these, that’s great!
What Is Intentional Spending?
So, what exactly is intentional spending?
Intentional spending is just spending your money with a clear, focused purpose.
You make thoughtful and deliberate choices when spending – as opposed to impulse purchases.
What do you want to spend your money on?
Figure out what that is and then rearrange your budget and finances so you can spend as much money on this as you can.
This is intentional spending.
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Intentional Spending for You!
What does this mean for YOU specifically?
What do you value?
If you often just spending your money haphazardly, then you should start by looking at your short-term and long-term financial goals.
If you don’t have any, then now is the time to set some up!
First, take a look at what you value and what your financial goals are.
What do you really want and love in your life?
What do you want to do more of?
How do you want to spend your life and time?
Do you want to:
- save up for a new home?
- go on a fun vacation?
- start a retirement fund?
Look at what is important to YOU and what you want to focus on in the future.
Next, you need to have a budget in order to map out your intentional spending. Budgets can be simple or complex.
If you don’t know where to start, try a simple percentage based budget:
A lot of people also use a budgeting app, like one of these:
If you are thinking about your spending, you should also take time to consider your savings plan.
Do you have one?
What are you trying to save up for?
- a home
- an emergency fund
- college for your kids
For each financial goal, you’ll need to figure out how much money you need and what date you’ll need it by.
If you need more than you originally thought, you might need to make adjustments to your budget and spending.
Intentional Spending – What it Looks Like in Real Life
Once you know what you value and have written down some financial goals, how do you actually focus on intentional spending?
1. Track Your Spending
First, create a simple budget and use this to keep track of what purchases you make each month.
This helps you know where and what you are spending your money on and allows you to see the areas where you overspend.
You can use a super simple printout like this one to help you keep track each month.
2. List Your Financial Goals
What do you value?
What are your short and long-term financial goals?
Write them down!
You won’t be able to get anywhere without a goal.
3. Set up Saving Systems
Once you have tracked your spending for a couple of months and listed your financial goals, then you need to set up saving systems (so you can reach those goals).
Open a savings account (or more than one) so you can start putting money toward your goals.
Consider also creating sinking funds, so you don’t get into debt.
4. Cut Out Some Things
Next, start adjusting your budget so you will have extra money to put toward your financial goals.
What can you cut out of your spending?
Do you eat out often? Try meal planning to save money.
Do you have subscriptions you don’t really use? Stop them and put the money into savings.
For example, ditch the gym membership and use free workout videos online at home.
The key is to make conscious choices on what and where you spend.
Review your normal purchases and find ways to save money:
- buy non-brand items
- shop at cheaper stores
- stop buying stuff you don’t really need or use
For more tips on how to save money, check out these articles:
5. Wait Before Buying Something
I really like to use the 24-hour rule.
Wait 24 hours before purchasing something and then ask yourself if you really still need it.
A lot of things we really need are just wants.
If you still think you need it, then try asking yourself one of these questions:
Can I find an alternative or borrow the item or manage with something I already have?
Will I use this in the next month?
Do I need this to benefit my life or make me a better person?
Another favorite question I ask myself is:
How many hours of work will this cost me?
I used that question a lot when I was younger and just out of school!
For example, if you make $10 per hour and want to buy an item that costs $100, then it will take you 10 hours of work in order to buy it! (not including taxes!)
6. Keep Some Fun Alive
If you cut every single fun thing out of your budget, then budgeting and intentional spending will feel like such a drag!
Set aside a bit of money each month for small, fun impulse purchases (like a quick snack or a coffee).
7. Review Monthly
Review your budget, strategies, and intentional spending plan at least monthly.
The basic key is noting what you are buying and why you need to!
Keep your Intentional Spending Goals in Mind
If you keep your financial goal in mind (a fun vacation!), this will help keep you focused to find creative ways to save money each month!
What is your goal?
Focus on this!
Then, cut spending everywhere else – the more spending areas you cut, the more there is to put toward what you have decided has value for you.
Final Thoughts on Intentional Spending
If you want to get ahead financially, then you absolutely need to focus on intentional spending. Decide what your financial goals are and how you are going to get there!
What are your financial goals? What are you doing to reach them?