This is by no means a personal finance blog and I’m certainly not an expert on the topic, but many of you told me you’re looking for more conscious living tips from me and since I was once a reckless spender who took it upon myself to reform destructive spending habits, today I’m sharing some simple, everyday insight on how I learned to save and spend money consciously.
Six years ago, when I left my full-time job, one thing was clear – I would no longer be able to spend money the way I once had. Looking back, the way I spent wasn’t healthy and I knew it, but with the security of a regular paycheck, nothing was stopping me. There’s nothing quite like leaving the comfort of a full-time job to force you to change your ways. For me, the very real and imminent responsibility of running my own health coaching business became my overarching focus and I knew that for it to succeed, I needed to make some changes.
These are just some of the small actions I took to clean up my spending habits and learn to save and spend money consciously – more so than I ever had before. Now that I’m married, things are different but many of the same concepts still apply and I continue to build on them as an independent business owner. Six years later, I only wish I had developed some of these habits much sooner.
One // Enlist the Help of Technology: There are literally thousands of apps available that can help you manage money more effectively so it’s essential to explore which ones are right for you. Two I like and use regularly are LearnVest and Digit. LearnVest gives me a snapshot of all of my bank accounts on one page and helps me budget, categorize my spending and set savings goals. After reading Financially Fearless by LearnVest Founder Alexa Von Tobel, I started the habit of taking a “Money Minute,” a few minutes every day devoted to quickly surveying my spending, savings and where I stand with my bank accounts. With LearnVest, you can even work with a dedicated financial planner.
Digit is an app that helps with savings. Based on my earning and spending habits it determines how much money I can delegate to a savings account and automatically takes it out of my checking account daily. I already have a separate savings strategy, but this is something extra that I can then transfer into my savings account as I wish. The only caveat is that the savings in my Digit account don’t earn interest the way they would in a traditional savings account. For me, it works as an additional means of saving, but I wouldn’t use it as my only means.
Two // Buy Only What You Need: Shopping has always been my weakness. My closets used to be bursting with clothes and shoes, but now I buy much less than I used to. When I left my full-time job, I simply couldn’t spend as much as I had on shoes and clothes — and for the first time in my life, I didn’t want to. Forcing myself to take some time off of shopping made me realize that I had been searching for happiness in material things. Now, I buy a few key items at the beginning of every season and avoid going into stores just to browse. If I see something I want, instead of making an impulsive purchase, I take some time to think about whether I need and it why. If I’m still thinking about the item a few days later, I’ll buy it if it makes sense. I also unsubscribed from all retailer and sample sale emails.
Three // Take an Inventory: A la The Life-changing Magic of Tidying Up, I go through my closets at least once per season and clear out anything that doesn’t bring me joy or that I feel has served its purpose for me, but that someone else may be able to use. I bring some items to a local consignment shop that pays cash for the items they want. Others I send to ThredUp (check out my previous post on how ThredUp works here) which sells and/or upcycles anything I send. I also use Poshmark (use code MARISSAMNYC to earn $5 when you sign up, I get $5 too) to sell like-new items. These are all ways to earn extra cash that you can delegate to savings or some other purpose as needed.
Four // Give Up Something: Take an inventory of your subscriptions and memberships and also how much you spend on sundries or incidentals in a month (LearnVest can help with this). Can you give up the second coffee of the day and delegate that money to savings? Maybe walk or take the subway to work instead of a taxi? I used to get a beauty sample subscription box that was $10/month and it was one of the first things to go on my quest to spend and save money consciously. Sure, I looked forward to it every month and of course, $10 doesn’t seem like a lot, but it was an extra $120/year I was spending on samples! Not to mention, all those samples were cluttering my closets and drawers. It was a simple way to save a little extra money without feeling like I was giving up something really big. The best part was, I didn’t miss it and there were residual benefits (less clutter in my home) to giving-up my sample box.
It’s said that “where attention goes, energy flows” and when you turn your attention to a positive money mindset with clear goals and conscious action, you will attract and create more of the same. I noticed that when I started embracing a more positive, action-oriented mindset around my own finances, the income I craved as a small business owner easily came to me – and often in ways I never imagined it would!
What simple practices are you using to save and spend money consciously?