Last week I introduced a month of posts dedicated to intentionalism, and I kicked off with a post about what it means to be intentional. This week looks at the first logical step, intentional spending. Which is basically, asking yourself a lot of questions before you buy. Many would say it is about living frugally. Frugal is not a dirty word. Yes, there are some people who take it to the extreme, but there can be many advantages to consciously thinking about, spending and saving your money. I went off to the Middle East for three years after living in poverty as a university student. And the money I saved from living frugally in that time paid off an old car purchase, bought a new car on my return home, paid off two credit card debts, two university degrees, saved enough to travel for months after I left, and all the while, flew business class and stayed in apartment hotels each year during vacations. How? Everything I did, came from intentional thought.
- Set your goals.
Everybody aspires to achieve something. People might dream of paying off a credit card debt, a university loan or a mortgage, taking their family on a holiday, or saving for their dream home. Others might just prefer to get in a habit of saving. Some may not know where their money goes, finding themselves often with “too much month at the end of the money”. Whatever you want to achieve, write it down, and put it somewhere you’ll see often, taped to a wall or mirror, or a post-it stuck to your laptop screen. Seeing it reinforces it. Me, I first wanted to get out of debt, paying them off in order smallest to biggest, then I wanted serious savings in the bank. It was as simple as that.
- Develop good habits.
Having a goal in mind helps when it comes to being thrifty about your spending. Then asking yourself a few questions. Do you need a new/extra one? Always try to first look at what you have at home to avoid doubling up. Can you think about this purchase a few days before you decide? Does this fit within your budget, can you afford it with your own money rather than use your credit cards? Would you rather pay for this, or put the money toward your goal?
As a poor student, I was grateful for my storage unit full of knick-knacks, as I saved on school supplies and clothes. It also meant that when I went to the mall, I either had the mindset of “I can’t afford this” or “I already have this”, and it reduced my spending desires dramatically. This helped when I worked overseas, as I didn’t have shopping urges, and limited clothes shopping to once a year. For Christmas, I would sit down once in November with my laptop either with gifts in mind, or Google “toys for toddlers” or “Red Balloon”, and just check off person by person until all my gift shopping was done and shipped directly to the giftee, wrapped and ready. These habits are a massive turnaround from the spending style I had in my twenties.
- Consider any emotional links to your spending.
It’s important to think about your emotional attachments to shopping. Are you a shopaholic? Can you see someone about that? Do you always need to buy your kid a toy for being good in the store? Do you indulge in retail therapy when you’re feeling a particular way? Do you just love shoes/hats/bags/guitars? Are you so busy or tired you’ve become a take-out junkie? It’s important to give some thought to your impulses and the who/what/why/when/how questions behind them. Can you put limits on them – either on how much you’ll spend (take cash to help), or how many times a year (me, clothes once a year), or on how much you buy? I love Wholefoods in the US. Between the vitamins and the gluten free items and the natural bathroom products, I buy a lot, but I still go in with a list of what I need. I allow myself to enjoy wandering the aisles but stick to the list and keep want-buys to a minimum.
- Read and be inspired by money experts.
I went to a financial planner some time ago. I had paid off my debts and was saving and didn’t know where to go from there. They told me, read the books of the money experts. Engage. Learn. Then you’ll have direction. I got into a few. My favourite is the Barefoot Investor, an Australian simple life bloke who is so straightforward that he tells you exactly what he does himself and you can copy all his tips and tricks for yourself. I still kept my own beliefs and made different a few different decisions, but the more you learn about money, the more control you develop over your spending – and saving.
- Create budgets that work.
Following the Barefoot Investor, I developed a budgeting system that works well for me. I’m the gal who can write down everything I spend, but the books never balance. Barefoot has been a change for the better, because he does a salary split of 60% expenses, 10% disposable income, 10% saving for holidays, new fridges and such, 20% saving for debt eradication, home deposits and the like. He also has an extra account for rainy day savings that you put any other income into – these savings paid for my apartment when COVID brought me back to Australia at short notice. Of course, everybody has their own preferences, but I’ve taken Barefoot’s suggestion one step further by listing all the sorts of things I need/want and listing them under each split and adjusting my percentages to cover the priorities as I need to. Once you’re set up with such a system, it’s so simple to not give further thought to your finances. I know that my savings are in line to meet my next goal of moving in November. Whomever you choose to follow, make sure you prioritise achieving your goals, realistically cover your living expenses, and set aside a reasonable surplus to work toward your dreams.
- Repair before replace. Secondhand before new. Support local small businesses.
Part of frugal spending means making thoughtful choices about buying new. Look around what you have, and ask yourself if you need new or if there is an alternative. Can you repair something to use it again or before you sell or donate it, rather than tossing it out? Can you fix what’s broken? Can you visit a charity store or search gumtree for a used version? Do you know of a local business who makes what you need without the big department store overheads?
Just some of my examples include, keeping a ziplock of broken bead necklaces ready to take to a repair shop for a new life. Always buying microwaves on gumtree. Buying most kitchenware in the charity shops, or in Covid, choosing Australian brands. Buying eco-brands handmade by entrepreneurs at little market stalls, or following them on facebook pages and ordering online from etsy pages. I do annual visits to my favourite vintage store for clothes. When you put thought into your purchases, it makes it so much easier to feel good about the origin of your things, and your place in its circle of life.
- Live the life you want.
When you are on track with your money, and spend it wisely, you achieve your dreams much quicker than when you aren’t as conscious of your spending. For example, how much money is easily wasted on takeout, coffees, lunches from the café, drinks after work, because It’s only $5, $10? Conversely, following a budget, separating needs from wants, shopping only when you need, choosing local, repairing old, noticing that extra $5 saved, $20 saved, pooling it into your savings, all leads to a better life.
I was very fortunate in the Middle East to have my living expenses covered. Out of my pocket I paid for days off spending (meals, sightseeing), running my car, my phone, my osteo visits, and the rest went to savings, about 80% of my income. Each year, I’d have a month-long holiday in which my employers paid for a return trip home. From this, I would happily allow 100% of my month’s pay to go on whatever I wanted during that trip, business class upgrades, hotels, mini-trips elsewhere, whatever I wanted. The reason I let that happen, was because I knew this pre-summer holiday would immediately be followed by three months of summer work 24/7, during which there would be no day off and no time/chance to spend money, so those three months would equal 300% of pure savings. Needless to say, this is how I was able to achieve so much debt relief and savings in three short years. When I travelled last year, I was equally thoughtful as I went. I camped to save money. I spent a part of my trip walking across countries to save on transport and challenge myself. I wanted to travel across Africa, but this was much more expensive, so I got a temporary travel job, left my stuff with friends in London, and worked hard for a few months to pay solely for Africa.
You can have the life you want, you just have to be very clear about what it is you want, and set your mind to it then work to achieve it. You have to recognise when you’re not earning enough to realise your dreams, such as when I was a student, and take more drastic measures if possible to improve your chances, but it is so worth it in the end.
That is how I did it, and how you can too.