Conscious Spending is a Key to Financial Independence

Conscious spending

What is Conscious Spending?

Conscious spending isn’t about sacrifice and deprivation – it’s about spending your money smarter, so that you can save more. Conscious spending means you decide what your money is worth and what you’re going to spend them on. It helps you feel comfortable with your spending – and not guilty.

Your best tool for conscious spending is a well-planned budget that keeps you aware of your expenses. Even the small things count.

When creating a budget and tracking your expenses, you will probably find that there are several black holes into which your money disappears. Holes you weren’t aware of.

Memberships and Subscriptions Fees

Let’s take an example. Remember that trial period with a low fee that you signed up for a while back? Well, guess what, the real fee isn’t that low, and you forgot to cancel.

Memberships and subscriptions fees that automatically renews are often an invisible burden and not a conscious choice. Especially the ones that only pup-up only once a year.

It’s a good idea to turn off automatic renewals for services and online subscriptions, even if you use them regularly, to avoid unpleasant surprises and review if you really want to keep paying or not.

Netflix and TV Channels

You can just watch so much TV and so many movies each day. Add all subscription costs to see the total amount. Divide the total amount with the hours you spend watching TV or other media.

Most of us spend a lot of money on cable TV and streaming services like Netflix and Spotify. The question is do you get your money’s worth?

The point isn’t whether you should have one or five TV subscriptions, the point is that you must consciously decide how much you want to spend on them.

Your Old Phone

Same thing with the latest smartphone. It’s probably much cooler than the one you’ve got. Should you change?

Without a conscious plan it’s easy to be blinded by new commercials and cheap offers. When you swap your “still-working” phone for a new one, it should be in your plan. It should be a conscious choice so you don’t feel bad about it afterwards.

Going Out with Friends

Conscious spending doesn’t mean that you are doomed to a life in solitary. Friends are important and sticking to a Spartan spending regimen that makes you unhappy simply won’t work – unless that’s what you truly want.

Going out with friends

For most people, enjoying life and being aware of what things cost can walk hand-in-hand. You just have to be aware of how much you can spend on going out and when you’ve had enough (applies to both food and drinks). Your friends won’t abandon you just because you didn’t take that last drink or just had an appetizer for dinner. As long as the restrictions you put on yourself aren’t a burden, you’ll be fine.

Clothes and Shoes

There is no doubt that a lot of our over-consumption is about clothes and shoes. Americans buy five times more clothing than they did in 1980, not because they need more clothing but because compulsive fashion shopping can be hard to resist. In other words, people don’t always shop because they are in a need of something, they shop because they like shopping.

The problem, of course, is that compulsive shopping of clothes, shoes, and bags adds to your expenses – and to the environmental problem.

A rule of thumb: If it’s not in your conscious spending plan – you can’t afford it.

Shopping for food

The Waste of Food

Food waste has become one of your greatest environmental problems and it most likely effect your budget too. Americans throw away up to 40% of the food they buy – and still eat too much.

If you are more conscious about what you buy and how you cook and store food, you’re less likely to waste. Buy less and more often helps over-spending. Don’t cook more than you and your family eat. Don’t clutter the freezer with too many left-overs. These are simple reminders to help you be more focused on a sustainable food budget.

What’s the Point of It All?

Conscious spending is a cornerstone when it comes to saving more of your available income and to become financially independent or to retire with a good income.

It’s also about personal choices. Nobody should tell you that you must save 40% of your income each month and cut down on lattes. It’s up to you. The important thing is to get the head out of the sand, understand where your money is going, and picture yourself where you want to be later in life.