Starting the year off with good intentions is nothing new, but if you are interested in saving money and feeling better about yourself and your decisions, this can be your year of spending consciously. Keep reading to learn a few minor tweaks you can make to your routine.
Conscious spending is about taking back control over where you choose to spend your money. However, it is also about finding better options for your purchases and being mindful of where your money is spent. This doesn’t always mean cheaper, but that is an important determining factor. Conscious spending also aligns with your values. Consider some of the below questions when choosing where to point your purchasing power:
Conscious spending is not about denying yourself, but rather it’s about prioritizing purchases that matter to you. Ramit Sethi points this out in his book, 'I Will Teach You to be Rich.' For some, this will mean having a nicer car; for others, it could involve going to the movies every week.
With conscious spending, the aim is to arrange your spending to have the funds for what personally matters. To do this, we recommend making a flexible budget and continuing to be watchful of where you are spending your hard-earned cash.
Typically, about 50% of your monthly net income should be basic necessities. These can include:
We highly recommend budgeting approximately 30% of your income for the luxuries and treats that make you happiest. These will be entirely personal; your heart might flutter with thoughts of new designer lingerie, whereas someone else needs a weekend away every month to recharge. However, if you struggle to find meaning and happiness, it could be time to research depression medication.
By putting at least 20% of your monthly net income towards your future, you set yourself up for less anxiety later in life. The earlier you start consciously considering your investment goals and retirement plans, you need to save less every month. This step can include such items as:
Spend on the things that make you happy and avoid unnecessary purchases that don't bring you joy. That is the basis of conscious spending and one that will allow you to flourish this year.
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