This financial approach involves intention, rather than mindlessly swiping your card and regretting it later.

Conscious Spending: Smart and Fun Personal Finance

You don’t have to think or feel it, thanks to a flexible approach to personal finance called mindful spending.

“Unlike a budget, which looks back, a conscious spending plan allows you to look forward,” said Ramit Sethi, author of bestselling “I’ll Teach You How to Be Rich” and CEO of the eponymous blog. . “Spending consciously is about spending extravagantly on the things you love, as long as you ruthlessly cut costs on the things you don’t. It’s not about restriction. It’s about being intentional with your money, then spending on the things you love, guilt-free.”

That doesn’t mean some age-old general savings guidelines aren’t valid, like saving 5 to 10 percent of your income and having an emergency fund for three to six months, Sethi said.

But a conscious spending plan lets you say, “Yes, I want to go on vacation. Yes, I like nice clothes. Yes, I’ll spend on these things guilt-free. I’ll also invest, save, and insure myself.” that I can cover my rent,” Sethi said.

Whether wanting to save money, clean up debt, or have a little more fun makes you want to try spending mindfully, you can apply this approach today. Here’s how.

Rewiring your spending habits

The term “conscious spending” implies that people experience unconscious spending, said Bradley Klontz, financial psychologist and associate professor of practice at Creighton University’s Heider College of Business in Omaha, Nebraska.

“It’s almost like unconscious eating,” he said. “We’re just without a plan, we don’t really pay attention, especially using credit cards.”

The most important part of undoing unconscious spending is asking yourself specific questions about your financial goals and life desires: Where did my money go? What do I like to spend money on and why? How much do I need for fixed expenses, such as bills and rent? How much do I want to invest and save, and why? How much do I want to set aside for impulse purchases or expenses, like a drink with a friend or a parking ticket?

Your answers should be very clear, Klontz and Sethi said. To say that you want to be able to do what you want when you want is abstract. But declare that you and your partner want to fly to Italy with more legroom, visit for three weeks and watch the sun go down over Rome while drinking wine? It’s a vivid, specific, emotional and meaningful vision, Sethi said. “What doesn’t make sense is just a spreadsheet with numbers. Truth be told, nobody cares.”

Answering these questions can help you feel excitement and clarity about your finances, identify what matters to you least, and live in harmony with what’s important to you. “Then it’s much easier to cut into areas that don’t matter as much,” Klontz said.

Your answers to these questions constitute what Sethi calls your “rich life” – your personal and financial goals that are unique to you, uninfluenced by what someone else thinks you should be doing.

A personal example: I recently decided that on work days I would drink free instant coffee at the office instead of spending several dollars on lattes a few times a week. Weekends would be when I allow myself to indulge in coffees with friends. I decided this because on weekdays, needing more energy was my only reason for wanting coffee – while having money to enjoy better coffee and spend quality time in my favorite weekend coffees were more important to me. This way I get what I want from my coffee consumption by consciously focusing on what is most valuable to me, rather than restricting all coffee purchases.

When you’ve already intentionally thought about what you enjoy, you don’t have to feel anxious, obsessed, doubtful, or guilty. When Sethi was a child, his family could not afford to buy appetizers at the restaurant, he said. These days, one of his “money rules” is never to question spending money on appetizers, because “it gives me great joy to be able to buy any appetizer that looks good to me,” he added. “I don’t have to decide, ‘Should I pay that much? Or shouldn’t I?'”

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If you want to try conscious spending, try it for a month. Then, using your bank statements or a budgeting app, review what happened, what worked, and what didn’t.

“It’s not going to work perfectly the first time. It’s a system that you’re going to continually tweak,” Sethi said. “But overall you’re going to start to understand how it works and what you need to change. And then you make the change every month after that.”

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