Mindful spending is a concept that is gaining recognition as a way for us to be more intentional about how we spend our money. So what does it entail?
These days, money comes and goes very easily. Since we use cash so little, we rarely have the sense of handing over our hard-earned pounds when we buy anything.
Tapping a credit card, or making an online purchase is frictionless. We don’t need to pause to count out the notes we need or check that we get the correct change.
One of the consequences of this is that spending can be largely thoughtless. We might regret a purchase later, but there is no real sense of giving anything away at the time we make it.
It is all gain, and no pain.
Getting mindful
For many people, a powerful way to reconsider our spending is therefore not to agonise over budgets and we are spending on. But rather to think harder about we are spending.
There is a growing understanding that we can make a big difference to our financial wellbeing by being more intentional in the moments we are actually handing money over. To give it a name: mindful spending.
Being more mindful of what we are doing has been shown to have significant benefits in a range of ways. A 2013 study found that practising mindfulness reduced the chances of university students skipping meals or over-eating, for example.
A review of academic literature on the subject in 2019, concluded that: “it has been suggested that mindfulness can be used to change consumption habits. Indeed, the scope of mindful consumption is quite broad. In terms of consumer wellbeing, it can cover health and addiction, family matters, financial wellbeing and materialism.”
At its essence, mindful spending is about being more aware of not just what we are spending on, but where you are, how we are feeling, and what might be influencing those emotions when we pull out the credit card.
And there are five easy ways to do this:
1. Your best and worst
Write down the best and worst purchases you have made over the past year. Then take a few minutes to think about each one.
How did you come across the items you bought? Where were you and how were you feeling when you bought them? Why did you think you needed them?
Just this simple exercise can help us to reflect on what might influence our spending – our mood, our desire to make a certain impression, or maybe even just boredom. This is a good starting point to understand what might influence our behaviour in the future.
2. Pause
The next time you are about to make a purchase, give yourself a five minute time-out. Take a moment to reflect on how you are feeling, what might be prompting you, and how much you really want or need the item you are buying.
It could even be useful to think a couple of months into the future, and imagine what you will be doing with the item then. Do you still see yourself using it?
3. Have a wish list
Being more intentional in your spending does not mean you shouldn’t be able to buy things you want. It is rather about being more deliberate about identifying what will really add value to your wellbeing.
Having a wish list is a good way of doing this. Write down a few things you really want, and focus on saving up to buy those. This gives you a goal, rather than impulsively buying other things that may ultimately mean you don’t have the money to get the things that would actually enhance your wellbeing.
4. No-spend challenge
Set a day in your diary to spend no money at all. To start with, do this once a month. Then reduce it to once a fortnight, and once a week.
This simple exercise has two benefits. The first is to change your mindset simply by proving to yourself that it is possible to go for a time without buying anything.
Secondly, it helps to reframe your priorities. What are the other things you might find to do to find fulfilment or pleasure on these days that don’t involve spending any money?
5. Reflect
Every few months, go through your credit card statement and think back on items you have bought. Which of them are still adding value to you, and which have you perhaps already forgotten about?
Take a moment to consider where you were, what you were feeling, and what was happening when you made those purchases that you are no longer using. Are there triggers or patterns that you can identify that you can be aware of in future?
Being more aware of these influences will help you to be more thoughtful about your spending in future. And, ultimately, it will help you to develop a much more healthy relationship with your money.
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