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Spending Intentionally: How to Save Money By Spending on What Matters Most to You

Money
BY: Courtney Johnston
January 30, 2021
Intentional spending is a topic that is talked about often but not always fully understood. This topic has become a catchphrase in many financial spaces because it sounds exciting and purposeful. But when you boil it down, intentional spending is you choosing to focus on what matters most in your life, while pushing the rest of the noise aside.
The benefits can be tremendous, from improving your financial health to even boosting your overall happiness and satisfaction. But how exactly does intentional spending work and is it the right strategy for your financial goals?
If you’ve ever wondered about intentional spending or thought this money philosophy might enrich your life, I’ll walk you through everything you need to know about this hot money trend.
  • What is intentional spending?
  • How intentional spending can help save you money
  • Steps to become an intentional spender
    • Step 1: Define your values
    • Step 2: Create value-driven money goals
    • Step 3: Analyze your budget
    • Step 4: Practice intentional spending
  • Additional tips for an intentional lifestyle
    • Remove the temptation of credit cards
    • Balance your goals
    • Focus on what you’re gaining, not what you’re losing
    • Don’t worry about perfection
  • The bottom line

What is intentional spending?

Intentional spending refers to spending your money consciously. When you focus on spending intentionally, you’re deciding where your money should go and what items, services, or experiences bring the most joy and value to your life.
Also termed as behavioral spending, intentional spending is a tenant of the economics of happiness. This branch of economics looks at the impact of money on our happiness and well-being. Economists have found that having more money doesn’t correlate directly with improved happiness, though spending intentionally can boost the way you feel about your finances.
In many ways, intentional spending can feel counterintuitive to the way society often tells us we should spend money. For example, if taking care of the environment is a core value of yours, you might opt not to spend money on a new car, instead of utilizing rideshare services, public transportation, biking, or walking to get from place to place.
The main purpose of intentional spending is to enrich your life by allowing your money to bring you closer to what matters most to you.

How intentional spending can help save you money

The premise of intentional spending is not to aggressively save (unless savings and security are major values of yours), but saving money tends to be a natural side effect of this spending strategy.
Here are some ways intentional spending can help you save more:
  • When you buy consciously, you become more aware of how much you’re spending. Overspending happens most often when we’re unaware of where our money is going, but when you commit to spending intentionally, overspending tends to be less of a problem, since we’re in tune with our spending decisions.
  • By only buying items that match your values, you’ll organically save more money. Intentional spending can help curb impulse buying. You’ll often feel less of an urge to buy items or services “in the moment” when you’ve committed to being a more self-aware spender.
  • You’ll waste less and use more of what you have. Conscious spenders are also aware of whether they need products or services before buying them. This awareness tends to encourage them to use the items they’ve already invested in before purchasing another, which limits overspending and helps you save more.
  • Values-driven savings goals can be more motivating. If you’ve set up specific savings goals that align with your values, you’ll likely find it’s much easier and more satisfying to save for these goals and watch your money accumulate.

Steps to become an intentional spender

If intentional spending sounds intriguing to you, it’s pretty easy to get started, no matter where you are in your financial journey. Follow these steps to help commit to more conscious spending habits.

Step 1: Define your values

First, you’ll want to figure out what’s most important to you. I recommend creating a list or digital document where you can catalog everything that matters most to you. Some people tend to think more granularly than others, so don’t worry if your list has 100 words or only a few.
Once you have your list, try to find themes that these items have in common. For instance, writing things like “going out with friends.” “vacations,” and “movie nights” might help you uncover that your time spent with family and friends is what you find most valuable. Really think about the items you’ve written down to determine if it’s the actual event (i.e. vacation) or the experience and connection that you value most.
There are no wrong answers here. Your values won’t necessarily match someone else’s. Some might find travel and experiencing new cultures and food to be more enriching than spending time in their own city. Others might prefer building local connections or growing their faith to be most important.
If you’re struggling to define your values, here are some provocative questions that can help:
  • What was I doing the last time I felt really happy? Who was I with? What was I feeling?
  • If I had to live with less money, what experiences, items, or services would keep me content?
  • If money wasn’t an issue, what would I really want to be doing with my time?
Having more than one answer to these questions is perfectly normal. It just means that you have multiple values and priorities.

Step 2: Create value-driven money goals

Now that you have your list of values, it’s time to connect them to money goals, so you can upgrade your spending and savings habits. You’ll likely have a mix of short-term and long-term goals, and these goals might change and evolve over time.
For example, if you love animals and are vegetarian, you might decide that donating to local animal shelters, supporting causes that advocate for animal rights, and only buying vegan and cruelty-free products are short-term goals. Long term goals might include saving for a home on land that can support animal rescue or creating a business selling cruelty-free products. Or, you might find your long term goals are more focused on a different value.
You can really go wild with this exercise and might find the need to reign in some of your ideas. List out all of your savings and spending goals and then decide which ones are most important to your life right now or even which ones are the most doable for your current financial situation.
The important part is to connect each goal to a value. Paying for your child’s college tuition might connect to your family values while planning for retirement might satisfy your desire for security. Whatever goals you set, keep them top of mind so you can make financial decisions that will make achieving them even easier.

Step 3: Analyze your budget

Now that you know where you want to spend your money, it’s time to take a look at where you’re currently spending your money. I recommend reviewing your current monthly spending by looking at three different categories: necessities, optional expenses, and savings.
First, review all of your necessary bills and expenses. These are items such as:
  • Rent or mortgage payments
  • Loans
  • Debt
  • Utility bills
  • Groceries
  • Insurance
  • Childcare
  • Transit
As you add up these expenses, keep your values in mind. Finding ways to become debt-free by paying down loans and credit card bills might be top of mind. Focusing on these goals first allows you to free up more money to spend on your value-driven goals.
You can also negotiate any services you want to keep but think you may be overpaying for. It’s easy to switch internet or cell phone providers. Considering switching grocery stores if you’re overspending on food. You may even be able to negotiate down some of your debt!
You might also review some expenses and find they contrast with your goals. Maybe you’re overpaying on rent and realize you’re not living in an area or home that aligns with your values. For example, if you’re dedicated to becoming more eco-conscious, you might want to leave your large house for a smaller, less energy-dependent home.
You may make no changes at all as you’re going through this list and that’s perfectly fine! The key is to be aware of how much you’re paying and why you’re paying these bills before moving on.
Next, you’ll want to review your optional expenses. These include:
  • Subscriptions and memberships (beauty boxes, gym memberships, meal delivery services.)
  • Apps
  • Discretionary purchases (clothing, home decor, impulse buys)
  • Dining out and takeout
  • Entertainment (concerts, movies, books, records)
  • Any other optional expense
During this point, you’ll want to really consider whether these purchases are enriching your life and adding to your core values. If living a healthy life is a major focus for you, ordering takeout and going out to eat might not align with your values. If traveling and exploring the outdoors is a passion you want to build, maybe you don’t need to pay for 5+ streaming apps.
You might also find areas where you can eliminate or trim expenses that are easy to cut. For example, that gym membership you thought you canceled years ago or that app you had no idea you were paying for might be quick wins.
The goal isn’t to end all spending that doesn’t align 100% with your values but to reduce it. Sure, new clothes might not match your goals, but investing in new wardrobe pieces once or twice a year, instead of monthly, can help you reduce overspending and clothing waste.
Lastly, you’ll want to review where your current savings dollars are going, if you are saving. If you’re adding money to a savings account, assign goals and categories to these funds (if possible) or additional savings account to help separate your goals. This allows you to separate your emergency fund from your other savings goals.
If you’re focused on retiring early or planning for your future, revisit how much money is going into your retirement funds and investing accounts.
Ultimately, you want to know how much money is coming into your account each month and how much is coming out. Make sure to reroute your spending so it matches up with your value goals.

Step 4: Practice intentional spending

Now it’s time to put your new budget into practice. Some people prefer a rigid budget where they track every dollar spent, while others prefer to follow a looser model. I highly recommend following whichever method gets you most excited about your new spending and savings goals.
When practicing intentional spending, be sure to ask yourself how a purchase feels. For instance, you might believe strongly in building up your community and decide to frequent local restaurants is an important goal to help the small businesses around you. Yet, when we spend repeatedly on experiences, they can lose their allure. Going out to eat every night doesn’t feel quite as special as going out for a date night once a week. It’s important to weigh how purchases are making you feel so you can decide if cutting back can help you stay aligned with all of your goals.
Some weeks might look different than others. Maybe you decide you and your spouse have had stressful workdays and going out to eat is helping you connect and communicate. Other weeks, you might enjoy cooking from home and planning your special date night. As long as you’re intentional about why you’re spending your money and being honest about the value it’s bringing to your life, you’ll be able to stay on track.

Additional tips for an intentional lifestyle

Remove the temptation of credit cards

Adopting a new lifestyle can be challenging, even if you go into the situation with the best intentions. Knowing your triggers can help you alleviate the temptation to fall off of your new budget and back into bad habits.
If you know you’re tempted to impulse buy when you’re stressed, get rid of your physical credit cards and delete your payment information from your computer. Commit to only paying for purchases with cash or what’s in your bank account. This can make impulse buys feel much riskier.

Balance your goals

It might take some time to fully transition into an intentional spending lifestyle. During this period of adjustment, depriving yourself of spending money completely can easily backfire. Spending intentionally is about enjoying how you spend your money, and if it doesn’t feel fun, you’re less likely to stick with it.
Saving for long term goals is important, but honoring your values now is also essential. If you enjoy walking to your local coffee shop every weekday for a latte, don’t punish yourself by refraining from an activity that brings you joy. Go get your coffee, but maybe skip the scone. Or, some days, opt for a regular coffee instead of a flavored latte. Not only will this help you save a little each day, but it will also allow you to savor the days when you do splurge a little bit more.
Be frugal where you can, but don’t completely limit yourself. Balance is key in personal finance, especially when trying to stick to a budgeting method.

Focus on what you’re gaining, not what you’re losing

Intentional spending is a way to help you enjoy your life by cutting out anything that isn’t serving your values and incorporating experiences that are. Thinking of money as physical cash can limit your view of your finances. Instead, picture your money as the experiences you can have and the memories you can create.
Flying your entire family to Florida for a week-long vacation at a resort can be expensive. If you’re focused more on spending time with family, why not rent a lake house instead and enjoy barbecues, game nights, and days on the water? Instead of perceiving a shift in vacation setting as a loss, think about what you’re gaining. You’ll have more time to relax, more money to do creative activities, and more time spent together, rather than waiting in lines or driving to restaurants.

Don’t worry about perfection

Living intentionally sounds like an ideal way to navigate life, but you’ll never get it right 100% of the time. Sometimes you’ll splurge on a designer bag or new experience that doesn’t fit into your budget or really align with your values.
Don’t panic when this happens (and it will). Instead, think about the purchase you made. Did you experience buyers’ remorse? Did it add value to your life? Was there another way this money could have been spent?
You should ask yourself these questions so that the next time you’re tempted to splurge on anything that’s not serving your life, you’ll be able to think back on these examples. The key is not to feel guilty. We’re all human and we all struggle to stay on track financially.

The bottom line

Ultimately, intentional spending is about bringing happiness and value to your purchases. If a closet full of clothes brings you the most joy, find ways to spend less while still building up your wardrobe. If traveling around the world is the most fulfilling experience for you, funnel your money into travel goals.
There’s no wrong way to spend your money, but intentional spending can help you save more for what matters most to you in a way that’s intuitive, non-restrictive, and enjoyable.

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