Spend Consciously, Live Richly
Posted on February 16th, 2011
Conscious spending is one of those buzz words you hear a lot lately in personal finance columns. I first read about the idea a few months ago in Kimberly Palmer’s book, Generation Earn. In case you haven’t heard about it, it’s the theory that money should be spent and enjoyed—just in a way that reflects your values and priorities. No need to spend less—just spend better!
That means with the cash you have left over after covering your essentials, you can get the $200 jeans, spend $2,000 on a Carribean trip with your buddies, or get a $100 hair cut. It all depends on your priorities. Here’s an example: if travel is your top priority, you may spend lots more on trips and live in a house with 3 housemates to save on rent. If you’re a foodie, you might drop a chunk of money on nice dinners out a few times a week, but not spend much on clothes. Brilliant, right?
Give this 10-minute exercise a go:
STEP 1: Write down your average monthly discretionary expenses. If you go out to lunch every day, add up what that costs you per month. Include clothes, beauty, travel, music, going out—all of the “non-essential” purchases you tend to make. STEP 2: Put them in order of priority. Which, of all the purchases on your list, is most important to you at this point in your life? Which is the least important? Take a look at the types of things that are at the top of the list, and those that fall at the bottom. That should give you a better sense of what’s really important to you. STEP 3: Vow to spend consciously over the next month. Then consciously spend in line with your priorities over the next month; cutting out items that may be low on your list and putting those funds toward whatever is at the top. That means I will be bringing my lunch and making coffee at home, and spending more on travel and live music.
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Tags: Spend, Spend Consciously
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