This week’s conversation is about being mindful when it comes to your spending.
Before we embraced frugality, Tim and I were often mindless spenders. We figured things were just dandy because we saved a lot of our take-home pay and contributed a substantial amount to our 401(k) accounts. Other than mortgages on our home and rental property, we had no debt. Anyone looking at our earning/saving/spending back then might think we were doing very well balancing it all out.
Tim was a gadget junkie and was magnetized by the latest and greatest technology. He’d buy a new toy when something shiny caught his eye. Sometimes, he’d shelve it after a few weeks (or days). Tim would justify each purchase with the same logic…”it fits into our budget”.
The thing is, we didn’t have a budget. We just knew our spending fit nicely into the whole picture. But, we wanted to change our picture. Our former lifestyle could only be maintained if our income remained high. As we started learning about early retirement, we opted to change our thinking.
We shifted from tracking every penny we spent to being mindful of every penny we spent.
What does mindful spending mean?
What do I mean by spending mindfully? THINKING before buying anything. Yes, ANYTHING.
There’s a dangerous mindset I encounter constantly, from family to strangers. Tim and I have been guilty of it ourselves thousands of times. “It’s just $5 for lunch”. “These shoes are only $40. I need to buy them.” “It’s just $300 to upgrade my phone.”
When I was fresh out of college in my first salaried job, I had a rule of thumb when I saw an item of clothing I wanted. If it was no more than thirty bucks, I’d buy it without hesitation. It’s just $30, no big deal.
Two consequences when you’re not mindful about those sneaky items:
- Those purchase add up over time. A regular latte habit? It counts, even if you’re buying it from the gas station. It would be best to save that money but it also lowers your annual spending which is not to be underestimated.
- If you’re not paying attention to what you’re spending, you’re probably spending too much. So what? For every hour you work, you are trading an hour of your precious and limited time. Have you ever had a conversation with friends whether (or not) you would continue to work if you were to win a big lottery jackpot? If you would stay in your current job with all the money in the world, it’s wonderful that you derive so much enjoyment from your work. However, what if your employment situation changes tomorrow? We believe there is value for everyone when it comes to thinking before you spend. If you’d ditch your 9-to-5 job immediately after a huge financial windfall, be mindful of where your money is going and let’s see if we can get you to freedom earlier!
I gave two of our examples, but there are hundreds I could have listed from our old life. A few of them still occur now. We’re all a work in progress!
Be mindful about these questions when faced with any spending:
Do I need this in my life right now?
Can I do without it?
Where can you be more mindful of your spending?