Thinking About Spending

When we think about our goals for the future it sometimes feels like there is so much time between now and then that we can afford a few simple pleasures along the way without putting a big dent in our financial plans. While in theory there is no problem with having a bit of fun now and then, in practice it can be much harder to keep a lid on frivolous spending once it begins to take on habit-like tendencies.

I certainly don’t want to be the one to say “don’t do anything fun” to anyone. I enjoy shiny new things just as much as the next person. But I also realize that the joy that I get from binge spending is very short lived and can often be followed by some forms of mild depression. Not only does the thrill of the newness wear off quickly but all that spending can affect your future decisions for a quite a while if it isn’t reigned in rather quickly. I just read a great article on The Simple Dollar (One of my favorite daily blogs) called The Decision Spiral that explains very well how bad decisions limit your options, while also making your next bad decision worse than it would have otherwise been on its own.

Now it would be pretty much impossible for someone to entirely eliminate bad decisions from their life. However we can try to limit their effect and scope. When it comes to overcoming the urge to buy something immediately I find that it helps to focus on something bigger that I would like to have. I try to think of something that will take a long time to get and think about how much longer it will be if I buy a second beer at the bar tonight. This helps a little bit but most times that one extra little thing doesn’t seem to make a difference and I go for it anyway.

What really helps when dealing with consumption habits is the mindset you cultivate on a daily basis when you are not in a spending position. It is much easier to be mindful of goals and come up with neat plans about early retirement when you are safely tucked into your bed. But when the bartender and your friends are all staring at you expectantly it’s a different story.

The key is to build habits that you can be happy with and that get you to where you want to be while also knowing in advance about times you will be letting loose a little. This way you can consider financial boundaries at a time when you are clear headed rather than under some form of sales pressure (which doesn’t always come from sales people). When it comes to my spending habit I actually mean my non-spending habit. When I spend money it is usually on something that I’ve bought before. In fact most of my spending every month is a recurring expense like rent, food or utilities. Even the things I do for fun like climbing at the gym or the twice a week coffee I like to get. Thanks to my spending “routine” over the years I’ve narrowed down when and where money leaves my pocket on a monthly basis and this makes any kind of extraordinary purchase that much more noticeable.

But what about being spontaneous? Doesn’t it all get boring after a while? Well who doesn’t like being spontaneous from time to time? It’s usually fun and exciting and the great part about sticking to your core spending habits is that the benefits of spontaneity can be gotten much more easily. Small things that are out of the ordinary become more fun and since you manage to save more and more as you go, you set yourself up for an increasing amount of awesome, spontaneous events in the future. Forgoing some of that in the early going while you establish a strong foundation for your finances can actually build up to such a large swell of options to choose from you won’t have any other choice but to let go enjoy the ride. The only way to that point though is to start off slow and methodical and build up your spontaneous energy over years of solid spending and saving foundations.

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