- Date : 08/04/2021
- Read: 4 mins
Spending money is a way of life. Read on to know you can mould this habit into a positive lifestyle that can help you grow your money.
The year that went by taught us the true meaning of mindful living. Even as 2020 came under the dreadful shadow of COVID-19, it taught us to live and spend more cautiously. In a survey by Shopify, 88% of Indians admitted that the pandemic changed their purchasing patterns. Why? Healthy financial habits stem from both financial stability and mindful spending. If you haven’t made a change in your spending habits yet, start now. Use the following systematic approach to build better spending habits that will benefit your financial soundness in the long run.
1. Commit to a budget
The first step towards making a conscious change in your spending habits is to set a budget for yourself. Knowing how much you earn versus how much money you can spend and save is the foundation for financial success. A written budget is a tool that will help you review your goals if you are tempted to splurge. Review this budget regularly, say once a month, to ensure you don’t spend on unnecessary things. If you have a problem maintaining a journal, tools like PocketGuard and Mint can help you automatically categorise expenses and set limits accordingly.
Related: Men vs Women: Spending habits
2. Spend wisely
Another good change you can bring about in your finances is to spend with a purpose. This is also known as ‘conscious spending’. Once you begin to follow a more deliberate method of living, you will be left with more money at the end of the month. Being a conscious spender will help you be more prudent with your decisions, even if they are necessities. For instance, after making monthly payments for rent, utilities, groceries, and electricity, write down the amount spent. The simple act of writing expenditures will make you more conscious of your goals.
3. Avoid impulse shopping
One of the tougher things to do is to resist spending triggers. Impulsive buying does not imply you avoid making expensive purchases on salary day; it also means making small adjustments to your daily life. These small changes in your spending will accumulate to become a large reward in the long run. So save money by cooking at home, reusing leftovers, and even repurposing old clothes. Plan your expenditures; this will help you splurge guilt-free once in a while. Opt for a zero-waste lifestyle, where everything you invest in serves a purpose and lasts for years.
4. Be accountable
It is easy to get distracted when you are not accountable for your spending habits. Choose a significant other – parent, spouse, or even a friend – to help you keep a tab on your expenditures. Having someone who can handhold you through this journey, especially in the early years, will help you keep things in check. Based on your income, plan how much you need to spend each month and set aside an amount as savings. Plan well ahead for large expenditures (say, an overseas vacation) and contingencies. Gradually, you will have a better understanding of your money and when you do splurge occasionally, it will not eat into your savings.
5. Save when you shop
Being a frugal shopper does not always mean buying below-par or cheap items. When you adopt a more mindful lifestyle, you find ways to pay less for the same items or make an informed decision of not buying everything at the same time. Watch out for sales where you can buy the same products at a discounted rate. Collect coupons and exchange them for a large purchase to enjoy a discounted value over and above the actual price. Another great way to save money is to develop the habit of comparing prices before making a purchase.
When you put good spending habits into action, you are eventually directing yourself to make smart money choices. While many believe that working towards increasing your income and making big saving decisions are the only way to grow one’s money, the truth is that small lifestyle changes can also make a big difference. For a dose of inspiration, look at these frugal money habits the world’s richest women swear by.