Are you the type of person who just spends his money without thinking and then wonders where it all went at the end of the month? That’s a pretty common practice and it is one way to find yourself saddled with debt and bills you can’t afford.
The key to breaking your unhealthy money habits is to become a conscious spender.
According to Ramit Sethi, a conscious spender is someone who spends extravagantly on the things they love, but mercilessly cuts costs on everything else.
Prioritize What Matters Most
No one can afford everything they could possibly desire, at least no one I know can. Life is all about making trade-offs. If you go on a weeklong vacation to Florida then you can’t spend a week in the Bahamas. If you buy a new car you won’t have the money to have an in-ground pool installed in your backyard.
This is why it is so important to prioritize your spending. You need to take a good look in the mirror and decide what is really important to you. What are the things that you just can’t live without (or don’t want to live without) and what are the things you really wouldn’t mind losing.
As a conscious spender you want to spend your money where it has the biggest impact. If you focus spending on things and experiences that bring you a lot of happiness then you won’t need to feel guilty about your spending.
Eliminate All Other Spending
Once you’ve decided what really matters to you then it will be easy to eliminate all the fluff in your budget. If what you really want to do more than anything else is travel and see the world, than you need to consciously decide to allocate a significant chunk of your budget to traveling.
In all likelihood you’ll have to trim back or eliminate spending in other categories but that won’t hurt so much since you’re getting so much enjoyment out of your traveling adventures. After all, who cares if you drive a used car instead of a brand new one…you get to explore the streets of Paris and the Australian Outback!
Don’t Stop Looking For Deals
So you’ve prioritized your spending into categories that really matter to you and you’ve eliminated all the unnecessary fluff in your budget. You now have more money to spend on the things that give you the greatest enjoyment.
That’s great, but don’t stop there!
Related: Always shop with digital coupons
You should also look at saving money on everything that you have prioritized as important so you can get the most bang for your buck. A conscious spender is always looking to maximize his or her spending.
For example, if traveling is your thing then look to get the cheapest flights and hotel stays available rather than paying full price. Also, take a moment to look for alternatives to the mainstream travel methods. Using sites that allow you to rent out homes or condos might be a nicer option than heading to a standard hotel. If you’re a big movie fan who refuses to cancel your cable TV package, at least look for some promotional codes and coupons to save some money.
Are you a conscious spender? What do you buy that brings you the greatest enjoyment?