Becoming Financially Savvy: Tips for Big Spenders
October 24, 2019
There’s nothing wrong with being a big spender—unless you’re living above your means and are unable to make good on your other financial obligations. Keeping an eye on how much of your money is being funneled into more frivolous habits is a great way to maintain the lifestyle you desire while also having whatever funds are necessary to pay your bills, mortgage/rent, utilities, etc.
We’ve collected a few tips for big spenders who are looking to become a little more financially savvy so you can use your money as you please without breaking the bank.
Get a pulse on your money mindset
Your “money mindset” is just a way to describe how you relate personally to all things concerning money and finance. This includes your income, financial goals, spending habits, saving, and more. Thinking about your money mindset is a way to check in with yourself about what you’re doing well, places you could improve in your financial life, and how much your spending relative to how much you’re making.
How you relate to money could be playing a huge roll in your spending habits. For example, it’s not uncommon for people who receive a pay raise to experience lifestyle inflation—that is, increasing one’s spending because they have a higher income.
Before making changes to your spending habits, consider making efforts to understand why you make the choices that you do and how you relate to your income.
Here are some questions to consider that might help your thought process:
- Are you happy with your income? If not, how would you like for it to change?
- How much are you spending each month relative to your income?
- Do you have a budget? Do you follow your budget?
Personal finance can be difficult simply because of the volume of figures and payments there are to keep track of. Working towards a more positive money mindset can help lessen these stressors by giving you more control and discipline when thinking about your personal finances.
Make room in your budget for fun
Your budget is not just for necessities—it should be a reflection of how you need and want to spend your money. This includes your big spender habits. If you’re the type of person to spend large amounts of money on impulse, take a moment to think about what you want and keep a list. Set a timeline for how soon you’d like to acquire these items and make a plan for achieving this goal while also staying within your means.
Giving yourself time to think deeply about each purchase can help lessen the allure of impulse purchases. This will help you from joining the average U.S. consumer who spends up to $5,400 per year ($450 per month) on impulse purchases.
It might also help to break up your spending habits by category.
- Experiences (food, travel, etc.) — If you’re a foodie or an avid traveler, planning might be a great way to get excited about a new restaurant or location. Planning will allow you to stay abreast of any seasonal offerings or attractions. A well-considered itinerary will also help if you’re hoping to avoid hours of high population and/or wait times at your intended location or restaurant.
Being organized doesn’t mean your experiences are less fun. Contrarily, you might be able to create more experiences because your research will illuminate what is affordable.
- Items (clothes, electronic gadgets, appliances) — If you’re the type of person who likes to acquire things, survey the list of wanted-items you’ve made and prioritize which item is more important to you. Keep in mind, some items are designed to have a shorter lifespan (planned obsolescence) so that you’ll be primed to purchase the newest iteration of their product. With this in mind, it might be a financially savvy decision, if you’re comfortable with it, to consider seeking out the same product gently used or refurbished.
How do I balance spending and saving money?
Being a big spender offers challenges just like being frugal might. The easy and simplest fix might be to tell yourself that you’re going to stop spending money. Realistically, there’s a chance this might not work for you.
The goal is to reach a sustainable balance that honors how you like to spend your money and where you need to spend money. Gradual changes, like setting a sending limit or picking up a side hustle can help with your big spending habits so you can continue to treat yourself within your means.
You are the most important consideration. Think about your spending habits in a personal way. Maybe you need to start considering how to stop spending so much money? Maybe you hope to prioritize increasing your income to afford your spending habits? Whatever you decide is up to you because it’s your money.
Need a little help with your personal finance journey?
We’ve got you covered. Take a look at this post about habits to get your finances and life on track.
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