This piece is part of my 2016–2026 archive migration. Some original formatting, content, and external links may be missing, changed, or not be optimized.
Spending
There will always be something else to buy and obtain. Why do you think they came up with the new next phone plans to get a new phone every 6–12 months? New ideas and products never cease to come about. Technology never ceases to evolve. There will always be newer versions of practically everything.
Spending money can often feel good. You get something like a temporary “high,” probably because “feel good” endorphins are released; remember, this feeling is often only temporary, though. Many things that people purchase tend to be classified as one of the following: pointless, not worth it, or soon-to-be-outdated. I am not saying that there is not a point to many of the things that we buy, but if we really paused to think more carefully about the things we consume our money on, we will often realize that the purchases aren’t really that important nor do they have long-term value.
So why do we continue to consume things that we don’t really need?
For one, it’s fun.
Second, many of the things we buy add convenience to our life.
Three, some things we simply desire, and there is nothing wrong with having these desires.
Americans LOVE to consume; we enjoy getting the latest phones, the newest and hottest cars, huge houses we often can’t afford, eating out, and engaging in constant entertainment. We are wired to consume, and the advertising industry ensures that we never stop consuming by investing billions of dollars into clever, persuasive, and successful marketing strategies. Since much of society loves to consume, it is easy to get caught in the never-ending cycle of living paycheck-to-paycheck and always consuming more than the income we bring in.
Consumer Syndrome – A passive addiction to spending or having the constant urge to spend money.
If you continue down this route and spend more than you bring in, you will inevitably lead yourself into a mountain of debt. At the end of this read, I list out some applications that can help you track what you are spending; it doesn’t have to be a complicated or tedious process, but tracking each purchase can really help you see where your money is going. Once you know where your money is going, you can then make the necessary changes to your spending habits.
Spend Less Than What You Make
It is entirely OK to spend money. Some people enjoy spending their money on clothes. Some people like spending their money on traveling and others video games. I like to spend my money on food. Whatever you fancy is fine; simply ensure that your spending habits do not negatively affect you. Spending more than you are bringing in is never a wise thing to do; the key to building financial security, comfortability, and wealth is to spend less than what you make. If you track what you spend every month, you will start to build an overflow of money (without even purposefully saving). Start tracking your spending today. It doesn’t take long to notice where your money is really going after you start tracking it.
Plan Your Purchases
If you are about to make a big purchase (e.g., car, computer, gaming system, TV, car, house, etc.), then take the time to think about it and financially plan for it before you jump the gun. Often, we will change our minds about making a purchase if we take time to think about it first. Time is often your best friend with large purchases.
Tip: If you go to the store and find something you really like, wait 48–72 hours (or two weeks) before buying it. If you still desire the item after 48–72 hours, get it – if you can afford it. If you don’t remember or even think about the item after this “thinking” period, then you did not desire to have the item that much in the first place, and it’s probably something you don’t need.
Risk Assessment
Think of the purchases that you plan to make as potential investments. There are many factors you can evaluate when you make purchases. Listed below are a few main ones to consider that will help you save money:
1. Does the purchase have long-term value?
2. What purpose will the purchase serve?
3. How will the purchase benefit me now and in the future?
Of course, you do not have to ask yourself these questions about every purchase you make or are considering, but these questions are good to keep in the back of your mind if you are trying to become more conscientious of your spending habits and truly want to make a change. Many people spend money aimlessly because they do not think about their purchases. It is also easier not to think about your purchases when using any type of card (e.g., credit card, charge card, or debit card). If you make a purchase with cash, you will think a little bit harder about spending your money; the truth is that you tend not to feel the hit as much when you pay with a plastic card versus when you pay with cash.
Budgeting
Here are the pros and cons of budgeting:
Pros
Stay informed of what income is coming in and what income is going out
Keep your finances organized
Spend less
Save more
Track & monitor your spending trends
Notice where you can decrease your spending in different areas
Cons
None
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A budget is helpful for many. At the beginning of every month, list all your expenses, income, and potential spending that you intend to make. Document this budget in a format that works best for you (e.g., phone app, paper, phone, computer, etc.). Once you complete your budget, ensure your budget is in a noticeable and easily accessible place so you can reference it often and keep yourself financially on track for the month.
List of budgeting apps for reference:
YNAB, Goodbudget, EveryDollar, Mint, Personal Capital, Honeydue, PocketGuard, Copilot, Simplifi, Clarity Money, Honeyfi, Zeta, Mvelopes, Daily Budget Original, Fudget
These phone applications will help you keep track of your spending down to the last penny. Some of these apps also give you a categorical pie chart to depict where your money is going in each category. If you aren’t budgeting, start today; this is one of the key ways to build wealth – outside of spending less than you earn.
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This content is for informational purposes only — not professional advice. Consult a qualified professional before making any major decisions.
This content is for informational purposes only — not professional advice. Consult a qualified professional before making any major decisions.