Do You Practice Conscious Spending? I Learned How -- and You Can Too.

Dollars & Sense on 03.01.12
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Photo: Jeff Belmonte

In my 20s, I used to act on instinct, impulse, emotion. I used to feed the emptiness inside with food, drink, shopping, and entertainment. I wanted to feel full, warm, loved -- and I grabbed at anything that would do that for me.

Now -- with a life companion, children, and a career I love -- I feel blessedly whole. Finding purpose in my life has made me a hugely better person, and I have the strength (most of the time) to resist temptation.

It's not like my husband and I put all our money into the mortgage and mutual funds. We have plenty of fun. We choose to live in an expensive part of the country, we buy chandeliers for our old house, and we take our kids to see Broadway shows.

According to personal finance expert J.D. Roth of Get Rich Slowly:

The heart of frugality is choosing to spend on the things that are important to you while cutting back ruthlessly on the things that aren’t.

Or as Ramit Sethi of I Will Teach You to Be Rich puts it: If you know exactly what you are spending, you can spend extravagantly on the things you value.

For example, we save money by driving used cars, dressing our kids in free clothes, and eating almost every meal at home. But because we are on track with the house and retirement, we occasionally spend on something fun -- whether it's a vacation, an antique, or a computer.

Maybe you love clothes, or gadgets, or going out to eat -- you can have those things and not feel guilty if you have these things too:

1.  Goals

If you plan on living longer than tomorrow, you already have goals. The key is bringing them into focus. If you want to change jobs, take time off to travel, move to a bigger place, or build a nest egg, write it down, talk about it, figure out what you need.

2.  A Basic Plan

Don't worry, it doesn't have to be complicated. In fact, one of the easiest ways to fuel your financial goals is to set aside money at the beginning of the month or have it automatically deducted from your paycheck. Instead of worrying about bugeting for each category, just write down everything else you spend.

3.  Consciousness

Stopping ourselves from spending can be tough, because we sometimes have to fight against our strongest urges for satisfaction, love, order, status. One way I got over a self-destructive eating disorder was to ask myself during a crisis, Why am I doing this? What am I feeling? What am I looking for?

This process of asking yourself why (understanding) when you are tempted to buy something (behavior) is the basis of cognitive-behavioral therapy. I'm a big believer in the idea that identifying the problem is half the fight.

Conscious spending is deciding how you want to spend your money. It's not saying, "Money comes, money goes." And it's not depriving yourself of everything expensive or pleasureful. It's planning for the future, then living in the present.

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