Every day we handle money. We make a choice to buy lunch or brown bag it. To stop at Starbucks or make coffee at home. To go out for dinner and drinks with friends or spend a quiet evening at home. These seemingly small, inconsequential decisions are often made without much thought, which is how most of us get ourselves into trouble. Too much mindless spending adds up quickly.


Is Your Spending Out of Alignment?

Beyond mindless spending, you also have emotional spending to consider as well. We buy things because we are mad, sad and glad. The best way to avoid letting our emotions or mindless spending take control is to have something to weigh them against. For me, it means having goals that I am highly motivated to achieve.

Now I can stop and ask myself: “Will this bring me closer or further away from my goal? Or am I feeding an emotion?”

These two simple questions have saved me numerous times from spending my money unwisely to satisfy an emotional need or to avoid mindless spending.

Neither are a good habit to form, but there a few steps you can take to help you spend your money wisely.

#1: Have Written Goals

Your best defense against emotional and mindless spending is having goals. Without goals, you have nothing to stop you from saying “yes” to everything you want.

The key is to make sure these goals are authentic, and you are highly motivated to achieve them.

As mentioned in an earlier post, we get caught up in what people expect us to do and have. We create goals around other people’s expectations, rather than what we truly want.

Sometimes we don’t even realize we do this. So take the time to figure out what you truly want, then write it down. Don’t be vague and just say buy a home or retire.

Be specific.

Your goals need to be real to you, so you have the proper motivation to achieve them and stay true to them in face of temptation.

If you find yourself unmotivated by your goals, then dig a bit deeper.

Are these really your goals?

Or were you playing it too safe?

People struggle to save money for the things they do not really want.


#2: Have a Plan to Achieve Goals

Knowing what you want is important, but it alone is not enough. You have to take action. And in order to take the right actions, you need a plan.

Things to consider:

  • What is your timeframe? You need to know how much money you need to achieve your goal and knowing your timeframe is critical to figuring out that number.
  • How does it fit into your budget? Now that you know the amount you need to save, does it slide right into your budget or do you need to make some changes?
  • How will you grow/earn money for your goals? For short-term goals, such as a vacation, simply saving money and putting it into your savings account may suffice. But for long-term goals, such as a home downpayment or retirement, you need to exponentially grow your money, which generally means you will need to invest it. There are a wide variety of investment options available and you need to consider your risk tolerance and timeframe when you select which option(s) are the most appropriate for you. You may also want to consider working with a financial advisor for some additional guidance.

This is the step where most people stumble. They figure out what they want, then do nothing. It’s highly unlikely you will achieve your goals without a plan. Your goals give you purpose and help combat emotional and mindless spending. Your plan puts your money to work for you. Goals and planning go hand-in-hand.

#3: Review and Adjust Your Goals and Plan Regularly

Once you have your goals and plan in place, you need to review them regularly. Over time, your goals may change. When my husband and I first got married, we did not plan on becoming parents. Our feelings eventually changed, and we feel very blessed to have two wonderful daughters today.

Subsequently, some, but not all, of our goals changed.

Goals are fluid. Some will never change while others will continue to evolve over time.

As goals change, you may need to recalibrate your plan as well. You also need to make sure you are still on track to achieve your goals within your chosen timeframe and make any needed adjustments. I recommend reviewing your goals and plans once or twice a year.

Saving and Spending in Perfect Harmony with Your Goals

This is the sweet spot. You know what you want and are actively working towards achieving your goals. You spend with joy because you are confident that you are spending it wisely on the things you want, rather than mindlessly or emotionally. This is a great life to live and one that is possible for everyone.