How often do you get to the end of the month and realize that you just don’t have enough money to do all the things you want to do? Maybe you’re even running a deficit for the month because you had more bills than you had income.
If you want to break the cycle, the first thing you need to do is check to see if you spend according to your priorities. There is a good chance that you aren’t using your money in a way that fits with what’s most important — and that could be leading to dissatisfaction with your budget and your financial situation.
The first step to restructuring your budget to spend according to your priorities is to pay attention to the way you currently use your money. In our society, it’s easy to just spend money without thinking about it. You can easily toss something in your shopping cart and then whip out the plastic to pay for it. Budgeting apps keep track of what you’ve already spent automatically, but connecting to your bank account, but you don’t have any personal contact with what’s happening with your money.
If you want to get out of the spending rut, you need to be aware of where your money is going. Before you place something in your shopping cart, stop and ask yourself this question:
WHY am I buying this?
Just pausing to ask yourself why can make a big difference in your spending. Will your purchase help you reach your goals? Is it something you need? Will you really use it a great deal? Be honest. Will you even actually want in two months? Or will it likely end up in the back of a cupboard or neglected in the basement?
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When I first began asking myself why I bought things, I realized that many of my purchases were impulse purchases or were items bought without thinking because I had a vague idea that they “might be nice to have.”
At the end, I realized that I had a home full of knick-knacks I didn’t care about, and that the total I’d spent on these items probably would have been enough for me to go on a trip on the other side of the world. Because I really value experiences over things, I realized that part of my dissatisfaction with my life was due to the fact that my spending didn’t line up with my priorities.
Fund Your Priorities First
If you want to stop spending on things that don’t matter, figure out what’s most important to you. My priorities look like this:
- Take care of my needs and my son’s needs (food, shelter, clothing, health)
- Contribute to retirement and to an emergency fund
- Donate to charity/help in my community
After getting down to what really matters to me, it’s easier to make spending decisions and say no to the things that don’t help me reach my goals or my line up with my priorities. I have my finances automated so that recurring items, like insurance premiums and my rent payment are automatically paid each month. My retirement and emergency fund contributions are also automated. Even my charitable contributions (including tithing to my church) are set up using automatic bill pay. I recently started a travel fund that I make sure is funded as well.
If all those things are taken care of, and I have extra money left over, then I spend on things like eating out or buying something for the house. Even though I might not always get to go to the movies each month, I don’t worry about it because I remind myself that it’s not my highest priority. I’ve got healthy meals for my son and me, and we’re preparing for a major trip next year.
When I remind myself that now my spending matches up with what matters, suddenly that tortilla press or those shoes on sale at the store don’t seem so tempting. Pay attention to where you spend, and decide whether it matches with your values. If it doesn’t start taking items out of your cart and putting them back on shelves. You’ll be surprised at how your outlook changes when you spend according to your priorities.