raise your spending awareness

Raise Your Spending Awareness To Increase Your Net Worth

If you’re like most people, spending money is an almost automatic occurrence. Money comes in…and it goes out…all without a thought. Is it any wonder then that so many people have no idea where their money goes? This lack of spending awareness is one of the reasons that the average american has less than $4,000 in savings while 57% of adults have less than $1,000. Because many people don’t pay attention to their spending they have little to no chance of increasing their net worth. All their money is gone before they know it! One of the quickest ways to reduce stress, get more out of life, and improve your financial position is to raise your spending awareness.

The Power Of Living In The Now

One of the keys to reducing stress and enjoying life more is to live in the moment, becoming aware of what it is that we are doing RIGHT NOW. This is often called mindfulness. Living (and spending) in the moment can have a powerful impact on both your personal and financial life. When you practice mindfulness in your spending, you’ll begin to naturally see where spending isn’t aligning with your priorities and you’ll stop the spending. It doesn’t happen because you have tremendous willpower. It happens because you don’t want to spend the money. Once you’re aware of it, you naturally stop it. If you want to learn more about mindfulness and how to reduce stress there are many books and online resources. Relax Like A Boss is a site with a lot of helpful articles. Amazon also has many books on mindfulness.

Some Preliminaries

Living and spending in the now sounds great, but how exactly do you become more “in the moment” and raise your spending awareness? Well, it just doesn’t happen overnight for most people. Like anything worthwhile it will take some work and a commitment to the process. The amount of work will depend on where you are at when it comes to keeping track of your spending. If you currently have ZERO awareness of where your money goes you’ll have more work to do than someone who tracks every penny.

No matter where you fall on that continuum there are two things you need to have before you start:

  1. Some method for tracking your spending. This could be a simple notepad or it could be something like YNAB, a full-featured cash-flow and spending tracking app (I’ve used it for 4 years).
  2. Knowledge of what your financial priorities/goals are. You need to have an idea of what it is that you’ll be doing with all that money you won’t be spending because of your newfound awareness. Try to come up with some short and long-term goals. These goals should reflect who you are and what you want to accomplish in your life both now and later. The goals shouldn’t all be financial. Make sure to include personal goals as well.

If you want some help with setting up a cash-flow tracking system or defining your your goals, I’d be happy to speak with you, no cost or obligation. Just schedule a time to speak with me and we can talk further about your unique needs.

Raise Your Spending Awareness

Once you have your spending tracking system and goals in place you can begin the process of raising your spending awareness. Start out by knowing what you are spending. Some people think that tracking spending is only for those who have a low income but it applies to everyone, no matter your income or net worth. In fact, I could argue that the more money you make the more you need to track your spending! This is where your cash-flow tracking system comes into play. Record everything you spend and categorize the spending. Next, consciously think about everything you spend, before you spend. Ask yourself questions like this:

  • Is it something you really want?
  • How will this help me reach my goals?
  • Is there some other way to get what I want/need without spending this money?
  • Is this a necessity or not?
  • Would this money be better spent on something else?

There are no “right” or “wrong” answers to these questions. Everyone is different and has different needs, priorities and goals. The questions just help you raise the awareness of your spending. After a while you will find yourself automatically going through your internal checklist, deciding if your spending is in line with your priorities. As your awareness builds, you will find that all of this will happen almost instantly.

What’s the result of this “mindfulness spending”? Well, as you go through the process you will be able to quickly decide if things are out of alignment with your priorities. If so…Bam…Instant savings (and more net worth) because you’ll stop that misaligned spending before it has a chance to detour you from your goals.

That’s the whole key to the idea of financial freedom. It’s not about having bucket loads of money with no purpose. It’s about whatever money you do have doing just what you’d like it to—nothing more, nothing less.

Contact And Connect

If you have any questions about your own situation, or would like an independent second opinion on anything in your financial life, you can contact me or set a time for a no obligation call to discuss things further. If my services might be a match for your needs I’ll let you know. If not, I’ll let you know that as well.

To leave me feedback, comments and suggestions on how I can make this blog better, Just email me at mark@financialclaritypartners.com .

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