Fact: we make roughly 200 decisions a day on just food alone, so it’s astounding how many choices we’re faced with when it comes to spending money. On a daily basis, what you buy might be informed by complex decision-making at work on a subconscious level. So, how can you go about identifying your “good” spending habits, or purchases you make that add verve and value to your life, and “bad” spending habits that you might regret or make you feel as if you’re taking a few steps backward? Here are some questions to help you sort out your good spending habits from the bad ones.
Is it aligned with what’s important to you?
Financial freedom isn’t just about saving—spending money on goods and services you value has the ability to enhance your life. Conversely, it can be really easy to spend on things we don’t care about simply out of convenience or pure habit. For instance, while the health-conscious side of you wants to shop at the health food market downtown, you might be embarrassed to find that you spend quite a bit at the liquor store around the corner just because it’s right there.
Are you buying something merely to keep up with your friends? Or to settle an internal battle of “compare and despair”? It’s really easy to pretend that what you spend money on aligns with what matters to you. To start, if you have an account with Simple, you can take a good, honest look at where you money is really going by using reports.
To make sure your long-term goals aren’t being eaten up by the little things, Simple accounts allow you to set Goals to save for the things that will bring you immense joy, and help you create the life you want.
Is it helping you build wealth?
Sometimes spending on things that up your wealth can be unpleasant or not feel very exciting. For instance, saving up for some equipment to level up with your business, or to put toward your student loans instead of saving for an adventure feels like you’re entering snoozeville. But down the line, you’ll have the funds to help you build your wealth-building army. After all, having a well-oiled machine in place to potentially make money without too much effort is pretty amazing.
Envisioning your future can also help you save for things you aren’t initially pumped about. What do you and your significant other want your life to be like in five years? What about in 10?
Does it make you happy?
While some purchases may give you a quick thrill, there are some things you spend your money on that spark happiness. Oftentimes impulse buys to boost your mood will psych you out by giving you a quick rush, then have you feeling a tinge of remorse. Instead, take a step back to see if it’s something you really want to spend your money on. Is this purchase going to give you the temporary feels, or will it add to your overall well-being? Sometimes, giving yourself some breathing room rather than making an impulsive purchase will help you gain some clarity.
And what makes someone truly happy can be entirely different from one person to the next. If you’re a collector of curios, and buying items to showcase your gift for scouting rare trinkets is what makes you tick, more power to you. If you’re into outdoor adventures and traveling, then an amazing backpacking trip may be the cure for your itchy feet.
Taking a close look at what you buy to see if it’s in step with your values and goals for the long run will help you pinpoint the good spending habits from the bad ones. By being honest with what you genuinely love—no matter how off the grid it may be—you’ll be able to focus on spending on the things that are essential to your happiness.
Disclaimer: Hey! Welcome to our disclaimer. Here’s what you need to know to safely consume this blog post: Any outbound links in this post will take you away from Simple.com, to external sites in the wilds of the internet; neither Simple nor The Bancorp Bank, our partner bank, endorses any linked-to websites; and we didn’t pay/barter with/bribe anyone to appear in this post. And as much as we wish we could control the cost of things, any prices in this article are just estimates. Actual prices are up to retailers, manufacturers, and other people who’ve been granted magical powers over digits and dollar signs.