I’ve always been a spender. From the moment I started earning money, I’ve spent as much as I earned. When I was earning less, say when I was in graduate school, I tightened up my budget and made it work. When I started to earn more, I justified those extra purchases that I couldn’t make work in the tighter days, and all that money was drained by the time my next check came around.
I realized I had done the same thing for as long as I could remember. When I started earning my first paycheck teaching swimming lessons at fifteen, I spent that little bit on trips to the local coffee shop and Target. Then, when the summer came around and I had more time to work and started earning bigger checks, I blew those on clothes and shoes. I always had a savings account, but I looked at that as something I would do in the future, when I would be making more money. The problem is, when that day came and I did make more money, my mindset was still the same and my spending/saving habits didn’t change.
Eventually, I started getting interested in finance and how other people seemed to be fighting their evolutionary tendencies to spend money “fight or flight” style, and actually save to buy a house, go back to school, etc. I kept hearing and reading the advice to make your spending match your priorities. That idea resonated with me, because I knew somewhere in my heart and brain that I did actually care more about saving for my future than buying that dress that was on sale. But making your money match your priorities is easier said than done. It requires a lot of thought, discipline, and honest tracking. So, here are the steps I took to make it happen for me.
1. Figured out what my priorities actually are.
Setting financial goals has always scared me because I tell myself that I don’t make enough money to reach them. I decided to get over that justification by telling myself that these can be long-term goals, and therefore I can start small. Additionally, I decided to make these priorities both short term and long term. So, what do I want to prioritize spending on now as well as what do I want to save for down the line? For my short term priorities, I decided that I am willing to prioritize my health by spending on exercise classes that I love as long as I actually use them, and on some organic food. However, expensive drinks and beauty products do not fall under my high priority list in the short term. Long term, I set my sights on saving in order to have an emergency fund to give me peace of mind, and also to set aside some money to go back to school and get my Ph.D. Looking at these priorities side by side helped to remind me of what I already did know, which was that I care more about being able to go back to school than I do about mindlessly buying things.
2. Tracked my spending, and then got real with it.
I’ve been tracking my spending for years on Mint. It helped me make a budget when I was in graduate school and money was tight. But, whenever that email came around saying “Where your money went this month,” I would cringe and avoid opening it. I knew I spent too much on clothes, and suspected I spent too much on going out to eat and who knows what else. When I finally set out to do this, I took on the painful task of looking at the past few months of spending trends to see where my money was really going. I learned that I was spending more on clothes than on groceries. That doesn’t align with what my priorities are at all. But even on groceries, I was spending more than double what I had previously set as my budget. I knew I was wasting tons of food by batch cooking large amounts of recipes and not finishing the leftovers. Again, a mismatch of priorities that, once confronted, I could easily change.
3. Chose a mantra.
For me, this is, “Saving for later is more important than having this here and now.” As well as, “You have enough. This will not bring you true happiness.” These mantras help me to rationalize with my instinctive brain that wants to spend on things that don’t align with my priorities. It can also be helpful to mentally revisit that list of priorities in those moments.
4. Took some action steps.
After doing all of the mental and emotional work of identifying and examining my priorities to spending ratio, I took some action steps and gave myself some guidelines. First, and most importantly, I automated some savings. I had intended to do this from the time I started my full-time job, but I never made it a true priority. Now I had the clarity to do that. I met with my HR representative and changed my direct deposit so that 25% of my paycheck goes to an inconvenient account that I can’t easily dip into when the spending itch strikes. This account is also attached to a brokerage account so that, when I’m ready, I can invest some of it.
Next, I set some guidelines to help me stay on track. My partner and I decided we would go out to eat no more than once per week. I started planning out my meals each Sunday to cut down on food waste and grocery spending. I promised not to buy lunch at all, and only bring food from home. I promised to only buy a new beauty product when I ran out of the old one. I vowed not to buy something that I saw or heard an influencer talk about on Instagram. I wrote these intentions down, and I said them out loud.
My spending is nowhere near perfect. But, it’s starting to more closely mirror the true priorities that I’ve outlined for myself, and that feels incredible.
Janine is a 25-year-old Speech Language Pathologist working and living in Madison, WI.
Image via Unsplash