A Healthy Spending Mindset
I know people who never spend any of their money; they hold on to it and save, save, save. I also know people who are making really good money but still live paycheck to paycheck because they can’t stop spending. These two examples are on the opposite ends of the spectrum and neither of them are healthy.
You’re probably thinking, what’s wrong with saving all your money? You find the answer when you dig a bit deeper. People who are extreme savers often develop their saving habits out of fear. They fear they will lose their money so they hold on to it very tightly. They usually have this mindset because they grew up being told by their parents that money is difficult to come by. So they develop a deeply rooted fear of losing any money they come across and often feel guilty when spending.
On the other end of the spectrum we have the extreme spenders. They spend their money just as quickly, if not quicker than they earn it; and they usually can’t seem to figure out why or how this happens every month. Again, the culprit is fear. But it’s a different kind of fear. Instead of fearing they will lose their money, they have a fear of missing out (or FOMO). They fear they will miss out on this weekend’s sale, or on a good time at the concert, or even on having the latest technology, fashion, or accessory.
It’s important to not live according to your fears, whether it be fear of losing or fear of missing out. There are two ways to do this and regardless of where you are on the spectrum, you should do both.
One is to view every penny you spend as an investment. When you buy food or a gym membership, you’re investing in your health. When you take a friend out or go on a date, you’re investing in that relationship. Every time you spend money, ask yourself “by making this purchase, what am I investing in?” Decide if that investment is in line with your values and what’s important to you (not anyone else). This will help you spend, or not spend, wisely.
The second is to set aside 10% of your income as fun money. You absolutely must spend this 10% and only that 10% each month on things that bring you joy. Whether it be shopping, concerts, or a weekend getaway, the money must be spent! But also, make sure to not go a single penny over.
If this post was helpful to you or if you have questions, comment below!