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Making Mindful Spending Decisions

Well-entrenched spending habits can be difficult to shake. If you’re in the habit of impulse buying, paying for convenience, or engaging in retail therapy (doesn’t everyone get into bidding wars over Princess Bride memorabilia on eBay when they’re feeling anxious?), then you are likely to keep returning to these habits if you don’t intentionally work to disrupt them.


Happiness is retail therapy? As you wish.

Making mindful spending decisions isn’t always easy, but there are some tried-and-true strategies that can help you re-contextualize your disordered spending habits and start to build better ones:


Calculate Costs in Hours Rather than Dollars


Acting mindlessly means that you are treating information as if it is true in all circumstances. This can be especially pernicious when it comes to the context of money and prices. We focus on the number on the price tag (or the monthly installment cost) without recognizing the context of that price. Specifically, the context of having to trade hours of our time to earn the money to buy things.


To re-contextualize prices, begin looking at financial transactions in terms of the hours you spend to earn the money necessary to make these purchases. Vicki Robin and Joe Dominguez popularized this strategy in their book Your Money or Your Life, where they make the case that your time is literally money, since you trade your time away in order to get money. While money is fungible (that is, replaceable), time can only be spent, not earned. Simply recognizing that can help give you a better context for your personal costs.



This is why it’s a good idea to calculate your hourly wage. If you are paid hourly, then you already know how much your employer pays you per hour. However, it’s a good idea to calculate your net hourly wage (how much you make hourly after accounting for taxes, dues, retirement savings, or other withholdings).


To calculate your net hourly wage, start by multiplying your monthly income by 12 to get your annual income. Then divide your annual income by 2,000, which is the typical number of hours worked per year. The number you come up with is how much each of your work hours is worth. Let’s say your monthly income is $3,100. If you multiply that by 12, you get $37,200. Divided by 2,000, you get an hourly wage of $18.60.


Having that number in your head can re-contextualize prices, because it gives you a concrete value of your hours to compare prices to. When you are tempted by a home assistant device that’s on sale for $150, the price may seem like no big deal. But is it worth 8.06 hours of your work time?


You may ultimately decide that having a home assistant device is worth just over a day of work—and that is absolutely fine. But calculating prices in hours worked means that you are clear on what the true costs are. You are making a calculation using the full context of the value of your time, rather than simply focusing on a number.


Know Why You Are Buying


Making purchases has a lot in common with eating. They both can feel very good in the moment, to the point where you override any signals that tell you that you’ve had enough. Like eating, we often spend money because we want to change our emotional state. And in both cases, there is a huge industry bent on keeping us mindless, continuing to ignore signals and consuming in order to avoid our emotions.


As with eating, it’s important to check in with yourself to understand why you are consuming so you can stop if it’s not what you really want, or engage mindfully with your consumption so you can truly enjoy the process if it is what you want.


But wait, there's more!

Eventually, you will be able to quickly check in with yourself before you click BUY NOW! on the must-have purchase in your Amazon shopping cart, but it can take practice to get there.


Before you’ve internalized the questions to ask yourself before a purchase, you will want a visual reminder to help you remember to pause and make a mindful decision about your spending. Here’s how:


Get several blank index cards. You will place these where you’ll see them anytime you might spend money. For instance, you might put one in front of your credit cards in your wallet, one on your laptop, and one taped to the back of your cell phone. On each card, write following questions for yourself:


  • Why do I want to buy this?

  • What problem do I expect this purchase to solve?

  • How do I expect to feel after making this purchase?

  • How long do I expect to own this item/use this service?

  • Do I already own something that is similar to this?

  • Can I recreate the feeling of buying or owning this without spending money?

  • Can I recreate the feeling of buying or owning this by spending less money?


That said, it’s important to remember that these questions should not be a stick you use to beat yourself. There are a number of individuals who already ask themselves questions like these before each purchase. Many such individuals often forgo buying things altogether. While their process can look like mindful decision-making, it may actually be a kind of disordered money behavior wherein you are scared to spend money.


The difference between mindfully choosing not to spend money and fearfully avoiding purchases is a matter of how each one feels. Mindfulness should feel comfortable and satisfying, like slipping into a coat that fits you perfectly. Disordered spending avoidance feels more like staying away from something that you are afraid will hurt you. It’s not nearly as comfortable because the fear of the sting is always there.


These questions should work to help you decide which purchases are worth making so you can learn to embrace the mindful process of choosing purchases that add value to your life.


Keep a Purchase Waiting List


There is an excellent reason why “wait before making any purchases” is one of personal finance’s greatest hits. Forcing yourself to wait to decide if you actually want to spend money on a purchase can help mitigate the emotional element of spending decisions. You remove yourself from the specific context of the sale so you can recognize the greater context of your finances.


But if you have ever tried to institute such wait-before-spending rule for yourself, you’ll recognize the “But I don’t wanna wait!” reaction that is common to someone in the throes of an impulse decision. While the petulant feeling of not wanting to wait is often more than enough indication that you don’t actually want or need the purchase, it can still be very tough to stand up to that foot-stomping part of yourself that is insisting on making the purchase right now.



One method of both calming and honoring the little Veruca Salt inside you is to keep a purchase waiting list. When you find something that you absolutely want to purchase, and darn it, you don’t wanna wait!, you can quickly write down what it is, where and when you found it, and how much it costs. Once you have written it down, set a date anywhere from 24 hours to 30 days in the future when you may come back to make the purchase, if you still want it at that time.


There are two benefits to this list. The first is that you are recognizing the part of yourself that wants to give in to the impulse purchase. It does feel good to buy things on a whim. It would be fun to have whatever cool or cute thingamajig you’re pining for. Writing down all the details about the potential purchase is a way to honor the reality of your spending desires. You’re not wrong for wanting the item, even if it’s not something that will ultimately help you reach the life you want. And making this list can help you feel more at peace with leaving it behind at the store or on the website because you have honored your very real emotional reaction to it.


The second benefit is that by creating this list and letting it age, you learn to spend less on impulse purchases, while still being open to making spending decisions that truly enrich your life. True impulse purchases won’t tempt you to return, since the inconvenience of going back will be stronger than the impulse to buy. The purchases you actually care about will be worth the wait, and allowing yourself to go back for such purchases will ensure you do not feel deprived.


When you do go back for an item that you have placed on your waiting list, you have satisfied multiple emotional needs in a way that feels far better than simply giving in to impulse purchases or forcing yourself to forgo any unnecessary spending.


Intentional Spending Feels Better than Making It Rain


A funny thing happens on your way to mindful spending habits. You find yourself feeling less and less satisfied by the kind of buy-whatever-you-want-and-damn-the-consequences behavior that used to be so compelling. When you are simply indulging magpie-like gimme-gimmes, you never take the time to truly enjoy anything you spend money on. But if you take the time to intentionally spend your money, you get to enjoy the purchase three times: while you plan for it, when you buy it, and once it is yours. Mindless spending only feels good at the point of purchase.


Unless, of course, you’re up late bidding on a life-sized stuffie of a Rodent of Unusual Size.


What strategies do you use to be more intentional about your spending?

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© 2020 by Emily Guy Birken