Are You Spending or Wasting Your Money?

During one month we manage to spend a lot of money, but one question we all should ask ourselves is, are we spending or wasting our money? The difference between spending and wasting is that when you spend money you are buying something that you really need or value, something that matters, and when you are wasting money you are buying things you could live equally well without (this is my own definition). The average person has a quite big portion of money that is being wasted, it’s partly because it is fun to buy new things, we enjoy the comfort and it is also a habit. But can’t we get joy from something else than material things? Is the comfort we get really that important and is shopping a habit we want to have?

Maybe we like our lives as it is now and we are satisfied with the money we have at the end of the month and the amount we spend. However, I don’t think we should settle for this. What you spend your money on shows what you value in life, and as cliché as it is, we only have one life and we should live it in quality. Wasting your money is like living with a hole in your wallet.

What are typical things we waste our money on? A rule of thumb is that it would not make a big difference for you if you hadn’t bought it. It can for example be the coffee on the way to work that easily could be replaced with homemade coffee, it can be all the clothes in your wardrobe you are not wearing or those small unimportant things like notebooks for example (I do admit that I have a collection of cute notebooks that I bought without a purpose). Many things we waste money on doesn’t only lack value, it can also have a negative effect on our lives. We own more things than ever historically and the more things we have the more things we need to manage, organize, tidy and so on. It can cause stress in our lives, it can be time consuming and these are quite unpleasant side effect. On top of that, all those pointless things we are buying which results in sooner or later throwing away perfectly functioning products is adding on to the growing environmental problem the world is having.

We are living in a consumer society, and most of your money goes to the big corporations that are making huge profits out of our shopping habits. The follow up question is, do we really want to put our money in these big corporations or do we want to put our money on ourselves? And if it would involve big corporations, at least on something that matters for us so we get some value for the money we give the corporations. Every purchase we make should benefit ourselves in more ways than just the sudden satisfaction of something new and exciting without negative side effects.

After all, shopping is just a habit we have developed. Habits are not always easy to change and if we think that it will be easy we will have a much harder time to change the habit. One approach I suggest in order to create a new habit is to go cold turkey, stop buying anything except life essentials like food for example. It is up to you to determine what are the essentials in your life, there is no need to cut out absolutely everything that we could live without as this would more likely result in failure. You can still get your haircut but you probably don’t need more clothes, be honest with yourself and differentiate what you really need and what you think that you need. But don’t be afraid to be a bit more extreme, most likely you already have enough things as it is so you will be fine. To make it easier setup a saving goal for something special you would like to do or buy, this will help with your motivation in times you will be tempted to waste money. Doing this helped me a lot before I went on my first exchange in Japan, I had to save as much money as possible so it was completely out of question to spend money at all, eventually it didn’t even cross my mind to buy things anymore. I recommend to do this for a month to begin with, and the longer you keep going the more solid your new habit will become.

Once we have managed to quit wasting money what we want to do is to develop an active decision making process when shopping. When we are about to buy something we should always ask ourselves what role this thing will have in our life. Is it something that would be nice to have but you don’t really need it or is it something you truly value? This is a learning process and in the beginning you might think that you need more things than you do, with time you will notice and be able to detect those things at an earlier stage. The difference between this step and the first step of not buying anything is that first you only buy things you need, in the second step you start buying things you value as well.

With this logic you don’t have to stop spending money completely, you just want to make sure that you are spending your money on something you value. There are some things that we never really need, snacks for example, it doesn’t mean that we never can buy snacks, but when we do buy snacks it should be in a time we truly appreciate it and not every second day. The best part of all, by becoming more conscious and cutting down your wasting, apart from being more environmental friendly, you will also have a nice side effect of saving money. This is money that enables you to spend on bigger dreams in your life.

So, the question still remains, are you spending or wasting your money? And what will you do about it?

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