Do you ever ask yourself, “Why do I buy the things I buy? Why do I buy every new iPhone that is released? 2 cars, 20 pairs of shoes, that expensive dinner?”.
Unconscious behaviours creep into our life all the time that we sometimes function on autopilot and forget to be a little more thoughtful. Think about your daily routine, how much of it is so automatic that you aren’t conscious of what you’re doing? When we handle our money the same way, debt creeps up on us and suddenly, we’re in financial trouble!
Folks, allow me to introduce you to unconscious spending. It might look a little like this: You recently found items at home that you completely forgot you bought; you don’t know how much you are paying, for example, in interest rates, fees and charges; you max out on your credit cards and you don’t even know what you’ve spent on; or you are still paying instalments for items you don’t even use anymore.
Sounds familiar? A heightened level of awareness (note: many would also call this mindfulness) comes in handy here. Being more thoughtful about how, where, and why you spend your money can help you save more, spend more consciously and take control of your finances.
In today’s world, credit is almost a necessity and in fact, we stand to gain a lot when we use lines of credit smartly, for instance, to pay for our education or a home. Psychotherapist Charles Richards said, “accumulating debt lies not in the fact that we borrow money, but often in the way we borrow and how we use what we borrow”.
How do you practise conscious spending? Well, the general rule of thumb is to spend on the things you love. Similar to Marie Kondo’s philosophy of decluttering, fill your environment with the things you love, things that are aligned with your values and who you are.
The point here is not to cut out all spending in your life, which might leave you completely miserable and unhappy. Instead, it encourages you to take control and spend only on what matters to you – to give you more fulfilment and greater satisfaction over where you spend your money.
For instance, I have no hesitation spending thousands of RM on a trip to South Africa to experience a Safari tour. But I might cut corners and resist buying premium coffee every day. Some might say, “how can you spend thousands of RM but not RM10 for a cup of coffee?”. Well, because, I love to travel more than I love coffee.
Many of us may be living a great life but yet still feel unsatisfied. We make money but we also spend it all. We live pay check to pay check, in debt, and left wondering where all our hard-earned money has gone. As we head into the end of the year, this might be a good time to do a little more self-reflection and decide how, where and why you spend your money.
“Discarding is not the point; what matters is keeping those things that bring you joy. If you discard everything until you have nothing left but an empty house, I don’t think you’ll be happy living there. Our goal in tidying should be to create a living environment filled with the things we love.” – Marie Kondo
Nadia Khan is Content Manager of www.CompareHero.my, dedicated to increasing financial literacy and to help you save time and money by comparing all credit cards, personal loans and broadband plans in Malaysia.