Intentional Spending: What It Means to Be Intentional With Money

Black woman in her late twenties, sitting at her table in a knit cardigan with her hands clasped before her face. She appears to be meditating on something intentionally.

Intentional spending is when you spend money with purpose. It’s when you’re deliberate and mindful in your purchasing decisions. Intentional spending is the opposite of impulse spending.

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By now, you’ve probably heard about the benefits of being intentional with your money. But what does intentional spending really mean? If you’re like most people, you tend to put off thinking about financial matters until an emergency pops up or something needs to be purchased. With inflation rates currently skyrocketing through the roof all over the world, now’s a good time to stop waiting for an emergency and start being more intentional about where your money is going.

Entrepreneur Jim Collins says “your most important job is to figure out how to get paid.” I’d go beyond the obviousness of income to say your most important job is to figure out how to live on less than what you earn.

It sounds intimidating, but it’s feasible if you look at things holistically and start with baby steps. First though, you need to know what it means to be intentional with your money.

Being intentional when you break out your wallet means being aware of where your money is going, and putting it towards things you value. How many times have you gotten your monthly credit card statement and wondered, “when the heck did I buy all this stuff?” You can change that! In this post, let’s look at how you can be more intentional with your money and get a firm grasp of where it’s going.

Intentional Spending Definition

Making intentional purchases is a mindful and purposeful way of using your money. It means being aware of your spending habits and making choices that align not only with your personal means, but with your values and goals.

For  example, if you value health and fitness, you might choose to spend more on healthy food and activities which support your health. Or, if travel and happenings are important to you, you might choose to spend more on experiences that will create lasting memories.

There are different takes on how to be intentional with your spending. One is to create a budget that reflects your values and goals. This can help you see where your money is going so you can make better choices. First though, you need to know what your intention is, and what you truly value.

Photo of a tip jar which can be used to catch extra small change and bills as a form of saving and intentional spending.

Know Your Intention & What You Value

Intention is the determination to act a certain way. With deliberation and purpose. To manage your spending and finances intentionally, focus on your goal. It might be something very specific, such as wanting to save up for a wedding, a new home, or to simply build a nest egg for early retirement.

Or maybe it’s far more complicated in that you’re not aiming to save up for anything in particular. Perhaps you simply have the feeling that something is off every month when the bills start flattering in. Or maybe you’ve been living beyond your means and you want to turn your finances around. Pay off credit card debt or a student loan.

In either case, take a step back and think about your particular situation and what you’re unhappy with. About  hat’s important to you, what you truly value, and what you are not  willing to sacrifice.

Once you really understand why you want to change your spending habits and what’s  important to you, you’ll have the focus it takes for intentional spending.

Intentionally Budgeting to Save Money Is Your #1 Financial Tool

Once you understand your intent, your next step is to set up a budget. This will be your most powerful tool to become more intentional with your spending. Having a budget will help you paint a clearer picture of your financial situation and make better decisions about what to allocate your hard-earned resources to.

Think of your budget as a tool which allows you to track your income and expenses so that you can make informed decisions about how to best use your money. Another benefit to  having a budget is that makes it easier to identify areas in which you may be spending more than you need to, or where you could cut back in order to save money.

A budget can be as simple or complex as you need it to be for your particular case. At its most basic, it should include all of your regular income and expenses. This can be done by tracking your spending in something a simple as a spreadsheet, or directly in your notes app.

There is also some great personal finance and budgeting software out there.  As an Apple user, I personally love Banktivity and can recommend it after having had used it for over a decade now. For Windows users, Quicken is very popular. If you’d like a browser-based app, Mint has a free plan.

How to Be Intentionally Mindful in Your Spending Habits

Ok, so now you know your intention and you’ve gotten a clear idea of your financial situation by setting up a budget to track income and expenditures. How do you actually do intentional spending now though?

To be intentional about your purchases, you need to take the following steps:

Understand  your spending patterns. Track your expenditures for an entire month to see where your money is going. Much like going low-buy, this expense tracking will allow you to clearly see where you can cut back.

Make a plan. Once you know where you can cut back, make a plan for how you will do so. Are you spending hundreds every month eating out and getting takeaway? You might consider setting yourself a spending limit and doing some meal planning at the weekends so you can cook for yourself. Comb through your subscriptions, fashion purchases and everything else that is non-existential to identify your weak spots. Then set yourself some rules you will stick to.

Be  mindful of your choices. When you are making a purchase, ask yourself  if it is something you really need. If not, consider whether there is a  cheaper or alternative option that would work just as well. Or, if you could borrow the item.

In previous posts from my Low Buy series, I’ve covered lots of examples and different ways you can trim back various categories of spending.

Reduce Your Expenses, But Don’t Give Up Everything You Love

Intentional spending is not about punishing yourself. If you know you can’t live without your HelloFresh food delivery subscription or your posh gym membership, you’re not going to be a happy camper if you cut these expenditures. In fact, giving up the things you love could very well set you up for failure.

What you want to do instead is take a hard look at all the stuff you could do without. Maybe you don’t need to drive the car to work everyday given the current cost of petrol; perhaps you could get a bike or take the train. Or perhaps you could give up your regular splurges at Sephora and start using the makeup you’ve already accumulated. After all, makeup has expiry dates. Use it or lose it, as they say.

In essence: intentional spending is about thinking through each purchase you make. I always say there are a few questions you should ask yourself before pulling out  your wallet:

  • Will this make my life better or help me solve a problem?
  • Am I going to use this within the next few days?
  • How many hours do I have to work to pay for this?
  • Will this make me a better person?
  • How many different ways can I use this item?

You don’t have to give up cute things or going out with your friends. You just need to pay attention to what you buy and why you buy it.

The Positive Impact of Intentional Spending

There is a lot of research that has been conducted on the topic of spending and how it affects the way we think about money. The general consensus is that mindful spending can have a positive impact on our financial mindset.

When we are intentional with our spending, we are more likely to be mindful of our overall financial situation. This can help us become more responsible and make better decisions when it comes to our purchasing power as consumers. Additionally, conscious spending helps us develop an overall healthier relationship with money.

People who are intentional with their spending habits are more likely to save money, have less debt, and feel more financially secure. Additionally, they are also more likely to feel happier and less stressed about money. Or use money to deal with stress.

Don’t Lose Track of Your Intention

Intentional spending is about taking control of your finances and making sure that you are only buying the things that bring you joy and get you closer to your goals. It can ultimately help you live a richer life whilst saving you money.

So keep your goals in your mind’s eye. Even if you are planning to invest in something long term like buying a condo, if you have that goal always in mind, you’ll be more likely to find ways to save money each month. It will also be easier to prevent yourself from buying  things that aren’t relevant to your goal.

Focus your spending on things that are personally valuable to you. Today, with both inflation and the rise of after-buy consumer payment options luring people into a spiral of debt, the significance of being deliberate with our purchases is huge. If you’re not happy with your current financial situation, it’s time to get intentional about your spending.

There are a lot of ways to save money, but you need to find what works best for you. You might need to make some sacrifices in the short to middle term, but it can really be worth it in the long run. Be patient and stay focused on your intention and goals, and you’ll develop a new attitude towards money with staying power.

Young lady with long blond hair calculating finances or her budget on a pink calculator. Two males hands across the table from her are seen in the picture, counting ten-dollar bills. Caption reads: what it means to be intentional with your money.
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