Smart money moves: Mastering mindful spending in your 20s
We know how it goes: you click on a link and before you know it, you’re checking out your cart. And before you know it, you have less money, maybe more debt, and even more stuff you’ll later realize you don’t need.
And you’re not alone. The lure of instant gratification affects people at any lifestage. However, across different life stages, you’re at a point where you’re poised to benefit most from starting good financial habits and nipping bad ones in the bud.
Here's a quick guide to help you navigate your finances smartly and set the foundation for a secure future.
What is mindful spending?
Mindful spending isn't about stringent budgeting or depriving yourself. It's about making more thoughtful and deliberate choices with your money. It starts with understanding your values and aligning your spending with them.
Whether it’s a new gadget, a trip with friends, or a daily coffee run, consider if it’s worth your hard-earned money. Ask yourself, “Is this purchase going to add value to my life or contribute to my long-term goals?”
The trap of impulse buying
Impulse purchases are often emotional decisions made in the heat of the moment. They might bring temporary joy but can derail your financial plans. Recognize the triggers. Is it stress? Peer pressure? Or is it the thrill of a good sale? Remember that awareness is the first step in changing your behavior.
Strategies to avoid impulsive spending
Wait it out: Establish a 24-hour rule before you make a purchase. Giving yourself time to think can make a huge difference. If it’s an impulse purchase, you’ll likely be over it after you let it simmer for a bit.
Budget for fun: Allocate a specific amount for ‘fun spending.’ This way, you can enjoy it without guilt and without going overboard. Depriving yourself increases your vulnerability to the impulse. The goal here is to find a good and affordable balance.
Track your expenses: Regularly monitor where your money goes. Tracking apps or a simple spreadsheet can help you stay on top of your expenses. Reviewing your credit card statements regularly also lets you see where you are spending.This helps you see where you’re overspending (all the coffee adds up!) and make the necessary adjustments.
Set financial goals: Whether it's saving for a trip, an emergency fund, or a major investment like a car or a home, having clear goals can keep you focused and less likely to spend impulsively. (read more about the benefits of setting financial goals here.)
Metrobank Moneybility suggests that if you find that there is little or no money left for savings after summing up your expenses, look at your list of “wants” and rank them in order of importance. Take out those you can do without in the meantime and convert those expenses into savings.
The power of prioritizing savings
Saving isn't just about putting away what's left at the end of the month—if there’s anything left. Teach yourself to treat savings as a priority, like a bill that you have to pay on the due date. Start with a manageable percentage of your income and gradually increase it (here’s a good example).
Remember, the goal is to build a habit, not to strain your finances.
Practicing mindful spending leads to financial independence. It’s empowering to know that you are in control of your finances, rather than your finances controlling you. This early habit will set the tone for your financial journey ahead, helping you make informed decisions that align with your personal and financial aspirations.
Read more about how you can get started in your financial journey:
