5 Foundations of Personal Finance, #1: Mindful Spending

Photo by paveita

This is the beginning of a new discussion series: The 5 Foundations of Personal Finance. I look forward to hearing your perspective too.

Shopping is easier than ever. You can compare prices online, find online coupon codes, “windows shop” — you don’t even have to get dressed.

Shopping has become a form of entertainment.

As easy credit became available to virtually anyone, our attitude changed from “save up first, then buy” to “buy now, pay later”. It can all be paid off in small monthly payments that you’ll be making for a long, long time.

I wrote earlier about how my husband and I became debt-free, paying off $30,000 in debt in less than one year. We don’t ever want to be in debt again. “Debt free” truly means freedom, and I enjoy the flexibility we now have.

That’s not to say all debt is bad. Some people will argue that debt is a tool, and I completely agree… in certain cases. Organizations like Kiva arrange microloans to help people in developing countries earn income for their families. Those stories are inspiring, and I love that those loans are available.

That is how debt can be used as a tool: when it’s used for building income, not when it’s used for personal consumption. After you’ve eaten that restaurant meal or grown tired of the new shirt, you don’t have much to show for that raging credit card bill.

Spending wisely is about choosing to spend with discernment and discipline. Once you’ve made that personal decision, there are cash-only plans, budgeting tools, coupons, sales… all kinds of methods to help you stay in control of your spending. 

Our family does a No Spend Month every July in which we limit our spending to $250 for the entire month. (We’re doing it this year too if you want to join in.) During that month we keep to a strict limit, but even then the goal is not to stop spending money completely:

The true goal for No Spend Month is to practice making expenditures planned and purposeful, rather than impulsive and temporarily satisfying.  Because it’s not about the $250, or whatever the budget may be, it’s about good habits and a clear perspective.

Does all this mean we should never enjoy ourselves and should only buy what we need? Of course not, but let’s keep in mind how discipline helps us to enjoy things more: the first ice cream cone tastes really great — the tenth, not so much.

How do you stay mindful about spending, and how can you do it it together as a family? What reminds you to think twice before you buy something?
About Rachel

I write about practical tips that will help you simplify at home. Connect with me on Pinterest and Twitter.


  1. Sandra Gonzales says:

    I have started to budget everything down to smallest item at the grocery store. It began with being mindful of what we were actually using. For years, I’d purchase too much fruit or vegetables and end up throwing out a whole lot at the end of the week. So now I purchase smaller amounts and somehow there’s always enough.

    As far as clothing goes, I was always buying new clothes. I justified that because it was affordable (like from Target) well it wouldn’t hurt my budget. I ended up with a cluttered closet.
    So I took a picture of my closet and when I’m tempted, I pull out my photo. Shopping for more doesn’t seem that appealing anymore.

  2. needs vs. wants. Today, I am taking my girls out shopping because they NEED some new jeans. They wanted them weeks ago. They each have a budget that I will spend on them. My oldest suggested we take two calculators so they can keep track of how much they are spending. I thought that was pretty smart of her and she is 11.

  3. I haven’t mastered the NEED versus WANT monster yet, but I’ve been aggressively working on it this year. I’ve been trying to cut my monthly grocery bill from $500 to $400, and with each passing month, I’m getting closer the $400 target. For the first time in my life, I’ve actually started looking in my fridge and pantry to see what should be for dinner…not what we “feel like” for dinner. These days, it kills me to throw away expired food!

    Kirwin´s last blog post..Edit, Add, Appreciate

    • That’s great, Kirwin. Working toward a goal gradually like that really makes it a lasting change.

  4. We do a budget, and are very mindful of our spending especially now that I have been laid off. It is amazing to me how well we can get by when we just plan. I have found you need to plan not just for the monthly expenses but the quarterly and annual expenses you know will happen.

    For example, we just paid our vehicle registration for the year, which was over $200. It was not a surprise when we got it in the mail, and we knew where we would get the money from the budget, so it was still painless. I used to only think about the monthly expenses, or weekly expenses, and then panic when this regularly recurring stuff happened that didn’t happen monthly. It is much better now to know what is coming and have a plan. It has made life less stressful.

  5. One of Rachel’s posts a few weeks ago got me thinking about just this subject and here’s what I came up with:


    I really look forward to the other posts in this series : )

    Juliet´s last blog post..Irredeemable

  6. Christine says:

    What reminds me is having a smaller home. I think twice about the amount of space it will take up or if I will eventually have to store it.
    Having limited storage and small closets helps to keep our home clutter free and puts the reigns on impulse buying. We have no debt except for our house. :)

  7. We are currently struggling with this concept. I made a financial plan this year with concrete actions to take to meet our goals. However, our resolve falters.

    Miko’s Girl´s last blog post..Daring List for Brides

  8. Great project!
    Since we are spending half the year in Germany and half in the US, the question of every item is: Do I want to haul this back and forth? Is it worth that much to me?
    Or do I want it/need it so much that I’ll spend the money for something I won’t see half the year?
    As a result, we rarely purchase “stuff”. Then there’s the whole small house thing. That’s a huge factor, too.
    I look forward to the rest of these posts!

    Katie at makingthishome.com´s last blog post..How-to: Refurbish Wood Furniture

  9. You are so correct in that shopping HAS become a form of entertainment. In some ways, living in a small town helps in that I no longer troll Target when I am bored. The closest Target is 40 miles away! I have to really need something specifically from there when I am bored. Same with mall cruising – have to have a purpose to even darken the door.

    I think for myself, recognizing that I am a huge impulse spender and developing (or WORKING on developing) self-control in this area has helped. Whether I am shopping for new books, new cloth diapers, clothes, shoes, and even/especially at the grocery store, I make myself take time to walk away and really think through a purchase. That’s my best path to mindful purchasing!

    Megan@SortaCrunchy´s last blog post..Holy Week: Monday

  10. Jenni at My Web of Life says:

    I love this post!

    I’ve personally been on a ‘shopping fast’ for the past few weeks as part of my ‘Giving up Carbon for Lent’ series. I definitely used to be a recreational shopper and have been surprised at how I no longer feel the need to shop for the fun of it! I do have to admit that it was difficult at first, and I will be buying my children each a little token gift for Easter, but I feel confident that my shopping habits have changed permanently. I look back at how I used to shop, and look around at the clutter that I still have in my home and it all feels so gluttanous. NO MORE!

    Thanks again for a great post!

  11. V. Higgins says:

    This has been a long, difficult road for me, one that I’m still travelling on. Shopping was theraputic for me and now I’m trying to break that habit.
    When we first got married my husband’s parents suggested the “envelope system”, we thought that was way too much trouble and that we would be just fine using our debit card… 9 months later we realized that even though we’re not *way* overspending, we’re still not saving like we want to. So this month we’re using the envelope system for anything that we don’t pay for online (like groceries, clothing budget, etc.). This is allowing us to save up for a trip to a friend’s wedding and other things that aren’t coming up for a few months but we’ll still need to be prepared for.
    Another way for me to hold back is thinking “where am I going to put it?”. We have a small apartment and I already have too much clutter, unless it’s to replace something else, I’m not going to buy it.

  12. Agreed. This is something I preach about all the time on my blog, that you just have to track your expenses and just.. KNOW what you are spending instead of pretending you’re in denial.

    Pear Budget didn’t work for me. I tried it 2 years ago and had to come up with my own more dynamic option.

    Fabulously Broke´s last blog post..Blaming anyone but yourself is the easy way out.

  13. Ah yes…one of my favorite topics, and something that my kids here are drilled about frequently.
    We are living debt free, except for the house, and have changed our mortgage from 30 to 15 years in order to have that monkey off our back as well. With my hubby currently unemployed, we are so thankful that we identified needs vs wants a few years back and have planned accordingly.

    Jen@Balancing Beauty and Bedlam´s last blog post..Trash to Treasures…it’s yard sale time!

  14. NMPatricia says:

    Ah, mindful spending. I have struggled with the wants vs needs. I find Madison Avenue’s constant push to sell wears on me and will catch me if I am not constantly mindful. Just got back from doing the every other weekly food shopping. I was amazed at how displays are put and how tempting they are. Shopping is therapeutic and it is also entertainment. When a huge cut in income came about 7 months ago, I have really struggled to break both of those behaivors. It is tough. BTW, we own our home and owe no money. It isn’t that I can’t. I just don’t like it.

  15. I stay mindful about spending by sticking with the “one item in, one item out” philosophy that we just implemented. That’ll help me curb impulse purchases for sure! In addition to thinking about how much I want something, I’ll have to think about what I want to get rid of in order the welcome the new item into my house.

  16. We’re not doing so well with budgeting, but I think being on top of things is key. If you know at any given moment how much is left in your bank account, what bills are coming soon and how long you have to wait until your next paycheck, it’s easier. We try to save in our ING account because my income is not regular, so if there’s a month when I don’t make enough, we withdraw it from there. This means that in our account there’s rarely more than we are “allowed” to spend, so we’re fairly safe.

  17. Does House debt count as debt you do not want to have?

    When you do your no spend July- that cannot include rent and such does it? I look forward to reading/hearing more about this! Thanks.

    Taryn´s last blog post..If I had all the money in the world-

    • That’s something we’re hoping for, Taryn. We’ll have to see if it’s feasible or not.

      The No Spend Month doesn’t include rent or monthly bills. (The link takes you to a page that shows what’s included.)

  18. Awesome post! I linked on WorthyingtonWire under Good Stuff.

    xo, Alli

  19. Learning to be mindful of my spending was hard, too many times I would hand over the cash without thinking only to realise ‘whoops, I wasn’t paying attention and spent wayyy too much again’.

    I learned to deal with it by planning every expense. Planning and writing down how I would spend every cent before I left the house kept me focused and helped separate needs from wants. If anything crossed my path that day that wasn’t on the list, it would have to wait until tomorrow (unless it was an emergency and emergencies are really easy to identify)

    While I was planning, discussing the expenditures with my partner also helped, talking about what I would do seemed to reinforce things in my mind and his thoughts and input were invaluable.

    Also, as your habits change, it’s really important to find frugal substitutions to replace old habits.

    For a long time, it just felt like I was failing, because although I kept making improvements, I also kept raising the bar. Then one day I looked back and couldn’t believe how much we had changed, not only had our bottom line improved, our LIFE had!

  20. Moving is a great way to decide that you never want to buy another object. Piles of stuff that have to be hauled from one home to another are not anywhere near as appealing as the pretty store displays, so I keep that image in mind. My motto is: Don’t buy it if you don’t want to pack it, haul it, unpack it, and find a place for it.

  21. This really is a great post–& certainly hits close to home these days for my husband and i. I’m still in school–medical school, to be exact. And each day that i wake up and set out to learn stuff on my rotations, we rack up another dollar (or $100) in school debt. It hasn’t produced ant trouble in our marriage or financial life…YET. My husband is fortunate to have a stable job at this point with an income that doesn’t allow for lavish purchases (which we wouldn’t want anyway), but allows us to live entirely comfortably. I struggle with clothing and scrapbooking purchases the most and have recently tried to rope in and target my motivations for spending in the first place. We don’t have kids yet (& likely won’t until my husband is out of the Army & our ho e life is a bit more stable with my career)…but i constantly feel like we aren’t saving ENOUGH for our future or i’m spending too much on fresh, healthful food for just the two of us. I’m really struggling finding balance between the palling ahead and the enjoying of the present…

    Jlyn´s last blog post..ugly confession.JUDGEMENT.

  22. I still like to go shopping our get out in the stores every now and then for inspiration. Sometimes, it’s just being in a different place, seeing a new spring blouse, that lifts my spirits. But it definitely doesn’t have the draw that it used to, because I usually don’t have any money to spend :).

    Being in the “usually don’t spend” mode for several months, it quickly becomes a mental habit to find a reason I don’t really need the object I might want. For example, I often ask myself how many times I would really use that item, and how much additional clutter it would create in our lives in the form of extra time commitments, extra space to store it, etc.

    Life from the Roof´s last blog post..Favorite Frugal Recipes: Tabouli

  23. I am so glad that I found your blog! AMEN AND AMEN!
    One way that I curb my spending and keep myself in check is to put a little post it on my credit/check cards that has some reminders on it.
    It has the reminder that I want to send my kid to college, I want to be able to tithe and I want to own my house. It makes me think twice before I buy.

  24. We – my husband and I – just have a thing where if we’re going to spend more than $100 on something, we have to tell the other person (not really asking permission…just saying it out loud.). Thankfully, we get along well, so it’s not overbearing in any way…it just makes you think to have to admit out loud to someone that you are going to spend that much and on what! :)

    Kelli´s last blog post..Food

  25. Marvelous advice! Thank you for sharing. Things only temporarily satisfy because before we know it, we are desiring something else.
    Out with the old habits, in with the new!!!

    Kelli´s last blog post..The Tongue

  26. I run through a barage of questions in my head before I purchase something (other than the necessities, like groceries). It usually goes something like this: Do I really need this? Do I need it now, or can it wait? Can I buy it cheaper somewhere else? Can I make it out of things I already own at home?

    Often times, I spend so much time deliberating over a purchase that I talk myself out of it. I figure that if I’m really stuck on whether or not to purchase it, chances are I don’t need it that badly!

    As for how we do it as a family, my husband and I are very open with our communication on spending. We discuss almost every purchase before we commit to it.

    Cara @ repurposeful´s last blog post..4 new uses for an old shower curtain

  27. what a great series to begin! and i had not realized you had paid down so much debt. impressive!!

    nicola´s last blog post..thrifting!

  28. I think about how we’re going to use the item. Is it enhancing our lives daily? If not, it’s a no purchase.

    Rona´s last blog post..Everyday Food Cooking Magazine and TV Show – Yummy Recipes