Conscious Spending

Back when I was working in office, I would spend money on buying coffee from Starbucks twice a week. My collegeues would always tease that I have ‘atas’ (expensive) taste. Why spend $6 for a cup of coffee when you can get a chicken chop meal for the same amount?

For that same reason, I cannot phantom why someone would want to own a car and pay $1000 a month on a depreciating asset (it is very expensive to own a car in singapore). Why spend that amount when you can get a taxi or Grab (Uber equivalent) at your convenience, and you don’t even need to through the hassle of finding a parking lot.

Now, that flavorful, aromatic crema from my ‘atas’ coffee is something that I crave on some mornings. It just makes a dull morning so much brighter. I would pay $6 for that! Heck! Maybe even $10 for that.

Different people place values on different things or experiences. Some people don’t mind spending $10,000 on a handbag. Others might splurge that $10,000 on a luxurious holiday. And then there are those that spend it on owning a car. There is nothing wrong with spending that $10,000 on a handbag, holiday or a car.

Notice the word OR. You can choose what you like or enjoy doing and spend money on those categories. However, you can’t just go, I want that $10,000 handbag AND that luxurious holiday AND my BMW. This is where conscious spending comes in.

What is conscious spending?

Conscious spending is a term I learned from Ramit Sethi.
From his site: Conscious spending means you decide exactly where you’re going to spend your money–for going out, for saving, for investing, for rent–and you free yourself from feeling guilty about your spending

Put simply, it just means to spend money on things or experiences that are of value or important to you. Before you can do this, you need to figure what things/experience spark joy to you?

For me, I know coffee explodes into fireworks of joy for me! Another thing I value is comfort. I remember there was once, me and my husband wanted to save money on Grab rides. So we took the train with our then 2 year old daugther on the 1 1/2hr journey. She was everywhere and the train was so crowded (This was pre-covid 19 era). By the time we reached our destination, we were exhausted to do anything else.

After that, I swear to myself that I will not save money on this! I will gladly spend the $20 on the Grab ride, in comfort. And my husband agreed wholeheartedly with me.

Because I value comfort, when I plan for a trip, I don’t mind paying more for a more comfortable flight or hotel. I guess I am past the age where I have to go budget and cheapest on everything.

Then there are things that I don’t exactly care about. Like clothings or shoes or handbags. I don’t spend much on clothings, my wardrobe probably contains of t-shirts and jeans, and that occasionaly dress that I need to wear for some formal events.

How to get started?

If you have no idea what you enjoy, then the first thing to do is to track your spending. Then go through each spending, and ask yourself, does it spark joy? Doing this exercise will make you more aware of what you are spending on.

For example, I used to buy pastry or muffin with the coffee. As I was going through the exercise, I realised I could do away with the food because what I really needed was the coffee.

I also found out that I was subconsiously upgrading my apple phone every 18 months when my mobile contract is up. Having a iphone 6 vs 7 vs 8 doesn’t really mean a lot to me. I just wanted a phone where I could surf net, msg and chat. So I stopped upgrading my phone whenever my contract is up.

Once you know what things/experiences you value, then you know you can spend more on those areas, and lesser on others. That said, of course you still need to spend within your budget. Conscious spending doesn’t mean you can blow off your entire paycheck on something you value.

Hopefully with conscious spending, you will be able to spend on what you really value without feeling guilty.