Disclaimer: In 2018 I am following a No Spend. This means that I am focusing on saving money and not spending on any frivolous or unnecessary items. A No Spend can look different for every person, depending on what their goals are. Through this series of monthly posts, I am sharing my tips and tricks that I have discovered along the way.
Last month, I talked about how to determine a want vs a need for purchases. Some needs are very obvious, like shelter, food etc. Beyond that, there is a lot of grey area. What may seem like a ‘need’ to one person, may be considered a ‘want’ to another person. That’s totally okay. An example of this would be a gym membership. Some people think it’s a waste of money, some people think it’s a necessity. The great thing about budgeting or going on a No Spend is that you get to decide what is most important. You get to decide where your money goes and what counts. You get to decide your priorities.
Here are two ways to determine what your priorities should be, and the one question you should ask yourself before making a purchase.
Make a list of your goals
Before you can determine what your priorities are, you first must establish what your goals are. This can be something as big as paying off debt or saving for retirement, or it can be something more simple like saving up for a dream vacation or new TV.
Goals don’t even need to be directly financial. They can be goals such as losing weight, having more experiences, becoming more organized, learning new skills etc. Think of any goal you would like to work towards.
Write down these goals and keep it somewhere visible. Look at it regularly so that you can be reminded of what your goals are. I have my main goals written on the side of my weekly spread on my day planner, and I see them all day, 5 days a week!
Determine the steps to take
Goals are something you need to work towards. It takes strategic steps to move towards the endpoint, and without some effort on your part, you’ll never reach them.
Once you know what your goals are, you need to determine the steps that it will take to reach that goal. You will need to have a very strict budget if your goal is to pay off debt. If you want to save up for a vacation, you should determine how much money to put away each month in order to have enough saved by your preferred travel date.
These steps will ultimately become your sub-goals. They are the small changes that you need to focus on in order to meet your greater goal. It will help a lot to focus on these smaller sub-goals rather than just the larger, overall goal. They will make each day feel less daunting and it won’t hurt as much if you have a bad day, and trust me, you will have some of those.
Does it align with your goals
Once you know what your goals are, and the steps you must take to accomplish that big goal, you can then determine what your priorities should be. It really boils down to one (not-so-simple) question: does this purchase align with my goals.
Here are two personal examples:
Goal #1: Experience more – Without a doubt, this was my number one reason for doing a No Spend. Rather than just having more things, I want to do more things. Any purchase that involves an activity will fall in line with this goal. I will spend money on going to movies, having a meal out, going camping, or any other activity that may be presented to me. This doesn’t mean that I can go completely crazy with spending money in this area, I do still need to budget, but any experience is a priority for me and I won’t feel bad for spending money in that area.
Goal #2: Be healthy/lose weight – This is a longtime goal of mine, and will likely always be a focus in my life, to some extent. I do put more emphasis on being healthy than losing weight because those two aren’t always one-in-the-same. Some purchases that line up with this priority are a gym membership, fitness classes, fruits & veggies even if they raise the grocery bill, 5k’s etc. I would even consider it a priority if I need to replace any workout clothes or running shoes.
Get the idea? If your goal is to learn more skills, then you may be willing to spend more money on different classes or courses offered in your city. If you want to be more organized, you may spend money on a day planner or home organization. Maybe even your morning coffee at the local cafe is a priority for you because it helps you keep your sanity throughout the day. That’s totally okay!
If you are wanting to follow a strict(er) budget or participate in a no spend, this is a great way to decide where your money needs to go. Once you have determined what your needs and priorities are, you can stop agonizing over every little purchase. It does get easier as time goes on, and the payoff is well worth it. It can result in less stress and you may even feel happier without all the junk coming in.