What is mindful spending and how can you practice it?

Spending mindfully can help you to make the most of your money, while also lowering stress so often caused by overspending or impulse buying.

Mindful spending is all about putting intentional thought into your financial decisions. Instead of just buying something you think you want on a whim, take some time to really consider the purchase. You’ll reach your financial goals much sooner if you only spend money on purchases that you’ll truly value.

In this guide, we’re sharing 10 mindful spending tips to help you get started.

1. Create a budget

Add up how much you have coming in, and what money you typically have going out each month. This will help you to see where your money’s going, and potentially spot ways you can make some changes or savings.

You can then identify how much spare money you have each month, once essentials such as your rent/ mortgage, utilities, and food shopping have been deducted. You may wish to put a certain amount each month into your savings, leaving you with a set amount of spare money to spend each month as you wish.

If you’re interested in learning how to manage a budget, check out our guide.

2. Set goals to help you prioritise your spending

Experts at the University of Stirling say that “setting yourself goals is the key to successfully saving money.” You’re more likely to adjust your spending habits and reach your savings goals if you have something to work towards.

Whether you’ve got your eye on a new car, an exotic getaway or you simply want to build up an emergency fund, set yourself a clear objective. It could even be as simple as saving up for a piece of clothing or kick-starting a new hobby. You’ll be far more likely to spend mindfully if you’re trying to build up some cash for a purchase that means something special to you.

3. Automate your savings

Once you’ve set your spending goals and worked out your budget, you might find it beneficial to set up automatic transfers to your savings account. This way, you’ll consistently add to your savings fund without having to think about it.

A recent report by the Financial Health Network suggests that people who use automatic savings tools tend to save more per month, so it’s worth doing your research on the best autosaving app or tool for your needs.

4. Separate purchases into 'needs' and 'wants'

Do you really need that new jacket, or that treaty takeaway? We often tell ourselves we need something when, in all honesty, we don’t.

Differentiating between essential or obligatory purchases (food, housing etc) and non-essentials is key. If the purchase doesn’t contribute to your long-term goals, it’s probably not an essential. That said, there’s nothing wrong with setting aside some cash each month for guilt-free ‘want’ purchases – just make sure you don’t go over budget!

5. Follow the 24-hour rule

We all impulse spend from time to time. But rushing into a purchase may lead to feeling regret later, particularly if you find out it isn’t fit for purpose or isn’t really something you needed after all. Studies show that, on average, people spend nearly £184 annually on purchases they come to regret.

If you’ve got your heart set on a purchase, set yourself a challenge of waiting at least 24 hours before buying. You’ll know if it’s something you really want – and something that can realistically work within your budget – once you’ve had a bit more time to think.

6. Choose quality over quantity

Mindful spending isn’t always all about saving money, but about making the most of your cash and spending with consideration.

Splashing out on lots of low-quality purchases might mean you’ll have to replace or upgrade sooner. It may be more cost-effective to invest your money into fewer, high-quality items instead. This approach might not necessarily save you money in the short-term, but it may well offer greater long-term value.

You could also work out the ‘cost per use’ before you buy, dividing the cost by the amount of times you’ll use the item over six months or a year. You’ll soon work out which purchases will provide genuine value to your daily life, versus the products that will likely get very little use.

7. Remember that 'value' means different things to different people

A cup of coffee might not mean much to you, but to someone else that could be a treat they really look forward to all week. Lunch out with colleagues might seem like an unnecessary expense – but remember that you’re not just spending money on food, you’re spending it on the experience of connecting with others.

When you spend mindfully, it’s up to you to decide what’s important to you. And that includes spending money on things that bring you genuine joy.

8. Identify your spending triggers

Do you tend to spend when you’re feeling down, stressed, bored, under pressure? Are you more likely to go over budget when you’re browsing online or shopping with friends?

Take some time to identify when you’re most likely to spend without consideration. For example, are you most likely to go over budget on clothing if your friends have just bought the latest gear? Or do you tend to order takeaways if you’ve had a stressful day at work? Understanding your spending triggers can help you to recognise and avoid temptation in the future.

9. Reduce temptation

Passive browsing can quickly lead to impulse purchases. If you’re determined to only spend when you have a specific need, unsubscribe from promotional emails and challenge yourself to stop browsing online stores. This way, you won’t be tempted to make ad-hoc purchases.

If you regularly spend online, you might find it helpful to remove your credit card information from your Autofill. This encourages you to input the information manually, giving you a bit of time to think about your purchase and whether it aligns with your spending goals.

10. Use cash to help increase awareness of your spending

It’s all-too easy to whip out your card when you hit the high street or browse online. Using cash can help you really feel the impact of a transaction. In fact, studies show that paying in cash doesn’t activate the brain’s reward system in the same way that paying by credit card does, so we naturally spend less when paying with cash.

You also won’t spend more than your budget if you only take a set amount of cash with you.

5 benefits of mindful spending

1. Encourages you to reach your goals

By being more intentional with your money, you’re less likely to overspend on unnecessary purchases. This could help you to save more, taking you one step closer to reaching your goals.

2. Improves your financial management

Get into the habit of mindful spending, and your finances will thank you in the long run. You might be surprised how quickly you get used to sticking to a budget and tracking your spending.

3. Reduces financial stress

Following clear saving and spending goals takes away some of the stress associated with decision-making. You’ll know exactly how much you can spend each month and, armed with mindful spending techniques, will make the most of it by only buying things that you’ll truly value.

4. Boosts wellbeing

Knowing you’re in control of your finances can reduce anxiety and improve your overall sense of wellbeing. Most of us know how it feels to regret an impulse purchase, or to worry about staying on top of finances. Mindful spending can help you to keep your finances on track, while only buying things of real value can increase overall purchasing satisfaction.

5. Helps you spend more sustainably

Mindful spending encourages you to only purchase what you need rather than buying things that’ll end up either being thrown away or languishing in the back of a cupboard. This, in turn, can reduce waste and contribute to a more sustainable lifestyle.

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