By Kevin Gibbons
We’ve written before in our article Swipe – Go – Not Know about how hard it is to realize the value of the money we spend on our purchases. With the myriad ways available to us to buy products and services, it is so easy for the purchase price to be an abstraction, rather than related to the actual cold hard cash that you had to earn to pay for that purchase.
One way to keep the concept of price and cost real is to directly relate it to something you can physically grasp and easily understand. Hence the title of this article. The next time you think about spending money on something, ask yourself, “how much beer would that buy?”, “how many gallons of gas for my car is that?”, “how many manicures and hair styles does that represent?” or “how many weeks of groceries is that?” Whatever frame of reference resonates with you.
The idea is to consider potential purchases, not as abstract “I want this so I’ll slide my card through the reader” ideas, but as real, material exchanges. Products and services cost money. Every purchase you make consumes some amount of your valuable resource, that is now not available for another purchase. This does not mean you should be afraid to buy anything. It means that you should look at each purchase and make the conscious, mindful decision that that purchase is worth the money it costs, to the exclusion of other equivalent purchases. Quite simply, if you get in the habit, before making any purchase, of asking yourself, “Would I rather spend my money on this or something else?”, you will be making mindful decisions.
This is the core of the Savvy Life Philosophy: saving on things that are not as important to you so you can spend on those things that are important to you. We are just expressing it here in very concrete terms and choices. So, pick a frame of reference that is important to you. It can be anything. Just as long as you know the cost of the item or service and it is important enough to you that, when a potential purchase is expressed in terms of that item, it will cause you to stop and think if that purchase is really how you want to spend your money. If it is, and you can afford it, then go ahead and buy it. If it is not, then keep saving your money for something that is more important to you.
Mindful, focused spending is a core component to a sound financial life, and is one of the core Savvy Habits we teach in our book Living the Savvy Life, webinars and one-on-one coaching. By putting this idea into practice, you can reduce clutter, fill your life with things you truly love and value and be confident that you are spending your hard-earned money wisely.