Video: How to increase your mindful spending

Video Transcript:

Hi, my name is Edwin and I'm your financial wellness coach and today's topic is going to be about mindful spending. 

We're going to dive into how taking control of the way you spend your money impacts your financial well-being. But, before we get there we have to first put ourselves in a scenario to see how much it applies to you personally. Do you ever find yourself avoiding looking at your banking account at the end of a long week? If you have done this before, then you might want to consider taking stock of the things that you are spending your money on. 

Mindful spending is simply understanding exactly where all of your money is being allocated or in essence tracking every single cent that you're spending. The way we achieve mindful spending is by not shying away from those expenditures that we that we've done in the past. What we're simply trying to do is track the way this is done, so if you do find yourself shying away from your bank account, a recommendation that I have for you is to create a spending journal. 

A spending journal is a way to track your transactions or purchases for a 30-day period, and simply take pen to paper to make sure that you don't miss a single transaction because what you want to do at the end of that 30-dayS is take a look at your own handwriting and have an eye opening experience where you notice exactly where your money is going. By doing this exercise, what we can begin to do is highlight the areas where we might be spending a little bit too much, and maybe rein in some of that spending. If you find this exercise helpful, a way to apply it at a mass level, is to think about using a cash flow calendar.  

A cash flow calendar is a simple tool that allows us to see where we will allocate our money for the next year. To begin, estimate your income for a 12 month span and divide it over individual months. Then, estimate your expenses for the next 12 months including those expenses that are not just on a monthly basis. Simply put, what you want to do is look at all your income and subtract out all of your expenses. A recommendation that I have for you is to overestimate any expenses that you're estimating and underestimate any income that you're you're accounting for. That way, you don't count money that you don't necessarily have. At the end of this exercise what you want to do is subtract out your total income minus your expenses. What this will do is it will allow you to see which months you have more money on hand that you can allocate towards savings, or which months you might be spending more money than you're earning. In doing this exercise, we can start to get control of the way we use our money and seeing if we include all of our fixed and variable expenses where we have the opportunity to cut back on some of our unnecessary spending. 

Mindful spending isn't about restriction, it's all about having control about where your money is going. A final step that you can take in the cash flow journal is to see what happens throughout the next year. As you're seeing your estimates to what you're actually spending your money on, write down where you see big differences at the end of the year. When you look back on this cash flow calendar, you will be able to see exactly what type of budget you have for yourself. Again, mindful spending is all about being purposeful and intentional with the way we use our money by creating a cash flow calendar or a spending journal. What we are doing is now allowing ourselves to take control so that we never neglect our bank account again. 

Thank you for joining us today my name Edwin and this conversation has been about mindful spending.

*This content is intended for general information purposes only. It is not intended to be relied upon and is not a substitute for professional financial advice based on your individual conditions and circumstances.