3 Tools to Feel Great About Spending Less

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Personal finances can be daunting. But what if you could feel happy when you spend hard-earned cash? Manisha Thakor, author and director of wealth strategies for women at The BAM Alliance, shares three easy tips for managing your money.

By Manisha Thakor

Budgeting. There, I said it. How did that word make you feel?

If you are like most people you found yourself tensing up and feeling resistance. What if I told you there was another way to manage your cash flow, one that works with (not against) the flow of the universe. Would you be interested in learning more?

Joy-based spending is the process of acknowledging that for most of us, money comes into our lives because we—or someone near and dear to us—worked hard for it. So when we spend our money, what we are spending is, in essence, “life energy.” (To learn more about this concept, I recommend reading the seminal personal finance classic on this mindsetYour Money or Your Life by Joe Dominguez and Vicki Robin.)


Take this notion a step further, and managing our cash flow becomes a practice of mindful and conscious spending instead of an exercise in denial and deprivation. Spending becomes a way to honor your life energy.

Here are three tactics to put the concept of joy-based spending to work in your life right away.

Tactic 1: The Highlighter Test. It works like this: for as long as you can write down everything you spend money on. A week is ideal (longer is even better) but if all you can do is a day or weekend, start there. You don’t need to get fancy-schmancy. A simple notebook to jot down “Groceries - $117, Electric bill - $58, Happy hour with Jack & Jill - $34" will do.

At the end of the period, whip out a highlighter in a cheerful color. Highlight anything you spent that did not bring you joy. You might start with something “boring” like that electric bill. Here's your chance to negotiate a better deal or reduce/alter your usage. But then the fun begins: think about those drinks with Jack and Jill. Did you find yourself uplifted to be around them? If so, great—money well spent. But many of us will find we are spending money on meals that drag us down or lessons for our kids that they don’t even want—or that we don’t want to carpool them to.

The point is this: there are no item-specific judgments about what’s “right" or "wrong” to spend money on. Instead, your ruler is joy—however you define it. I get enormous joy out of a $5 latte that can last 2-3 hours over a good book in a coffee house, making my hourly rate of enjoyment pretty affordable.

Tactic 2: The Hourly Wage Tool. Most folks devote around 2,000 hours a year to work-related activities (once you factor in commuting, etc.) That figure equates to essentially 40 hours a week for 50 weeks a year. Suppose you have a household income of $50,000 before taxes. Divide $50,000 in income by the 2,000 hours it took to earn it and you get $25/hour, before taxes.

Now, the next time you see something you just have to have that costs $250, you can do the math. Ask yourself if at $25/hour (before taxes!) it’s worth more than 10 hours of life energy. The answer may be yes or it may be no. The important thing is that now you have a ruler that is much more holistic in nature.

This is a highly effective tool to use with children as well. Depending on their age, you can use a relatable hourly wage to help them understand how much life work goes into purchasing that “must-have" item they feel they cannot live without.

Tactic 3: The Funny Mirror Tactic.  This last tip is rooted in the age-old human tendency to compare ourselves to others. Alas, this trait has entered potentially dangerous waters in our modern era. Much of the media we consume is highly staged and stylized. Take your average police, legal, or medical drama—have you noticed that even when these shows take place in hot, humid cities in August, there is never a woman who shows up with frizzy hair? Every policewoman, paralegal, and doctor has a fresh blow out and mani-pedi before showing up to her 7:00 a.m. shift. How realistic is that? Not very.

The false images are not limited to TV shows. We get them daily in our social media feeds. Very few people share images from spring break of the kids having a meltdown or mom and dad exhausted and rumpled. Instead, we see the one beautiful, blissful moment on the beach when all was peachy. And then most of us beat ourselves up that most of our vacation didn’t "look right."

The trick here is to ask yourself—how realistic are the lifestyle images you are observing? Could you be looking in a "funny mirror?” Many of our spending decisions are driven by unrealistic comparisons and social expectations, which this tool can help reverse and make us feel more comfortable in our normal, affordable lives.

Taken together, these three tools can help put the joy and satisfaction back into your budgeting—starting right now!