A few weeks ago, I met an interesting woman. Our conversation was a little slow until she asked me what I did for a living. When I replied, “I write about money,” her eyes lit up.
She had recently turned 60 and just like any good milestone birthday causes you to do, she had spent time taking stock of her life. She was eager to dispense life advice to a younger, captive audience (me).
Over a few glasses of red wine, she rattled off her nuggets of wisdom, which included marrying a younger man and:
“I’ve learned a lot about money so far in my life. But the most important thing I’ve learned is how to take care of it. There are a few things you need to be vigilant about in life: how you spend your time, how you stay healthy, and how you spend your money. No one will take care of these things for you. In fact, our society is set up to take these things from you if you’re not careful. If you don’t protect your time, someone will always be there demand more of it. If you don’t protect your health, there will be more processed food and sweets finding it’s way into your shopping cart. And if you don’t protect your money, your social circle and savvy marketers will dictate how you spend it.”
These are things we all know, but hearing her lay them out like that was a welcome reminder.
Obviously, we want to be the ones to dictate how we spend our own money. But if you’re stuck with some less than stellar spending habits, how do you start to make a change?
Willpower isn’t the answer
I don’t put a lot of stock into willpower. It’s not that I would fail the marshmallow test (though I probably would). It’s that whenever I’ve tried to do something with sheer willpower, I’ve eventually failed. If I bake a full batch of brownies, I’m not going to have just one. If I say I’m going to work out after Henry goes to sleep for the night, there are somehow 854 things that I need to do instead. And if I declare that I’m going to stop spending money on something, I can stick to that plan for a short time before I decide that it’s depressing and restrictive and revert to my old habits.
If I want to have more control over my time, my health, and my money, willpower, it seems, is not the answer. Studies have shown that willpower is rarely a sustainable option. Resisting temptations takes a mental toll. Willpower might be just like a muscle: it can get fatigued from overuse.
So yes, there’s a reason you eat healthy all day just to succumb to a pan of brownies after dinner.
If willpower isn’t the answer, you might just need to create new habits and new systems to replace your old ones.
It’s still a work in progress, but I have a lot of healthy spending habits and systems that I’ve worked to cultivate over the years. Here are a few that have made the biggest impact:
Automate your system
This is similar to the idea that if you don’t buy junk food, you won’t be tempted to eat it. If I automate money and put it in my savings and investment account, I won’t be tempted to spend it. I’ve written about this before, but it’s my solution to budgeting (or not budgeting). And it just works.
When I get paid, I send money immediately into savings and investment accounts, and then I’m able to spend what’s left over if I choose. Willpower isn’t an issue when my money automatically takes care of itself.
This is a weird one, but go with me. I studied econ in undergrad and during one of my classes I learned about utility maximization, which can be thought of as: How do you get the most amount of joy or satisfaction from each dollar that you spend?
I had forgotten about this concept until I was struggling with paying off my student loans. I was feeling a little deprived trying to throw every last dollar at my loans. All of a sudden, I remembered the idea of utility maximization. Rather than cutting things out of my life, I should focus on filling it with only things that brought me the most amount of happiness. Does buying that new water bottle from Target bring me the most joy? (Hint: it does not). Does going to a pilates class with my favorite instructor bring me the most joy? Yes, it does.
Rather than using willpower to curb my spending, I direct my dollars to the things I enjoy the most. I got the same result — I spent less — but without the feeling of deprivation.
“Find three hobbies that you love: one to make you money, one to make you creative, and one to make you healthy.”
One of the best things I’ve done to curb spending is to focus on hobbies. Who has time to recklessly spend when they are busy doing things that they love? I used to spend so much time focused on work that any downtime I had was spent perusing aisles, shopping online, or grabbing mediocre takeout to go home and watch in front of Netflix because I was too exhausted from work to do anything else.
A year or so ago I found this quote and decided that maybe, just maybe, if I had hobbies to look forward to, my energy levels and my spending patterns would change. Spoiler: they absolutely did.
My hobby to make money is writing on this site. My hobby to keep me healthy is a mixture of long walks, yoga, pilates, and 20-minute partner workouts with Jordan. I still haven’t settled on a consistent hobby that keeps me creative, but I’m on the hunt (accepting any and all suggestions).
Now any naysayers out there may say, “But Erica, hobbies cost money. That pilates class isn’t free.”
You’re right. But this article isn’t about not spending any money. It’s about changing and controlling your spending habits. If I can spend money and time on the things that I love, I’m less likely to waste my cash on things that don’t matter.
And not all of my hobbies require cash. Those long walks that I take? They’ve replaced the weekend brunches that Jordan and I used to do. Do I miss those brunches? Nope. I’m too busy enjoying my new hobby.
THE LATEST & GREATEST
“Don’t you dare undervalue yourself. Just because one person is trying to get a bargain basement rate, doesn’t mean that’s what you’re really worth.”
Faced with a hard situation at work, this woman leveraged her story of loyalty to get a promotion and a raise that almost doubled her salary. Really.
After a failed attempt at negotiating, this grad student approached the situation differently and learned a valuable lesson: don’t waste your time asking for something the other person can’t give you.
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