2 Ways to Change your Relationship With Spending Money

2 Ways to Change your Relationship With Spending Money

This post may contain affiliate links, which means I might make a small commission at no additional cost to you.

Today’s post is part 4 in a Rockstar Finance series that is reviewing the book Your Money or Your Life (YMOYL). The other chapters are located here, with the last chapter review here.

I’ve been re-reading YMOYL and love the chapter on analyzing your spending emotionally.

Step 3 in Vicki Robin’s book focuses on mindful spending and saving, rather than following a rigid set of rules like a budget or what society has deemed to be normal spending.

Does Spending On The Item Bring Actual Happiness?

You need to identify what you actually need versus spending on things that don’t actually make you happy. If it doesn’t make you happy, why are you actually doing it? I’m guessing because of habit.

YMOYL concentrates on being mindful of the psychological reason why you spend money, realizing when you do so, and finally weakening and eliminating that urge over time.

In essence, you’re doing this chain of reactions:

Cue ——> Routine —–> Reward 

It’s called the Habit Loop, and it was popularized in the book The Power of Habit.

We can use this technique to curb our spending by analyzing our behavior. For each thing you spend on, ask yourself what the cue was.

Do the below actions sound familiar for impulsive spending?

  • Ordered Seamless because you didn’t meal prep on Sunday, so after a long day of work you got lazy and ordered takeout.
  • Bought a coffee because you were restless at 2PM instead of just going for a walk around the park.
  • Went shopping because you had a bad day and wanted to make yourself look pretty.

How Do You Stop Your Impulsive Spending Habits?

Step 1: Figure out what the cue for your spending is. Emotions that could cause spending consist of Anger, Boredom, Hunger, Laziness, etc.

For most of the day you can resist these emotions. Fresh out of bed for the day, you can ignore the sizzling bacon and then the whipped cream blended drink when you’re on a diet. As the day goes on, your willpower wanes and you consider eating something delicious but unhealthy. The same analogy applies to spending. Your brain’s willpower muscle can resist spending for most of the day. Once you’ve used up your willpower muscle, your spending brain starts to come out.

There have been studies on how willpower is actually a mental muscle and that it gets weaker as the day goes on. It’s why you’re most likely to get a sugar craving and go online shopping late at night. You’ve had a hard, long day at work and once you’ve gotten home your willpower muscle is probably all used up. Prepare your evenings in advance so you’re not spending money once you get home.

Step 2: Replace the current routine with another one.

If you find you’re spending money at certain times of the day or after a certain event, prepare another routine in advance so you can replace your bad spending habit.

If you’re spending money every night ordering food, start cooking on Sunday and meal prep so you can have food for the entire week.

If you’re getting coffee every day at 2PM, consider bringing a thermos to work for much cheaper coffee you’ve pre-made at home.

Step 3: Track the number of days with a good habit so you can keep the habit.

Keep track of every day you’ve managed to not do the bad habit. It’s said that 28 days is how long it takes to create a new habit, so keep on it for 28 days! Print out a calendar for the next 28 days and cross out each date you’ve managed to keep a good habit.

Non-Impulsive Purchases: The # of Hours of Work Needed To Purchase It

Another way to change your mindset of spending is to figure out how many hours of work you’ll need to purchase something.

You’ll need to calculate your actual hourly salary. People often overestimate their hourly salary because they don’t include the time to commute to their job. They also don’t factor taxes into their salary. You don’t get paid 100% of your salary — a large chunk is taken out due to taxes.

Hourly Salary = ((1-Tax Rate)*Salary)/(hours worked + commute time)

For example: If there are Bruce Springsteen tickets that are $150 and you make $16/hour with a 30% tax rate, is it worth nearly 13 hours of work to watch that concert?

There’s no right or wrong answer, as long as you are aware of how many hours you’ll have to work to pay for an experience or object.

Here’s a quick calculator to see how many hours of work are necessary for your next big purchase!

Do you have any other good tips for cutting spending? Have you ever read YMOYL?

If you haven’t entered the giveaway for a copy of Your Money or Your Life + The Power of Habit, you can click here to enter.

Author: Olivia

Olivia worked in finance and wants you to learn the secrets of financial independence. She believes there are so many ways to monetize your life and make money doing the things you're already doing because so many companies offer free money.

The average savings account rate is 0.1%. The big banks have incredibly low savings accounts rates. CIT Bank offers a 1.75% savings account. You can open an account with just $100 and no monthly fees or charge . Tired of being charged fees and getting peanuts in interest at your current bank? Open a CIT Bank savings account in less than 15 minutes online.

If you have a car, Rideshare apps allow you to pick a direction you want to go twice a day, so you can get extra money going somewhere you were driving to anyway at least twice a day. Get a $300 sign-up bonus with Lyft.

One of my favorite ways ways of monetizing my life is via credit card bonuses with cards that give you cashback or rewards. Check out our review of the Chase Sapphire cards, which give you at least $500 in cash or $625 in travel credit.

10 thoughts on “2 Ways to Change your Relationship With Spending Money

  1. “Bought a coffee because you were restless at 2PM instead of just going for a walk around the park.”

    OMG this is EXACTLY why I got into the habit of going to pick up lunch every day at work. I’ve substituted it 100% with just going for a walk around the block, and I hardly even miss the food (even though we do have some awesome restaurants around here). The routine was 95% about the walk, and 5% about the food in terms of happiness.

    1. Awesome! And I’ve found the same! It’s the mentality of getting bored so you have to “do something”. A walk, a chat with a co-worker, some meditation, etc. Replacing your spending habits with something good is awesome :).

  2. Building good habits is the way to go. It’s like going to the gym. I go exercise at 10 am everyday now and it’s a habit. I don’t have to think about it.
    The less you think about it, the better. Get rid of those bad habits and replace them with good routine instead.

    I didn’t enter the giveaway. I read those books already and they’ll be more useful to other folks. Great books.

    1. That’s awesome!

      Build habits so you don’t have to think, then use your willpower muscle to get through the rest of the day :).

  3. I think establishing good routines is key to achieving Financial Independence, but that could just be my personality type. I often hear that having routines makes people feel too robotic, and I can sympathize with that. But for me, if you focus on making each and every day different and unique, that lends itself to having bad habits and not doing the things that are important, such as working out and eating healthy.

    1. I think working out and eating healthy are awesome habits to have! Maybe people can strive for a bit of variation in non-paid activities or activities that might not be detrimental in the long run?

  4. Hourly Salary = ((1-Tax Rate)*Salary)/(hours worked + commute time)

    Math is so depressing. For the lazy like me, it’s basically $1=.70 cents. I figured that mental hack out by myself when I was working in the IT lab (it was like a 7 your shift alone with my mind) at university and it made me more money conscious instantly.

  5. Great article. I like to think of my purchases in terms of opportunity costs. I wrote about it a few weeks ago but in short, what would that cup of joe be worth 15yrs from now invested at market rate? How many cups do you have a day? A week? What financial goals / responsibilities do you have 15yrs from now? College? Retirement? FIRE? When you run the numbers it is frightening to see how much we “give up” to support simple habits. Many moons ago I was a drinker and smoker. Wow. I’d probably be retired now if I hadn’t kept up those habits for so long. That said, I’d also never have met my wife so… I’m good with my decision 😉 My point is that I totally agree with you. Find a way to look at the “true cost” of your intended purchase and ask, “Is that worth it?” – Thanks for the post! – FS

    1. Great way to think about it! Glad to hear you are being healthier and have stopped those bad habits and saved more money!

Leave a Reply

Your email address will not be published. Required fields are marked *

Author: Olivia

Olivia worked in finance and wants you to learn the secrets of financial independence. She believes there are so many ways to monetize your life and make money doing the things you're already doing because so many companies offer free money.

The average savings account rate is 0.1%. The big banks have incredibly low savings accounts rates. CIT Bank offers a 1.75% savings account. You can open an account with just $100 and no monthly fees or charge . Tired of being charged fees and getting peanuts in interest at your current bank? Open a CIT Bank savings account in less than 15 minutes online.

If you have a car, Rideshare apps allow you to pick a direction you want to go twice a day, so you can get extra money going somewhere you were driving to anyway at least twice a day. Get a $300 sign-up bonus with Lyft.

One of my favorite ways ways of monetizing my life is via credit card bonuses with cards that give you cashback or rewards. Check out our review of the Chase Sapphire cards, which give you at least $500 in cash or $625 in travel credit.