Spending with purpose is a conscious effort to use your money for things that actually matter to you. So, bye-bye willy-nilly spending and random Amazon packages showing up at your doorstep. And, hello spending on what brings you happiness and gets you closer to your goals.
In other words, shifting out of autopilot spending, which we’ve all been guilty of over the prolonged pandemic, and into complete spending consciousness. And, the great news is you can start spending with purpose TODAY!
Put purpose-based spending into action daily
First, make up a budget for the month ahead — and yes, this means thinking proactively rather than reactively. Second, add spending that helps you and your family be well (fitness, mental health support, healthy eating, education and so on). Third, cut anything that’s not filling your cup (sorry, you still have to pay your mortgage and utility bills!). Finally, make your purposeful budget balance so that the money you spend matches what you earn and nothing more; this will keep you out of debt while putting each dollar to work.
Now, does your budget make you a bit happier, knowing you haven’t wasted any of your precious resources on things that just don’t matter? It should.
Take it to the next level
Spending with purpose can also mean helping others, or using your money for social good. For example, this could be straight-up donations or focusing your spending on local businesses or businesses that give a percentage of their profit to support agencies and activities that have a social impact.
If you’re ready for this step, add regular giving to your budget (be sure to get a tax receipt), and start thinking about what you’re buying and from whom (where that pair of jeans is manufactured, for instance, and whether the workers are paid fairly and work in safe conditions) and whether you can make a difference based on where and what you buy.
Invest with purpose
Also known as socially responsible investing, this means consciously eliminating any investments in businesses or funds that have a track record of poor human rights, harm to animals, sketchy business practices, environmental degradation or are involved in arms, drugs or alcohol production.
Your investment advisor, if you’re working with one, can align all future investments to stocks, bonds or funds that are socially responsible. Decades ago, socially responsible investing wouldn’t keep pace with the market rate of return, but that’s just not the case anymore. These portfolios are keeping up, and some are even beating the market.
Make a purposeful financial plan you love
Be different from the 90 per cent of the population who don’t have comprehensive financial plans.
Purposeful financial plans contain a planned retirement date, an approximate size of your nest egg and what you think you’ll spend on a monthly basis. It can really help to work with a professional to make your plan, rather than trying to DIY it.
Finding financial focus, and purpose for your money, is going to bring you peace of mind and more money.