One of the most powerful things a person can practice is being intentional with their money. If you’ve read any content in the personal finance sphere for a while, you’ve undoubtedly come across a litany of basic personal finance advice. Have a budget, spend less than you make, have an emergency fund… yadda yadda yadda.
Those are not bad pieces of advice. A budget is important, absolutely, but I think if you are intentional with your whole approach to finances, you can naturally solve many of the behavioral financial hurdles many people experience.
Related: My No-Budget Money Strategy
Here’s the thing with intentionality – it’s not about judging what you spend, it’s about making space (and money) available for what matters most to you. What that means is different for everyone.
For example, one of my top priorities is spending time with my kid and my family. I make intentional financial trade-offs because of it. But that is ok to me. Someone else may make a different choice and that is ok for them.
The hard thing about being intentional is there are often many forces working against it. Bad habits, advertising, influences of friends and family who think differently or don’t understand your goals. Being intentional with your personal finances means being true to yourself and your goals.
As you embark on your intentional financial journey here are seven things for you to keep in mind:
1. Understand that every financial decision you make is a choice
Where you live, the car you are paying for, the last take-out meal you paid for, your grocery bill, your clothes, even your recurring electric bill are all reflections of choices you have made. To be intentional, you have to recognize that you are in control and are capable of making different choices if you want to.
Every financial choice you make is also a sacrifice. When you say yes to spending money on one thing you are saying no to something else. Being intentional is about making sure you are saying yes to the most important things.
2. Know your goals
Where do you want to be with your financial life in 1 month, 1 year, 10 years? How aggressive do you want to be with meeting that goal? What trade-offs are you willing to make? If you want to meet it sooner, you may have to make different choices (See #1). This is where intentionality can help, you just have to articulate what is most important to you.
3. Examine your culture and your influences
Your life is constantly influenced by the people and the influences around you. Whether you like it or not, these will often have strong influences on how you spend your money. That’s not necessarily good or bad, but it’s just something to be aware of.
4. Stop comparing yourself to others
Once you’ve identified your influences, eliminate the negative ones. I’m not saying you should cut people out of your like (unless they’re truly toxic) but decrease the number of opportunities for you to compare your life to others. Focus on making structured changes in your life for this rather than relying on willpower alone.
For me, that required cutting down on my social media use and using an app to set limits on my phone. For others, that may require limiting the amount of time you spend with certain people or trying to find new friends who support your goals.
5. Know your money vices
These are the things that you spend money on that don’t bring value to your life.
One example for me is fast food. There are days when I’m lazy and don’t want to cook so I get fast food. But then I immediately regret it because it doesn’t taste great and I feel like crap. Other vices may be regular splurges that you could do without or impulse purchases. Do you shop when you are dealing with something emotionally or because you actually need what you’re buying?
To overcome these vices you first have to acknowledge them. Once you recognize them, then you can take steps in your life to structure things in a way that helps you avoid them. For example, I now keep a supply of frozen pizzas and crockpot meals handy for those days when I may not want to cook.
6. Know what you value
This is the natural counterpart to the vices section. Intentional spending is about making space for what’s most important, so you have to know what that is for when space opens up.
If you have articulated what you value most ahead of time, then when it comes time to make a spending decision, you will be ready to make choices that are in line with what you value most.
Vices and values are deeply personal. What may be a vice to one person may be really important to someone else. It’s not my place or anyone else’s to judge, but it does require that you think critically about each purchase you make and ask whether it brings value to your life and whether it is helping you achieve your overall life goals.
7. Take one intentional action at a time
It can be overwhelming to think that to live intentionally you have to just start tomorrow and be good at applying it to everything. That’s a surefire way to fail.
Start by taking one action at a time. Do it long enough that it becomes a habit. Then try with something else.
There is no prize for doing this faster than anyone else, the only goal is to help you create a life that leaves you most fulfilled and satisfied. Remember, when trying to live intentionally, it is not your job to make others understand or agree with you. Your only job to be true to yourself.
If you want to learn more about intentionality, check out my Busy Person’s Guide to Living a More Intentional Life.