6 Simple Rules on Spending Money Intentionally

Many people ask themselves whether they should spend money on item X, trip Y, or experience Z. They base their decisions on their current mood, their general purchasing habits, and the item’s price. These elements all work on an individual level, but they don’t form a genuine spending culture. If you want to establish a personal consumption system, you need spending norms. On this basis, here are six simple rules on spending money intentionally. 

Spending money is a double-edged sword. 

On one side, we hate to see our bank balance dwindle, and we don’t like to splash our hard-earned cash. On the other hand, we love the products, experiences, and services that money can buy. 

We want to treat ourselves, but we also wrestle with our inner frugalist. 

That’s where intentional spending comes into play. 

By designing a set of well-tailored spending norms, you learn how to spend your money on the right things at the right time. You don’t feel like you’re wasting money, and you stay within your budget. 

As such, personal rules can help you decide whether you should buy that new pair of sneakers or not. They can bolster your financial health and also make your money go further. 

In short, intentional spending rules can help you master your finances.

6 simple rules on spending money intentionally  

The following are six spending rules that you can apply for small and large amounts. They work in every context and offer enough flexibility to suit your lifestyle. 

Skyline of London - simple rules on spending money intentionally
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1. Happily exchange money for value 

The first rule of intentional spending is that you shouldn’t spend money on goods, services, or experiences. You should exchange money for value

As such, you change the definition of your purchases. Instead of defining an item by type, you define it by value.

What kind of value? 

The term “value” has various meanings in the context of intentional spending. 

First, we have the item’s monetary value. This value can decrease – like the value of a car,  increase – like the value of a house, or remain stable. 

Next, an item can add practical value to your life. When spending money on something, ask yourself how it will improve your life in practical terms. 

Finally, purchases can have psychological or sentimental value. 

A romantic getaway with your partner might not have monetary or practical value, but it will strengthen your bond and provide sentimental value. 

Identify a specific purchase’s value. If there is none or not enough, rethink the purchase. 

2. Long-term value trumps short-term value 

As a general rule of intentional spending, it’s best to prioritize long-term value over short-term value. 

Don’t get me wrong. Short-term value can offer temporary surges of happiness and great memories. An exquisite bottle of wine will disappear after you drink it, but the occasion could spawn fond memories. 

Nevertheless, short-term value creates the risk of spontaneous spending. And spontaneous purchases often break your budget and spending rules. 

In this context, short-term value and spontaneous purchases work as long as they remain isolated exceptions. 

Once they become the norm, however, they will turn into blind spending habits, the opposite of intentional consumption.

Consequently, most of your purchases should provide long-term value. 

As an example, if you buy five low-quality coats every year, you’ll spend the same amount as you would on one long-lasting, well-made down jacket. 

The former are price-worthy, good-looking, and you like their style. 

However, because they aren’t as well-made as their more expensive counterparts, you’ll have to replace them every year. They provide short-term value and create a cycle of spontaneous spending. 

With a more expensive, high-quality jacket, on the other hand, you’ll be set for years – a perfect example of long-term value as a result of deliberate spending. 

3. Always maintain a balance between regular consumption, extraordinary purchases, savings, and investment 

The most effective rules on spending money intentionally undoubtedly also concern the relationship between consumption, savings, and investment. 

If you’re a newbie, use the simple 50-30-20 method. This well-known budgeting system has become more and more popular in recent years and consists of the following: 

  • Spend 50% on “Needs” like housing, utilities, and groceries.
  • Spend 30% on “Wants” like fashion, events, and dining out.
  • Spend 20% on savings and investments. 

The 50-30-20 method gets a lot of praise because it’s simple and straightforward. You don’t need to be a finance expert to divide your monthly expenses into three categories. 

When it comes to intentional spending, the main challenge resides in mastering the sections. 

Once you know where your money is going, you’ll make informed decisions, and design your budget with intentionality in mind. 

4. Purposeful consumption cannot be measured in bare numbers 

In the world of budgeting, numbers are crucial. You need to know how much you spend on certain goods, and how it affects your budget.

In terms of intentional spending, on the other hand, bare numbers don’t tell the whole story. 

Consequently, if you want to learn prioritization and minimalist consumption techniques, you need to look beyond the sheer numbers. 

Numbers don’t always indicate value, and they often omit a purchase’s longevity. 

As an example, a smartwatch might be cheaper than a household-name mechanical timepiece. 

The smartwatch might offer a lot of practical value at the moment because its technology is currently unrivaled. 10 years from now, however, the smartwatch will be hopelessly outdated. 

In contrast, the mechanical watch will stand the test of time and retain its practical and monetary value. 

5. Rules are important but not immutable 

Intentional spending rules should form a mental framework for your spending decisions. They are the foundation of your spending habits, but they shouldn’t be immutable. 

As such, minimalism only works as a long-term lifestyle if your self-defined spending rules offer flexibility. 

Why? Because your priorities can change over time, and so should your spending norms. In your 20s, you might spend most of your money on travel, parties, and experiences. 

In your 30s, on the other hand, you might have a family, and encounter novel commitments. 

Your spending rules should forge a strong budgeting mind that can guide you through the various stations of your life. 

Consequently, the essential point is to develop healthy spending habits and adapt according to your lifestyle. 

6 Simple Rules on Spending Money Intentionally - woman sitting on lake
Picture by Simon Migaj / Unsplash

6. Your money will come back, your time won’t

Finally, always keep in mind that money is a recurring resource. Time, on the other hand, is not. 

In the last few years, my biggest expense was travel. I spent most of my disposable income on flights, Airbnbs, hotels, and experiences. 

As a digital nomad, I had the fortune to visit over 50 countries and to live in 10. 

I naturally couldn’t save as much as other people, but I don’t regret my decision. 

As we all know, 2020 was a great time to take a break from traveling and refill our bank accounts. 

When I look back at those years on the road, I applied all my rules when it comes to spending money intentionally: 

  • I spent most of my money on travel because, in my mind, it provided the most value.
  • I bought high-quality travel gear that will be useful for many years to come. 
  • On the road, I applied a personalized form of the 50-30-20 rule. 
  • In some countries, experiences cost more money without providing more value – illustrating the rule that the numbers only tell a fraction of the story. 
  • I treated myself to some experiences that weren’t in my budget but became spontaneous memory builders – highlighting the importance of flexibility. 
  • In 2020, I was able to save and invest more. The money I “lost” by traveling extensively in 2019 came back. The time on the road, on the other hand, will always be a memory, but never a recurring commodity. 

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