7 Ways Intentional Spending Can Help You Reach Your Financial Goals

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There’s no one correct way to manage your money and reach your financial goals. But, if you’re struggling, there is one concept that might help: intentional spending.

Intentional spending is the concept of being thoughtful and mindful of your financial habits, according to Deeksha Susty Beeharry, a CFA and portfolio risk manager. “It is prioritizing expenses or investments that are truly important to you and correspond to your core values or long-term goals.”

In other words, it’s the opposite of spending impulsively or taking a passive role in money management. 

“Intentional spending can help you get closer to your financial goals as you prioritize your spending, make conscious choices, create a budget and allocate money toward the things that will help you achieve your goals,” Beeharry said.

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After all, she added, if you have no idea where your money is going, you can find yourself with a bigger hole in your wallet

Intentional spending probably sounds great in theory. So how can you put it into practice? Beeharry shared several ways to incorporate intentional spending into your life.

Watch Out for Impulse Buys

With the many discounts, coupons and seasonal deals out there (hello, Nordstrom anniversary sale), it can be easy to get swayed into spending more than you intended.

“But being intentional about your spending requires you to think if you really need to buy an item or whether it aligns with your values or long-term goals,” Beeharry said.

So, before heading out to a store or browsing online, make a list of what you really need/want and stick to it.

Enforce Spending Limits

Another way to curb impulse spending is to set limits ahead of time.

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For example, if you tend to indulge in activities like going out to nice restaurants, shopping or hitting the movie theater, it can help to set a weekly or monthly cap on spending for these activities. That way, you can still do what you enjoy without worrying about wrecking your budget.

Set Financial Goals

When you have a goal in mind, it can be easier to keep your spending in check. Whether you want to pay off debt, save for college or put a down payment for a house, get clear about your priorities and put a plan in place to reach them.

“This can help you stay motivated and focused, as well as make faster progress toward your goals,” Beeharry said.

Create a Budget

Tracking your income and expenses helps to make sure you’re allocating enough money toward your financial goals. There are many budgeting methods, so choose one that suits your style.

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Beeharry said the 50/30/20 budgeting rule can be helpful if you’re looking for a simple way to make sure your necessities are covered, with room for discretionary spending, too.

She said, “Remember that this rule is merely a guideline that can be modified depending on your unique financial circumstances and aspirations.”

Pay Off High-Interest Debt

Even though debt can be a tool for reaching certain goals, such as obtaining a degree or buying a home, those payments ultimately hold you back financially. If you want more money available for the things that are most important to you, work on paying off outstanding debt.

Beeharry recommends prioritizing debts with higher interest rates, like credit cards. “This can help you save money on interest charges and pay off your debts more quickly.”

Set Up an Emergency Fund

One of the best ways to be more intentional with your money is to make a plan for it. That includes having a plan for the unexpected.

“Create an emergency fund that you can use instead of putting unexpected expenses on a credit card or taking out a loan,” Beeharry said. That way, there’s less chance of a financial emergency turning into a long-term setback.

Donate to Charity

Intentional spending doesn’t have to be just about you. Spending according to your values might involve giving some of your money to those who need it more.

“If charitable giving is important to you,” Beeharry said, “you can intentionally set aside a percentage of your budget for donations.” 

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