A few years ago I found myself wondering why I was buying the things I bought. Why did I need to own two cars, a motorcycle, live in an expensive apartment, or have a walk-in-closet filled with clothes with tags still on them? Why did I need a new phone each year or get the latest tech gadget? Did I really need to spend $40 per night on dinner or go out for a weekend bar crawl and spend $200-300?
[This story appears and is expanded in my bestselling book You Only Live Once: The Roadmap to Financial Wellness and a Purposeful Life.]
By the time I was 26, I was vice president of marketing for a credit union. I went from bank teller to executive in a matter of 3 years. When I made that huge income leap I still couldn’t manage to buy my way into happiness.
I was living and enjoying life, but I also felt unsatisfied. Something was missing and I was trying to fill it with things such as an $1800 watch and weekend retreats. I was making money and spending it quickly.
Eventually, I realized my relationship with money, credit, and debt was based on a lack of awareness of what I truly love. I focused my attention on earning more money, but continued to mindlessly spend on things that didn’t matter to me.
I continued to earn more but I couldn’t seem to change my spending habits no matter how much I tried. Until, I learned about addressing the root cause of my spending–my money mindset.
Money mindset? Glad you asked.
There’s been a lot of talk lately about money mindset or money mindfulness. I’ve also read tons of articles on conscious spending. Basically, all these hippy new age words focus on awareness – financial awareness to be more specific. And I couldn’t agree more.
Mindfulness is an increase attention to how we feel, think, and react to the world around us. Wanting a bigger home or dream vacation but faced with the reality of debt or low income, we actually make decisions that compound our financial issues. During these financial moments, our decision-making is strongly influenced by our feelings and behaviors. Sometimes conscious but more often unconscious.
The reason why we don’t live fulfilling lives is not because we’re spending the money we make, rather, we’re spending on things that really don’t matter to us.
Spend on loves not likes
For this moment, let’s suspend the personal finance motto “choose needs before wants.” I want to focus your attention on spending on loves not likes. What prevents us from living our dream life is that we’re spending our earned money on things we like not love.
I’ve heard an acronym used many times throughout the years, but I had no clue what it really meant. The acronym is “WANELO” which stands for Want, Need, and Love. Basically, WANELO prioritizes spending on things you absolutely love.
How many purchases have you made that you absolutely love? Or do you find yourself buying things you like because you’re looking for instant gratification?
I love to travel and like eating out
A few years ago, I believed traveling cost a lot of money so I didn’t make many plans to travel overseas. One day I decided to calculate the total amount of money I spent on dinners out with friends for an entire month. The amount totaled $1200. That was enough for an all inclusive vacation to the Dominican Republic. You can imagine the look on my face when I realized I’ve been unconsciously spending on things I liked over things I said I loved.
Are you unconsciously spending on likes not loves?
In the past years, I became aware of a spending process based on Loving, Needing, Liking, and Wanting. If I don’t absolutely love something then I determine if it’s something I need, like, or want. It’s helped prioritize how I spend my time and spend my money.
Basically, it means you spend the most money on what you love and spend the least on what you want.
I’ll repeat it again.
Love > Need > Want > Like
Love goes before Needs
There are many things we like, but only want a few of those things. And there are things we need that must be prioritized over wants. But, above all else we should spend on what we love.
Spend too much on your likes, wants, and needs you won’t have enough for things you love.
For example, you need a car and love the BMW brand. The brand fulfills a dream of luxury and status. If you truly love BMWs, then no one should deprive you of owning one. Instead of unconsciously buying any brand new car to fulfill the need, you may decide to buy a used car to save money to afford what you love later. Loving, at times, means some short-term sacrifices. Buying the BMW may call for expense cuts, a part-time job, improving credit, or paying off debt today.
There’s a caveat to this example. In some cases, buying the BMW you love (may be affordable) could take you away from creating a life you actual love. You have to align your spending to what matters most to you.
Mindfulness is knowing what you love
Being money mindful is awareness of a vision for your life and understanding your financial situation. You work to earn money to spend money. Are you spending that money on things you love?
Are you spending to create the life you love or spending to feel okay for the life you like?
Want to learn more about Love > Need > Want > Like? Get a copy of my book today.