How Conscious Spending Can Help

The United States and its citizens are sliding more and more into debt. As of February 2019, the country had an outstanding consumer debt of over $4 trillion for the first time in history! Consumers are spending, on average, roughly 10% of their income on non-mortgage debts such as credit card, personal, auto, and student loans. 

The typical American today has roughly $4300 in credit card balances, with the overall credit card debt surpassing $1 trillion. At the same time, student loan debt has tripled over the past decade, reaching a whopping $1.5 trillion – the second largest expense an individual will likely make in a lifetime, second only to purchasing a home. 

So, how can people safeguard against ending up in debt?

Reckless vs. Conscious Spending

Even though every situation is different, and there is no one-size-fits-all approach, irresponsible spending is a phenomenon that affects many Americans. In large part, this is a result of using credit cards for most purchases. Studies have shown that people are willing to pay twice as much for an item if they’re using their credit cards as opposed to cash. It is particularly true for items with hard-to-quantify values such as entertainment tickets or when impulse buying.

As a consequence, many end up maxing their credit cards or even going over the limit, which leads to interest rates and credit card debt. It might also come as a surprise to some that two-thirds of Americans don’t understand how credit cards work. 

In any case, tempering this reckless spending can help people avoid or escape crippling debt. One way of doing it is through strict budgeting.

A more engaging and fun way is through conscious spending. It is a means by which you can gather all of your wasted money and focus it towards what makes you happy or helps you improve. It implies a more effective use of your income by affording what’s essential and without continually being cash-strapped. Practitioners of conscious spending can indulge in their hobbies, travel, while also being able to put some money aside. 

How To Manage Conscious Spending? 

Four basic steps will lead to conscious spending:

Track your expenses – It only takes several days to a week of consistent expense tracking to see where you do your spending. You might be surprised to find out where a sizable chunk of your money ends up. 

What makes you happy vs. novelties – Make a list of all the things that make you happy and where you’d like to spend your money. These are the things and experiences you’d want to focus on. Anything else that doesn’t give you that feeling is something that you can probably live comfortably without. 

Compare – Whenever you’re about to make a purchase, remember the things you’re passionate about and compare. Is buying a new pair of shoes twice a month worth the cost of an annual trip abroad or an investment in your education? 

Set your desires as goals – Whatever desires you might have, be it an expensive pair of shoes, a trip abroad, or investing in your education, is best if you set these as goals and work your way to saving towards them. It will better focus your finances and help you keep yourself on track. 

If you’re interested in a career in I.T., MyComputerCareer is at your service. We provide technical training, certification preparation, and job placement support for adult learners looking to enter the Information Technology (I.T.) industry, as well as professionals seeking career advancement. For more information, please feel free to contact us

    https://twitter.com/MyCCompCareer