Overcome Inflation and Lifestyle Creep With An Intentional Spending Plan

In a world where expenses are on the rise and the titillations of our marketing induced desires perpetually expand, it’s easy to feel overwhelmed by spending pressures. According to the Bureau of labor Statistics in January of 2024, core inflation, which leaves out food and energy prices was 3.9% for 2024.  Advertising is ubiquitous in our lives. EMarketer notes that global digital ad spending surpassed $389 billion in 2021.  It feels like an uphill battle, yet there is a powerful tool at our disposal: the intentional spending plan.

Your intentional spending plan is NOT a budget; it’s a strategic approach to managing your money that aligns with your values and long-term goals. It involves consciously allocating your resources to the areas of your life that bring you the most fulfillment while safeguarding against the erosive effects of inflation and our unsatiable ego desires.  It is giving your money a job to accomplish what is important to you.

How exactly can an intentional spending plan help you navigate these financial challenges?

Firstly, let’s address inflation. Inflation, the gradual increase in the price of goods and services over time, erodes the purchasing power of your money. While inflation itself is out of our control, you can mitigate its impact by proactively managing your spending. An intentional spending plan involves regularly reassessing your expenses and identifying areas where you can cut back, minimize waste or optimize discretionary decisions.

Moreover, an intentional spending plan encourages mindfulness and conscious consumption. Instead of mindlessly succumbing to the allure of instant gratification and constantly upgrading your lifestyle, you take a deliberate approach to how you allocate your resources. This mindfulness acts as a shield against lifestyle creep, the gradual increase in spending as your income rises or as spending becomes easier (Thank you swipe, auto, subscription, credit, debit, click options). By setting clear boundaries and priorities, you can resist the temptation to overspend on non-essential items and focus on what truly matters to you.

Creating an intentional spending plan starts with understanding your financial situation. Begin by tracking your expenses to gain insight into where your money is going. The goal is to create an awareness and agency in your life – not shame or guilt.  This process can be eye-opening and reveal areas where you may be overspending or allocating resources inefficiently. Once you have a clear picture of your spending habits, you can start aligning them with your values and goals.

Next, make a list of what you value – no wrong answers and no judgment.  Some of them may include family, friendships, education, honesty, compassion, curiosity, faith, security.  You get the idea, and this really opens opportunities for conversations.

Now, look at your current spending and see if it supports or reflects your top five values.  If not, you can refine some decisions.

As you create a practice of monetary mindfulness, you will find yourself becoming more grateful for what you already have and letting go of what you think you want. When you do spend money it will feel good and in alignment with your core values and supportive of your goals.

A final aspect of an intentional spending plan is reflection, review and adjustment. Your financial situation and priorities are likely to evolve over time, so it’s essential to revisit your plan periodically and adjust as warranted.  This could involve reallocating resources to reflect changes in income or expenses, or reassessing your goals and priorities in light of new circumstances.

Unlike a budget that tells you what you can or cannot spend money on, the intentional, mindful spending plan undergirds your “why” and the tradeoffs you are making now to manage the tensions between your current and your future self.

Ultimately, creating an intentional spending plan empowers you to take control of your finances and build a more secure financial future. By being intentional about how you allocate your resources, you can combat the erosive effects of inflation and lifestyle creep while aligning your spending with your values and goals. It’s a powerful tool that puts you in the driver’s seat of your financial journey, guiding you towards greater stability, security, and satisfaction.