If you want a significant change in your life, it usually starts with making one fundamental decision. This one decision can dramatically transform your current results.  Even what seems to be a small decision can have a significant impact if practiced consistently over time. This same logic applies to your finances as well.

One simple decision can turn your finances around from living paycheck to paycheck to building wealth.

That one decision is to practice spending intentionally.

Spending and Building Wealth

Making and spending money is a part of life. There is no way around it. To live in this world, you must use money.  Since everyone spends money, it is baffling to know that most people don’t know how to spend appropriately. Most are taught to make money, spend it to buy what you want, and repeat. This behavior has no regard on how money can be used other than to fulfill your immediate desire. Unfortunately, this is a major reason why over 70% of Americans live paycheck to paycheck.

Your spending habits can either be the catalyst to achieve your financial goals or be the catalyst to sabotage your wealth. Everyone gets to choose.

Choosing to spend carelessly without regard for anyone or anything, is in direct opposition to building wealth.

The good news is we all can decide what we spend our money on. Every dollar is an opportunity to vote.

When spending your money, a couple of questions you can ask yourself are:

• Will this purchase further my goals or someone else’s?
• Will my future self thank you for this decision right now?
• Am I being a good steward of the resources I have been given?

Now, I understand that 100% of your money may not go to furthering your financial goals because being able to buy things that you want is important too. But most of your money should be directed to your financial goals. If not, you are choosing to further someone else’s goals over your own.

The Dangers of Uncontrolled Spending

“Just throw it in the bag” – Fabulous

Many entertainers write lyrics about their ability to spend freely and without regard.  Social media perpetuates this false identity of wealth. But don’t be fooled. It’s a trap. Most of it is likely for entertainment purposes.

Everyone likes a good shopping spree every now and then, but making a habit of careless spending will leave you broke and wondering where all your money went.

Here are a few other indicators of uncontrolled spending.

Zero to Minimum Net Worth

• You are working hard and earning money, but your net worth is not improving over time. It may even be declining if you are going into debt every month.

Own Many Possessions, but No Assets

• Owning a lot of items is a false symbol of wealth especially if the items depreciate (lose its value). It’s important to buy assets before creating liabilities. Wealth cannot accumulate if most of the money is being used to pay off bills.

Using Compound Interest Incorrectly

• If you are paying more interest than you are earning from your investments, then it is time to adjust your spending. Compound interest is a powerful tool to build wealth over time. But it only works in favor of the one earning the interest rather than paying it.

Debt Increasing Every Month

• Uncontrolled spending also shows up in higher debt over time. Have you ever been shocked reviewing your credit card statement and said “How did it get this high?”If you are not keeping track of your spending then you can easily exceed the money that you had planned to spend each month. This remaining balance will increase over time if your spending is not managed and compound interest will work against you.

Living Paycheck to Paycheck

• Uncontrolled spending can have you counting the days to your next paycheck. This creates unnecessary stress in trying to make it through the week/month.

Here’s What You Can Do Now  

Set a spending limit and stick to it

To control your spending, you must get ahead of it. Completing a spending plan in advance is critical to making better spending decisions.  While most people do not like to create a spending plan because they believe it is restrictive; it is actually the opposite. A spending plan empowers you to choose how you spend your money and not allow others to do it for you.

Because spending is a part of life, then you choose what you will buy and what will further your financial goals. This way you can buy what you need and want while building wealth.

Don’t fall prey to ‘sales’ emails

Just because there is a sale does not mean you need to participate. Even if you have the money, that does not mean you need to spend it. That money can be applied to your financial goals. Remember that the sale benefits the person hosting the sale. Make sure your goals are taken care of first before you buy something just because it is on sale. Rest assured that there will always be another sale.

Change your mindset about what money is for

Most people learn that money is to buy what you need and want. But what if you changed your mindset about money.  What if you believed that money is supposed to be multiplied? What if you believed that money should work for you?

Money is not just to meet your needs and desires, but to create wealth for your family and others.  Once you start believing that, you will evaluate your purchases and make wise decisions that allow your money to build wealth.

“A good man leaves an inheritance to his children’s children” – Proverbs 13:22

Seek accountability

When you are serious about building wealth, you will recognize that there is a spending issue and choose to do things differently. Often times, having an accountability partner helps the transition. If you continue to try to change by yourself, then you are subject to falling back into the same habits. Why? Because who is going to know. Only you.

This is why having an accountability partner can help you stay the course and think of alternatives when you are slipping back into old habits.

“Money should be the servant. Not you serving money.”

Conclusion

The good news is you are making money. You know how to earn and work hard for it. The not so good news is it may not reflect the wealth you desire. It is in the constant cycle of earning money, spending money, and repeating. There is no accumulation, compounding interest (in your favor), or appreciation. It is a constant cycle of always working for money, but your money is not working for you.

Despite what your financial issue is, you can make a better decision at any moment.

There are many stories of people who use their money to generate more income without physically working.  This decision liberates them to choose when and where they work and creates a space where they are led by their purpose and not by a paycheck.

This should be the goal. Money should serve you and work for you, not the other way around. Spend intentionally. That’s getting your Finances On Point.