In anticipation of the busiest spending season of the year, we’ve been reflecting on what making conscious financial choices and spending intentionally means for Canadians nowadays. This will be our second pandemic holiday season and we’re certain some things have changed since our 2019 blog about how to spend mindfully during the holidays.
A recent MacLean’s article on how the pandemic has rewired our brains, agrees – we have changed and so have the ways we spend our money. It predicts that being locked-down and otherwise restricted for the last 18 months will encourage some people to continue being extremely frugal – like we saw after the Great Depression – while others will become spendthrifts, willing to spend more to make up for lost time and experiences.
“Despite massive job losses in 2020, Canadians with nowhere to spend their paycheques during lockdown amassed $212 billion in savings the first year of the pandemic—more than $5,000 per Canadian—compared to a relatively paltry $18 billion the year prior, which amounted to less than $500 a person.”
This shift in Canadian consumer behaviour is likely to continue, at least somewhat, into post-pandemic life. An April 2021 survey by Scotiabank found that 47% of respondents felt they could maintain their pandemic saving/spending habits once things return to some semblance of “normal.” It seems like for many, the conversation has shifted away from “how do I spend money mindfully?” to “how do I keep spending money mindfully?”.
The cornerstone of spending with intent is knowing what truly matters to you and is therefore worth spending money on. For example, some people now prefer cooking or exercising at home versus eating out or going to a gym while others feel the exact opposite. Some people miss travelling while others may have been relieved to get a break from it. Regardless, priorities have come into sharper focus and 36% of Canadians plan to continue eliminating unnecessary or discretionary spending as a result.
To eliminate the unnecessary, we first need to be able to identify it. Tracking spending helps us get a clear picture of what we tend to spend money on and why. Are you an emotional spender who takes comfort in retail therapy? Are you an unconscious spender who operates on autopilot or a spontaneous spender who lives in the moment? Keep on top of daily/weekly/monthly spending habits – good and bad – so you understand how to either foster or eliminate them. Try challenging yourself to not buy a specific indulgence or anything at all for a set period, just to prove to yourself you’re capable and in control of where your money goes.
Understanding our values and our relationship with money helps us create a budget we feel good sticking to… one that transcends feelings of obligation or guilt. Contrary to popular belief, budgeting doesn’t have to be about deprivation. It can be just as much (if not more) about happiness or contentment and living a meaningful life. Forgoing mindless take-out coffee purchases could directly translate to vacation savings or a worthwhile charity/mutual aid fund. Savings on memberships you no longer need/want can be redirected to experiences with loved ones. It’s about finding and investing in what you care about and eliminating the things you don’t.
Mindful spending looks different to everyone because we are all different. That said, it does have an underlying tenet: spend money in ways that leave you feeling fulfilled, not guilty, in the present and in the future. A professional advisor can provide someone with the tools and know-how necessary to achieve their financial goals but to be successful, they must first be committed to spending and saving in ways that will work for them, not against them.
To start or revaluate your savings strategy so you’re ready to tackle the holiday season – and one day, “normal” life – with intent, connect with us.