One of the trends I have noticed among family households is the notion of unconscious spending.  This can happen for both what we would consider fixed expenses (gas, electric, phone, cable), and also for discretionary expenses (dining out, vacation, household purchases).

You are often very conscious about what you spend when you don’t have any money or at the stage when you have a low income. Your thought process often revolves around what your net pay is from your weekly or bi-weekly check, and wondering whether you are going to have enough money to cover the basics monthly bills.  You dream for the day when you make enough money so you can splurge to buy a few of the items you have always dreamed of having, or thinking about that vacation spot you have always wanted to visit.

There becomes a point for many people that you begin to make enough money to cover your bills, and you have more than enough disposable income.  Naturally, your lifestyle expands as your income does at your job or business. You buy a larger home, treat yourself to some cool items, and stay at some of the most posh resorts in the country.  You figure that you have worked hard to make this money, and you shouldn’t have to worry about where each dollar is going.

The truth is most people don’t understand that you won’t make hay forever, and they end up spending in such a fashion that it is very difficult to pull back when the income levels decrease. Such is the case today where many Americans are making less than they were a few years ago, yet continue to unconsciously spend reverting to their old habits.

My initial recommendation to shake yourself of spending too much is to simply read all of your bills for 90 days.  With the advent of on line bill paying hardly anyone reads their bills anymore. Since credit card companies went to e-statements, many Americans don’t even read all of the purchases they make on their credit cards each month. By reading every bill, you will begin to trigger the conscious part of your mind to see what is going on with your household spending. Then, as your New Year’s resolution, shop every single bill.  Even if you think you have the best deal, shop them all.

The unconscious mind can be a powerful thing.  Make sure it doesn’t take your spending out of control.

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oXYGen Financial, Inc. co-CEO Ted Jenkin  is one of the foremost knowledgeable professionals in giving financial advice to the X and Y Generation.

Ted Jenkin, CFP®, AAMS®, AWMA®, CRPC®, CMFC®, CRPS®
Co-CEO and Founder oXYGen Financial, Inc.
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