Are you happy with where your life is? Do you want to be happier or maybe just even happy? Many people might look at their career or relationships as the reason for a lack of satisfaction in their lives. But the issue could be a lot simpler than that. It could be your spending.

When we spend money, many times we think we are spending money on the things we want and enjoy. Sadly, this is far from the truth. Advertisers spend millions of dollars to convince us to buy things we don’t need and even things we don’t want. But they make us think we want or need them, so we buy them.

It never occurs to us that when you add up all of this wasted spending, it is what is keeping us from living a happier life. Think about it: if you didn’t buy $500 worth of things you were convinced you needed but really didn’t, what would you do with that $500? Save it for a vacation? Invest it for your retirement?

The crazy thing is, $500 is probably just the tip of the iceberg for most people. The amount of money they spend on things they really don’t need would surprise them.

So how can we overcome this wasteful spending and spend money on things that we do want and need? There is a 3 step process that I outline below to help you do just that.

Evaluating Spending In 3 Steps

In order to fully understand how we are spending our money, we need to ask ourselves 3 important questions:

#1. Where do I think I’m spending money?

This is important because as we will see later, where you think you are spending your money and where you are spending your money can be very different. So take a few minutes to write down where and on what you think you are spending your money.

#2. Where do I want to spend money?

Once you write down where you think you are spending your money, it is time to think about where you want to spend your money. What experiences or things would bring you happiness if you spent money on them? For example, maybe vacations mean a lot to you, so you would want to spend money on vacations.

Again, take some time to really think about the things that bring you happiness and write these things down.

#3. Where am I actually spending money?

Now we get to the eye-opening part of the questions. Where you are really spending your money. Look back through the past couple months and see all of the places you are spending your money. How does it compare to where you thought you were spending your money? How does it compare to where you want to spend your money?

As I mentioned earlier, this is most likely going to be an eye-opener for many people. You are going to see that you are spending money on things you didn’t think you were spending money and you are spending money on things that you don’t want to spend money.

Putting It All Together

So where do we go from here? Take this as a lesson learned and use it to your advantage going forward. When you have the urge to buy something, stop and ask yourself if it is something you really want to spend your money on, or is it the advertiser just doing a good job of convincing you that you want it?

The more you stop and question your purchases, the more money you will keep in your pocket for the things that really matter to you and your happiness.

As an added bonus, you might want to take some time to total up the purchases you make that you now realize were a waste of your money. When you do this, you will really see how much money you could still have or had for something you truly wanted.

If you do this bonus step, don’t let it get you down. Use it as motivation going forward. Try to limit the frivolous spending and only spend on what matters to you.