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Four Types of Spending


I really never used to give much thought to my spending. In my mind, it was a means to an end. I liked paying for some stuff and hated paying for other stuff. I liked shopping and buying stuff. Especially stuff from Macy’s, Nordstrom and Target. And, I hated paying for things like car repairs, taxes, and my retirement. But, I never really broke down how I felt about the actual spending of the money. The verb. The exchanging. 

Instead, I focused on trying to make more money and tried not to focus on the spending. To be honest, thinking about my spending would just send me into a tailspin of feeling stupid, dishonest, entitled, childish and guilty. So, I did my best to avoid that subject.

Now, I give careful consideration to each money exchange and I help my clients do the same thing. We pay attention to how and why we spend our money. We recognize what type of spending that we’re engaging in. We know where we are on the Abundance Scale. We recognize our patterns and deliberately keep our focus on the result that we are trying to relate.

We all spend money. We pay our bills. We pay the parking meter. We buy things. We go to the grocery store. We put gas in our car.

It’s very rare to find a day that we don’t spend money.

Each time money leaves our hands, or our debit cards, or our credit cards, or our bank accounts – we have an opportunity to learn about our relationship with money.

How we feel when we spend our money has an enormous impact on our financial results.

Our thoughts create feelings. From these feelings we take action. When we’re talking about money, the actions that we take are spending and earning. These are the things we DO when we FEEL a certain way. The way we feel determines the type of action we take.  When we feel neutral we take actions and create results specific to those actions. When we feel scarce, we take different actions and create a different result.

The tool I use for this is the Four Types of Spending. It’s a tool to help you determine why you spend what you spend. It helps takes the mystery out of your current finances. It helps you figure out why you ended up here in the first place.

Determining the Type of Spend strengthens your relationship with yourself and with your money. It’s a tool that gives you an access point for cleaning up stressful and painful thoughts… even ones you never knew you had. It helps build self-awareness as well as financial awareness.

The Four Types of Spending are Abundant Spending, Neutral Spending, Scarcity Spending, and Avoidance Spending. Each type of spending leads to drastically different results.

Abundant Spending: This is money spent from the abundant zone on the Abundance Scale (+2 to +10). Thoughts about this spend are abundant, generous, and positively charged. You feel good about the price, feel good emotionally, and feel good about the item that you are paying for. It is an action that is taken from abundant and positive feelings and thoughts. 

Neutral Spending: This is money spent from the neutral zone on the Abundance Scale (-1 to +1). Thoughts about this spend are neutral and not emotionally charged. You feel neutral about the price, feel neutral emotionally, and feel neutral about the item that you are paying for. It is an action that is taken from neutral feelings and thoughts.

Scarcity Spending: This is money spent from the scarce zone on the Abundance Scale (-2 to -10). Thoughts about this spend are scarce, resistant and negatively charged.  You feel bad about the price, feel bad emotionally, and/or feel bad about the item that you’re paying for. It is an action that is taken from a scarce and negative feelings and thoughts.

Avoidance Spending: This is money spent unconsciously in order to not experience scarce/negative feelings and thoughts. Avoidance Spending is money spent in the scarcity zone on the Abundance Scale, even though you do not recognize the feeling at the time. This is an action taken to NOT FEEL something. To numb a feeling. This is an action usually taken to distract yourself from the truth. To distract you from what you’re really feeling. It is typically money spent in order to avoid feeling broke, stuck, bored, lonely, punished, left out.  Avoidance Spending can also be money that you are unconsciously spending because you aren’t dealing with your finances (extras like un-used gym memberships, extra cell phone minutes, unused automatic payments, overdraft fees, etc.)

The Type of Spend is not price or item dependent. Many of my clients confuse this in the beginning. They think that inexpensive items are Abundant or Neutral Spends. They think expensive items are Scarce Spends.  But, any time money is exchanged, it has the capacity to be any one of the Four Types of Spending.  The Spend is determined by your score on the Abundance Scale (thoughts and feelings). 

For example, let’s look at how a cup of coffee can be all four different Types of Spending.

Coffee Scenario #1: I am in a very good mood. I have plenty of time. I go to my favorite coffee shop, Kreuzberg, CA. Kreuzberg is a perfect place to hang out and get some work done.  It’s owned by one of my best friends, James, here in town. I walk in and I’m happily surprised to see Tina and Zeke sitting at a table and talking. I join them.  James brings me over the most perfect cappuccino (seriously… Verve… trust … try it) and sits down to join us. We all get caught up on the latest shenanigans and share our latest woes.

These are my people and I love them. I drop a few bucks in the barista’s jar before I leave (because there’s no way James will take my money). I feel great about my life, my time, my friends. I’m in a place of abundance – not just abundance of money but abundance of support, friendship, and care.  I feel overwhelmingly grateful. Those dollars in the tip jar are an Abundant Spend.

Coffee Scenario #2: I am on my way out of town and I want to grab a cup of coffee for the road. Right around the corner from my house is a tiny market that the neighborhood affectionately calls “The Pantry.”  I stop by the pantry and grab a cup of joe. Not giving a lot of thought to the coffee or the price. I glance at the headlines on the newspaper by the cash register. Pay my two bucks and then hop in my car and head onto the highway. I’m feeling peaceful. This cup of coffee is a Neutral Spend.

Coffee Scenario #3: I have about 15 minutes before my next client and I’m exhausted. Maybe a cup of coffee will help. Ack! I’m out of coffee. There’s a Starbucks (sorry James) a few blocks from my house over closer to the college and I decide to drive over there to get a coffee.  There’s a line to the door of college students. Every single one of them is going to be ordering a stupid frappucino. It’s going to take forever to even be able to order my friggin coffee. I’m angry at the line. I’m frustrated by dumb college students who don’t know what to order. I’m mad at myself for running out of coffee in the first place. By the time I get to the front of the line – I have exactly one minute before I have to be on a call with my next client.  I pay my two bucks and give the barista evil eyes to try to make him hurry.  I’m feeling impatient and frustrated. Even though my thoughts and feelings are not specifically about the money, this is a Scarcity Spend. 

Coffee Scenario #4: I wake up with a pit in my stomach. My little girl is going on vacation with her dad for an entire week. This is the first time that she’s been gone this long. I’m going to be dropping her off at school in an hour and will need to say goodbye there. I hate this. I decide to take her to the donut shop to celebrate our last morning together. I get coffee and she gets a donut and milk. We spend our last 15 minutes together talking about her upcoming trip. I drop her off at school and get back into my car and cry for the first time all morning. I go to journal my Spend and notice that I want to say this Spend was “Abundant” because it was a celebration. But, the truth is that I was sad. I was sad and trying to avoid being sad. I lied to myself and called it a celebration. A celebration of what? Saying goodbye?! That’s nothing I like to celebrate. I tried to avoid my sadness by ‘celebrating’. This is an Avoidance Spend.

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Reader Comments (7)

A very thoughtful, and useful post Meadow! Personally, I have cut down on frivolous spending and that has made all the difference in my thoughts and feelings when it comes to purchases. Now more of my purchases come from an abundance viewpoint. I FEEL different when making them and that has contributed to an overall positive feeling about how I live my life.

And what is it with students and Frappuccinos??? :)

March 8, 2011 | Unregistered CommenterMonika Roe

Love this post Meadow. Made me cry at the end. Thank you for the examples, they were perfect. xo

March 8, 2011 | Unregistered CommenterKatie

Thanks for your input, Monika and Katie.

March 8, 2011 | Unregistered CommenterMeadow

Good post , Meadow. Had those same avoidant feelings and spends in my life too, at times. I think "scarcity spending" is the hardest for me to grasp, and the most difficult to relate to. xo

March 8, 2011 | Unregistered Commenterkathleen

Thanks Meadow, that was very useful information. I think I'm going to put a reminder of these four spending categories in my wallet!I loved the Coffee Scenarions and would love to read more about the Abundance Scale!

March 9, 2011 | Unregistered CommenterRima Nouri

Thank you Kathleen - I try to work with my clients to eliminate scarcity spending altogether. So, if you don't have a lot of it in your life - that is excellent. The goal is to try to feel as good as possible.

March 9, 2011 | Registered CommenterMeadow DeVor

Rima - thanks for the comment. There's a previous blog post called "The Abundance Scale" that you might want to check out for more information on how to determine your abundance/scarcity.

I love your idea about keeping the 4 Types of Spending in your wallet! I'm going to suggest that to my clients as well.

March 9, 2011 | Registered CommenterMeadow DeVor

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