The concept of “underconsumption” is gaining traction as more people are feeling the effects of inflation. Underconsumption, simply put, is the practice of being more intentional with your spending by buying only what you need, repurposing items or using them until they break.

By resisting the urge to purchase something new and being more mindful of our sustainability options, we start to prioritize needs over wants and focus on long-term financial health. Keep reading to see our examples of underconsumption, and how this practice can help reduce your financial stress and increase financial security.

Examples of Underconsumption

Here are 10 examples of underconsumption that people can practice in their everyday spending:

1. Food: Buying only the groceries you need for the week to avoid food waste.
2. Clothing: Purchasing fewer, high-quality clothing items instead of frequently buying cheaper, fast-fashion pieces.
3. Utilities: Reducing energy consumption by turning off lights and unplugging devices when not in use.
4. Entertainment: Opting for free or low-cost entertainment options like local events, libraries or parks instead of expensive outings.
5. Technology: Keeping your current well-functioning gadgets longer instead of upgrading to the latest model every year when it’s not needed.
6. Personal care products: Using up all your personal care products before buying new ones.
7. Household items: Using up all your personal care products before buying new ones.
8. Dining Out: Cooking at home more often instead of frequently eating out or ordering takeout.
9. Subscriptions: Canceling unused or rarely used subscriptions and memberships.

Financial Benefits of Underconsumption

• Increased savings: By spending less, you can allocate more funds to savings. This can help build an emergency fund, save for retirement, or invest in opportunities that grow your wealth over time.
• Debt reduction: Underconsumption can free up resources to pay down existing debts faster, reducing the amount of interest paid and improving your overall financial health.
• Financial flexibility: Having extra funds available can provide flexibility in times of unexpected expenses or opportunities, reducing the need for high-interest loans or credit.
• Reduced financial stress: Knowing that you have a financial cushion can alleviate stress and anxiety related to money, leading to better mental and emotional well-being.

Underconsumption is about making conscious choices that can help lead to financial stability and peace of mind. By adopting this approach, you can build financial slack, reduce stress and create a more secure financial future. Every small step towards can have a significant impact on your overall financial well-being. For personalized guidance in creating a spending plan, visit your nearest Financial Health Center.