Money is meant to be spent, but it’s also meant to be saved. It can be hard to balance saving money and spending it. Use the following tips to get a firm grip on how to use your hard-earned money wisely, while still being able to get enjoyment out of life.
How to Balance Saving Money & Spending It
Pay yourself first
You will never save up money, if you don’t pay yourself first. If you put all your money towards paying bills and such it will be hard to build up any savings. Create a special account just for you. Be sure that each week a small portion of your check gets deposited into that savings account.
Give yourself an allowance
As an adult, it’s hard to work so hard and only pay bills. Sometimes you want a little spending money. If you’re all caught up on your bills, it’s okay to give yourself an allowance. You don’t need to spend your whole paycheck, but $20-$30 per paycheck is a fair amount to give yourself. Treating yourself to a new gadget, outfit, or even a restaurant, that you rarely make it to, will be a great refresher that you sometimes need. Life isn’t meant to be all work and no play.
Don’t blow your money
Spend your money wisely, don’t just blow it. This is a good way to balance saving money and spending it. Don’t blow your money. In other words, if you have found yourself swooning over an item, go ahead and treat yourself, on occasion. Before splurging, though, ask yourself, “Is this practical?” If the answer is no, then it is best to wait until you find something that you really want, but also have a use for. Buyer’s remorse is no fun. So, when you walk by a New Kids on the Block poster that has you reminiscing over your childhood, be sure to consider your purchase wisely, before jumping the gun right away.
Stick to the budget
A budget allows you to give yourself spending money and to pay your bills. By sticking to the budget, you’re going to do a good job of balancing and saving money. Start out by reassessing your budget, if you already have one. Make sure that your bills are covered, as well as other necessities, like fuel, groceries, and clothing.
Whatever is left of your paycheck can be divided between gifting and saving. Once your budget is finalized, it is important to adhere to it. If your allotted grocery money for the week has been consumed and you then find out that Cadbury Mini Eggs have just hit the shelves, don’t even think about digging into your wallet. Wait until next week, when your grocery budget has reset. Practicing this self-control can be hard, but very rewarding.
Save your money, watch it grow
The more money you save, the more motivating it is to keep saving. Don’t be afraid to save up for something you want. Instead of running out and buying it on credit, you can save up for it. The result is much sweeter, when you save money for something you want, instead of making a spontaneous purchase.
I’d love to know, how do you personally balance saving money and spending it?
This story begins about 10 years ago, around the time my husband and I were married. It’s also a story that I have never told on Simply Frugal. In all honesty, I have never told this story before because it just seems too simplistic. But I’ll take a risk with this one and assume there are some of you out there that can relate to or need to hear our story.
You may have noticed that I have never discussed all the ways that we have personally climbed out of mountains of debt. Like most other websites similar to mine, they are sharing their story of how they knocked down thousands upon thousands of dollars in debt.
But I do not share these steps for one simple fact: Until the purchase of our new home, my husband and I have never had any debt.
I don’t share this to brag, but to perhaps tear away at the thoughts that our society suggests the idea that we need debt in order to be or appear successful.
We are by no means wealthy, but we have done well considering there have been some years with very low income.
As I mentioned, our journey to paying off more than 50% of our mortgage, began about 10 years ago when we started making smart financial choices. (Instead of ones that “society” suggested we make.) Our story may be possible because of circumstances but I also believe it’s because of our intentional decisions.
At the time of our marriage, my husband owned a condo that he then sold for a profit. We purchased another townhouse at the time of our marriage and decided the smart thing to do was to put his profits into our new home, paying off the mortgage in full. This was essentially the best decisions we have made for our family. There were so many fun things we could have done with the money. We could have been world travelers or bought a boat or fancy car. But we decided to be forward thinkers and determined that we wanted to set up our future for success which to us means no debt.
Because of our choice many years ago, we had a very low cost of living, which enabled us to save even more money. (Even in the very low income years.)
So, cut to March of 2017, we purchased our new home using the profits from the sale of our townhouse and the savings we had in the bank. That allowed up to pay off more than 50% of our mortgage!
As you can see, our story is not typical of most frugal websites out there today. It’s also quite “simple” because we happened to buy and sell at “the right times” allowing us to profit.
But… I also attribute our success so far to the spending choices we make on a daily basis. Here are our “rules” for spending that I hope will help you decide with future purchases:
1. Pay with Cash
When we want something or need something, we always pay with cash. Now, we do use a credit card, but we only use it if we already have the money in the bank. Over the years, every purchase we have made (aside from our new home) has been with cash.
2. Buy Used
Looking around our home, many of the things I’m looking at have been bought used. Our couch set, our dining room table, toys, our vehicles even. (Though we do keep those outside. 😉 ) When it’s time to make a purchase, we look for something used first.
3. Buy on Sale
If we can’t find what were looking for used, we wait for a sale. Everything goes on sale eventually! Why pay full price if you don’t have to?
4. Determine Wants vs. Needs
My husband wants a new TV for the basement. We still haven’t purchased one because we have determined that there are other purchases that we need to make that are more important. The way we have set up our finances allows us to buy wants, but that doesn’t mean we instantly go out and buy something just because we want to. We do our research and think through the purchase. Now, I’m not perfect and I struggle with buying more small wants than my husband. Something both of us wish to change. 🙂
5. Have an Emergency Fund
My husband and I don’t feel comfortable if we don’t have a certain amount in the bank. We highly recommend having an emergency fund. The amount you have in this account is up to you, but it should only be used in real emergencies.
All in all, it takes practice, thoughtfulness and a shift in mindset. Be a future thinker instead of a present thinker in terms of your finances. It wasn’t until I completed my very first No Spend Challenge many years ago that I had that mindset change. The challenge helped me to switch my mindset from shopping for entertainment to realize the enjoyment of having money in the bank.
My hope is that our story is an encouragement to you. If you’re in a less than ideal financial spot, it doesn’t always have to be that way!
I’d love to hear your thoughts on this. Please share in the comments below!
Do you have a lot of debt? Want to get it paid off? You can get serious about paying off debt. In fact, you can pay as much off as you want. Starting with $1,000 in just one month. It may sound crazy, but lots of people have done this and so can you.
How to Pay off $1,000 of Debt in One Month
Only Keep $1,000 in Savings, Use the Rest
Unless you are planning a big purchase, where you will need a hefty down payment, there is no reason to leave thousands of dollars sitting in a savings account. The average savings account yields very little interest. One $1,000 creates a pretty comfortable safety net in case of emergencies. Any extra money that remains would be best spent chipping away at your debt.
Sell Expensive Items in Your Home
How many TVs do you have in your household? Two, three, or even four? Chances are that they don’t all get used, frequently, if at all. So, why hang onto all of them? Sell the ones that don’t get much use and put the profit towards one of your bills. Do you have a piano or organ collecting dust in the spare room?
The money you could make from selling it will get more use by hacking away at your bills, than if you were to keep it. Look around. We all have items sitting in our homes that are used so rarely, they are often forgotten about. If it doesn’t have much value to you, list it for sale and see what you can get out of it.
Stop Using Credit Cards
Credit cards can be useful in an emergency. However, if you are using them for everyday groceries and shopping sprees at your local mall, then you will likely be finding yourself getting deeper in the hole. Credit cards are borrowed money. Generally, borrowed money doesn’t come free. When it comes to credit card companies, they intend on you paying just the minimum amount back, so they can hit you with interest.
This is how they make their money. Just remember that each time you use your credit card, you are really paying more than the retail price of your purchases, by the time you add in the interest. Even when used in an emergency, you are still going to be paying interest. It is best to build up your savings, so that you don’t have to pay more than asking price for anything.
Make as Many Payments as You can in One Month
Credit reports don’t show how many payments you make in one month, but they do note how much you have paid, total. If you find yourself having leftover money at the end of the week, make a payment. These payments will accumulate throughout the month, bringing down your total debt faster. Doing so, will also make sure that your money goes somewhere important and doesn’t accidentally get spent on a random purchase.
Tighten Up Your Budget in Every Other Area
Cable is one of the most common cuts that people make in their budget. Many people replace cable or satellite tv with much cheaper options, such as Netflix. Eight to ten dollars for either really doesn’t sound like much, but it adds up. Every little bit counts and by getting rid of Netflix, you will also have more time to focus on more important things in your life. It’s not just TV though. What about the fast food that you may be eating frequently? Meal prepping has become quite popular.
Using these tips are great ways to pay off $1,000 of debt in one month. When you really look into your budget, you may be surprised at how much money you’re really spending.
A new school year can often feel like the start of a brand new calendar year. Perhaps a time when many people resolve or set goals to improve their financial situations. I thought I would compile a list of some of the personal finance books that I think could help inspire you along with your goals! Let me know if there are any books you could recommend and I’ll add them to the list for others to enjoy!
Debt-Free Forever – I just had to put the book written by one of our favourite Canadian financial writers at the top! Debt-Free Forever by Gail Vaz-Oxlade “will help readers take responsibility for, and control of, their money. Gail’s rules are simple: you can’t spend money you don’t have, you must save something, and if you’re in debt, you must get the albatross off your back. But Gail knows following the rules can be tough. That’s why Debt-Free Forever gives you a road map to getting out of the red in 36 months or less.”
Money Making Mom – I love pretty much anything Crystal Paine of MoneySavingMom.com does. And this book is no exception. “The nuts and bolts of how to make more money from home are revealed in clear steps that can be immediately and easily put into practice. But more than just a how-to book for earning extra income, Money-Making Mom is a challenge to dream big and create a pathway for life. Paine offers examples and insights about what “finding your purpose” can look like in family, career, and service to others.”
The Total Money Makeover – Dave Ramsay has become very popular, especially in the US, with his strategies that have enabled countless families to change their financial situations. Dave has written The Total Money Makeover in “7 organized, easy-to-follow steps that will lead you out of debt and into a Total Money Makeover. Plus, you’ll read over 50 real-life stories from people just like you who have followed these principles and are now winning with their money. It is a plan designed for everyone, regardless of income or age.”
Your Money: The Missing Manual – Written by Get Rich Slowly blogger JD Roth, you’ll find his book written in easy to understand language, with concise and clear whys and why nots to all the different aspect of personal finance. You’ll get the info you need to make sensible decisions on saving, spending, and investing, learn the best ways to set and achieve financial goals, set up a realistic budget framework and learn how to track expenses and much more!
The Wealthy Barber – “David Chilton offers Canadians a common sense guide to successful financial planning with his charming story about a small-town barber with financial genius. Roy is the wealthy barber who offers Dave, Sue, Tom and Cathy great financial advice by giving them simple — and realistic — guidelines to follow.” With more than 1.5 million copies sold to date, The Wealthy Barber is the best-selling book ever of any kind in Canada!
Your Money Or Your Life – This is an essential read for those wanting to get out of debt and develop savings, reorder material priorities and live well for less, resolve inner conflicts between values and lifestyle, save the planet while saving money, and much more! In Your Money or Your Life, Vicki Robin shows readers how to gain control of their money and finally begin to make a life, rather than just make a living.
Smart Cookies: Making More Dough – “Inspired by an episode of The Oprah Winfrey Show on personal finance, the Smart Cookies, five dynamic young women who weren’t always so savvy about money, formed a “money club,” and together developed strategies for turning their financial lives around – without surrendering their sanity or their social lives. In this guide, the Cookies demonstrate how women of all ages can achieve financial security. They share their own stories, offer easy-to-follow steps, and lay out simple plans for meeting any goal, whether it’s eliminating debt, making good investments, becoming a smart spender or saving up for a big-ticket purchase.”
Smart Couples Finish Rich – David Bach provides couples with easy-to-use tools that cover everything from credit-card management to investment advice to long-term care. From this updated, newly revised Canadian edition, couples will learn how to work together as a team to identify their core values and dreams, and to create a financial plan that will allow them to achieve security, provide for their family’s future financial needs, and increase their income.
It feels as though my daughter has had countless birthday parties to attend this year. That is so fun and great for her, but quite frankly, gifts can really add up! It’s one of those things that you don’t really think about when planning your $100/week for entertainment and miscellaneous costs, and an oversight that most parents make.
Planning ahead for birthday gifts can save the budget, but can also save time. Planning ahead can reduce those trips to the toy store to pick up a suitable gift minutes before the party, where you are likely to overpay not only for the gift – but for cards and gift wrap too.
Here are some of the ways that money can be saved on children’s gifts:
Shop Sales, Shop Early
Look for sales that advertise 40% or more off of the regular price of gifts. Shopping these sales is a great way to get brand name toys, high quality wooden toys and themed toys, for less. Large retail stores, like Toys R Us, have certain brands on sale every week. Consider the popular toys for your child’s age group or future toys that can be stashed away and pick them up to get the most bang for your buck.
Buy Quality Toys
Buying high quality toys, from well known brands that are going to last is going to save on the cost of replacing these items in the future. Especially handy when you’re purchasing gifts for your own family. High quality toys don’t have to come with high price tags; shopping sales and comparing prices reduces the cost, and the chance you are going to be running off to replace the toys.
Think Outside of the Toy Store
Toys R Us may be the first place that you think of when it comes to shopping for toys, but there are many online boutiques offering low prices and even deals including free shipping. Signing up for communication from these Canadian online toy shops can give you deals like 40% off of the entire store, reduced shipping and even free local pick-up if you live within driving area of the store. Some great places to look are Amazon.ca, Chapters.Indigo.ca or Mastermind Toys.
Use Coupons
We’ve been seeing more and more coupons for toys over the course of the last year. From coupons released through Websaver for Fisher Price toys, or the same coupons found in the pages of Today’s Parent magazine, it makes it that much easier to save while shopping for toys. Try to combine coupons and sales to save and keep your eyes open for coupons for leading toy stores to save even more.
Buying toys doesn’t have to break the bank. Using these tips, you can stop the pre-birthday mad dash to the toy store and save money on holidays for your own children, too.
I’d love to know your tips for saving on birthday presents! Let me know in the comments below.
– Dave Ramsay has become very popular, especially in the US, with his strategies that have enabled countless families to change their financial situations. Dave has written The Total Money Makeover in “7 organized, easy-to-follow steps that will lead you out of debt and into a Total Money Makeover. Plus, you’ll read over 50 real-life stories from people just like you who have followed these principles and are now winning with their money. It is a plan designed for everyone, regardless of income or age.”
– Written by 
– This is an essential read for those wanting to get out of debt and develop savings, reorder material priorities and live well for less, resolve inner conflicts between values and lifestyle, save the planet while saving money, and much more! In Your Money or Your Life, Vicki Robin shows readers how to gain control of their money and finally begin to make a life, rather than just make a living.
