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How to Budget When You Are a Spender

May 9, 2016
Budget Guides

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Everyone loves to spend money but sometimes the love for spending can really do some major damage on your budget. Click to read about how you can still budget your money even when you are a spender.

I can honestly say I was a complete out of control, total die-hard spender before I came to my senses. I don't think we are just born with a natural like instinct to go out and spend, but I think it's something that develops over time. It's something that is instilled in us by years of bad habits, constant credit card swipes, and unnecessary desires.

Throughout my financial journey that started back in 2011, I have experienced two important things. When I realized my debt was unmanageable, I did what most people do to try to save money. I looked for every great deal; constantly checking the clearance racks to get my next spending fix. I was saving money wasn't I? I wasn't spending full price on a shirt, and I was getting shoes on sale. It all sounds great right?

Now that I am 5 years into my financial journey, I realized that there are two types of spenders. Spenders who don't care about spending $80 on a t-shirt & frugal spenders. I transitioned from an out of control spender to a frugal spender. By becoming this, I was more aware of the money I was spending & I did make an effort to not pay full price for things. But the problem I ran into being a natural-born spender is that I was spending more as a frugal spender than I did before and here is why.

My thought process when I was searching the clearance racks was “I am saving money by shopping on the clearance rack, so I can buy more right?” Before you know it, I was bringing home bags filled with $5-$10 t-shirts that cost more than if I would have just bought the full priced shirt. I was purchasing items simply because they were on sale for $5, not because I actually needed them.

  • Related: How to Create a Budget (When You Really Don't Want To)

If you are a spender, and you are like I was, you will find yourself making excuses for your purchases. Whether you are a frugal spender of an out of control spender, you can break the spending habit and reach your saving needs by budgeting.

IT'S TIME TO CHANGE YOUR WAY OF THINKING

To break the spending habit you really have to change the way you think about spending money.Click To Tweet

This really became clear to me when I started the “No New Clothes For An Entire Year” challenge. You can read about the beginning of this journey here. By forcing myself to not buy new clothes, I realized how unnecessary all of my earlier clothes purchases were. In fact, there have been times when I feel sick to my stomach when I think about ALL of the money I spent on clothes. With all of clothes I purchased, I could have went on a really cool trip, had way more in my retirement, or saved for a huge remodel on my house. These are all the things I really want, but now can't afford because of my spending habit.

You have to stop thinking as a frugal spender and start thinking like an actual saver. To do this you have to start asking yourself tough questions before making purchases. Some of the questions you must ask yourself are:

  • Do I REALLY NEED this?
  • If I actually need it, is there a cheaper alternative or can I simply make it myself?
  • Can I get what I want for free?
  • If it's something I need to replace another item, is there a way to make the item I do have last longer or can it be fixed without a new purchase?

To think like a saver, you really have to think about the future. If you spend money now, how will it affect your goals later. If you want to spend $1000 on a new sofa, that's a $1000 less towards a dream vacation or a comfy retirement. You have to spend the money you do have the way you WANT to make sure you are achieving long-term financial goals.

  • Related: How 6 Bank Accounts Changed the Way We Manage Our Money

CREATE A BUDGET THAT'S REALISTIC

Create a budget that is realistic. To do this, you really have to know where your money is going. Make sure to check out my Income VS Expenses post here to help you figure out where your money is actually going. One of the most important parts of a realistic budget is making sure every dollar of income has a plan. Here are some basic steps to help you get started on creating a budget.

  1. Figure out your income & your expenses.
  2. Subtract your income from your expenses. Do you have money left over? Make sure it has a plan and is being used for saving or retirement (this includes any long-term financial goal such as a family vacation)
  3. Once you have all of your income allocated for, make sure you have a plan in place.

CREATE A PLAN THAT IS FAIL PROOF

As a spender, it takes a lot of motivation and will power to stop yourself from unnecessary spending. Here is the plan that I used which made it almost impossible for me to fail.

Once I had my budget created, I used automatic deposits for my savings and used a cash envelope system for my budget. With a cash envelope system, it really allows you to see how much you have left to spend in each category.

I would have my paycheck deposited into my bank account and then I would withdrawal the amount I needed to cover my bills. I left the money that was automatically being deducted for my savings in my checking and I took out the rest.

I would then organize the amount I had to spend in each category into envelopes. When there was no more money in the envelope, that was it, I had nothing left to spend. Seeing that I only had $20 left in my grocery budget made it easier for me to say “Ok, I won't get soda this time because I really don't need it. I am going to get milk and eggs instead”. Talk about a reason to stick to the grocery list! If you want to learn more about a cash envelope system, make sure to check out my step-by-step article HERE.

By having automatic deposits from your checking into your savings, you will accomplish the most powerful rule of Paying Yourself First. By doing this, you can't spend the money you plan on saving, because it's already gone and is being used for another purpose. (Check out CIT Bank's Savings Builder.)

From experience, I will tell you that going from a spender to a saver was not easy, and even now I slip up. But we are human, we make mistakes. Don't beat yourself down if you make a spending hiccup after you implement your plan & budget. Pick yourself up, note the mistake, learn from it, and move on.

What are your favorite things to spend money on?

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Filed Under: Budget Guides, Budget Tips, BUDGETING Tagged With: BUDGET, BUDGET GUIDES, BUDGET TIPS, SPENDING

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Comments

  1. beth kelley says

    May 10, 2016 at 10:52 am

    Great post! We are debt free and love it! A budget is the key.

    • kumiko Ehrmantraut says

      May 10, 2016 at 1:14 pm

      Bring debt free is HUGE! Great job! A successful budget really pays off!

  2. Chauntel says

    May 10, 2016 at 11:07 am

    I used to be a spender. The older I have gotten the more I have become a saver. I do need to get better at budgeting, it is still a work in progress but I definitely have reined in my spending. That was a huge accomplishment for me.

    • kumiko Ehrmantraut says

      May 10, 2016 at 1:15 pm

      Chauntel, great job on taking control of your spending! Wishing you all the luck on your successful budget!

  3. Katelin says

    May 10, 2016 at 5:08 pm

    The tricky part of this balance is knowing where to save money and where it’s worth spending a little extra to save in the long run. One of the things I’ve heard is worth the full amount? Kids bicycles!

    • kumiko Ehrmantraut says

      May 10, 2016 at 8:10 pm

      I agree with the kid bikes:-) That is very true, sometimes spending a little more money up front, can save you more in the long run! Thanks for the comment!

  4. The Practical Saver says

    May 13, 2016 at 7:02 am

    For a lot of people, whenever they hear budget, they think about getting deprived. But the truth is, it isn’t. I believe that budget is needed by just about anybody. I think the key ingredient in making a successful budget is changing attitude, which is what you stated above.

    • kumiko Ehrmantraut says

      May 13, 2016 at 8:20 am

      Thanks Allan. I totally agree!

  5. Rheona says

    June 15, 2016 at 11:18 pm

    I’m trying to start a budget now and I am leaning towards the envelope system. I’m hoping that it helps me to cut back on things I don’t really need! Thanks for the tips!

    • kumiko Ehrmantraut says

      June 16, 2016 at 1:26 am

      I love the envelope system. It really allowed me to stick to my limits. It was the only way I could have paid off debt. Thanks for the comment Rheona!

  6. Cara @ Fashionably Frugal says

    November 23, 2016 at 10:13 am

    I am the same way as you are. I loved it when I read about your shopping the clearance rack and coming home with more than you wanted or needed. I thought “That’s me!” Now I just avoid going into those shops where I know I will be drawn towards buying things I don’t need. It really has curbed my spending impulse and instead I am enjoying watching the money go into my savings instead. Thank you for sharing your experience!

    • kumiko Ehrmantraut says

      November 23, 2016 at 10:43 am

      Thank you Cara!

  7. Joni says

    January 27, 2017 at 7:30 am

    This fit me as being a frugal spender, it still not a saver. Thank you for helping me to further open my eyes!! Time for even more changes!!

    • kumiko Ehrmantraut says

      February 3, 2017 at 2:52 pm

      Thanks Joni!

  8. Anonymous says

    March 10, 2017 at 12:45 am

    Food and clothes

  9. Leah | A Relaxed Gal says

    March 25, 2017 at 11:13 am

    Like many other commenters have said, having a budget is key. I’m naturally a saver. I have a budget that I would stick to like glue so I had a hard time justifying spending money on things I didn’t necessarily need.

    Now that I’ve achieved many of my savings goals I’ve found myself loosening up my budget a bit more and spending more on wants without neglecting needs. Without my budget I wouldn’t feel comfortable doing that.

    Leah | A Relaxed Gal
    arelaxedgal.com

    • kumiko Ehrmantraut says

      March 26, 2017 at 6:58 pm

      Thanks Leah!

Hello, I'm Kumiko, but everyone just calls me Miko. Welcome to my blog, The Budget Mom. I am an Accredited Financial Counselor® , and mom to a rambunctious boy. Come along with me as I strive to live a life I love on a budget that I can afford. Read more about me.

RECENT YOUTUBE VIDEO

Ryen & I are talking about our June 2022 budget numbers! Not only do we show where our dollars went, but we also discuss if we stuck to our budget limits.

In this video, we are going over some heavy spending I had in June (thank you, sinking funds!) and Ryen gives an update on her debt payoff timeline. 

What do you do with your budget after the month is over, and you’re ready to begin a new month? Most people don’t realize it, but your spending throughout the month gives you some incredibly helpful information.

One of the first steps to creating and sticking to a realistic budget is tracking your expenses. Your spending is the underlying foundation for creating a budget and ensuring that your budgets in the future are successful.

If you are not aware of where your money is going, you can’t make the best decisions for your dollars. Today, I am going to show you how to extract all of the vital information from your expense trackers using the "Where Did My Money Go?" Worksheets.

CHAPTERS:
00:00 Introduction
09:57 Miko's Budget Category Breakdown
12:46 Miko's Investment & Savings Breakdown
14:21 Miko's Spending Comparison to May 2022
15:10 Ryen's Budget Category Breakdown
17:18 Ryen's Debt & Savings Breakdown
18:22 Ryen's  Spending Comparison to May 2022
19:08 Conclusion


➡️ HOW I TRACK MY SPENDING: https://bit.ly/3aIe89I
➡️ HOW TO USE A BUDGET CALENDAR: https://bit.ly/2IzF2Vj
➡️ FINDING YOUR WHY: https://bit.ly/3aJUryj
➡️ THE BUDGET MOM'S FINANCIAL FREEDOM STEPS: https://bit.ly/3cfJXsp
➡️ HOW TO GET STARTED WITH THE CASH ENVELOPE METHOD: https://bit.ly/2vQJaO5
➡️ HOW TO CREATE A PLAN OF ATTACK TO PAY OFF DEBT: https://bit.ly/2wDETxF

ABOUT ME

I'm the blogger behind https://www.thebudgetmom.com. I have a rambunctious 6-year-old son, live in Washington, and I'm passionate about helping people with money management and personal finance. Let me know what you like to learn more about! Leave me comments and suggestions on my video and let me know!

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