How to spend less money, so that you can save more of your paycheck. Follow these methods, and you'll actually save up an emergency fund, plus pay for that next big purchase with cash instead of credit!

There are two ways to save more money: spend less of it, and earn more of it.woman looking over a bridge with arms stretched out and blanket on back, text overlay "how to spend less money"

I specialize in both how to spend less money, and how to save more of it.

And I became particularly interested in the spending less of it part after watching a television show called Who Wants a Clean House.

Have you ever stumbled upon a rerun of Who Wants a Clean House? It's a much more glamorous, less overwhelming version of Hoarders: Buried Alive, where experts come in to declutter a household before leaving them with a newly decorated space.

One of the hosts, sassy Ms. Niecy Nash, is a no-nonsense, audacious lady with a real knack for giving it straight to people. She attempts to keep the whole project on track, as well as provide some emotional guidance to the members of the household aimed at the root of their hoarding problems.

One particular episode I watched over a year ago caught my attention, showing very efficiently the relationship between a low bank account balance and the stuff you possess.

While staring at a bin of no less than 30 designer lotions in a girl's bedroom — just one little corner of this lady's over-cluttered life — Nash disapprovingly asks, “Why do you have all of these lotions?”

The young, twenty-something regurgitates marketing language we've all heard countless times before. “Because when I walk into the store, the more you spend, the more you save.”

Without skipping a beat, Nash replies, “Let me ask you, why did you move back into your mother’s house?”

“Because I ran out of money.”

“Ding, Ding, Ding, Ding, Ding”. Ms. Nash imitates a brash bell of harsh realization, and you can just see this new line of thinking running through this girl's mind.

And that's when I got it:

Spending problems often manifest themselves physically.

Do You Have A Carrie Bradshaw-Sized Spending Problem?

Thirty-Five year old Carrie Bradshaw had a stunning financial realization during an episode of Sex and the City. Let me set up the context here: Carrie and Aidan’s engagement fizzled after Aidan had bought Carrie’s and the adjoining apartment in order to knock down the wall and live in wedded bliss.

The breakup included a sticky financial mess as Carrie now needed to buy her apartment from Aidan or vacate the property so that he could liquify and get out. Carrie could not fathom leaving her apartment, so she attempted to get a mortgage from the bank.

Unfortunately, her assets were slim: our favorite New York sex columnist had just $700 in checking and $957 in savings. The bank teller inquired about property, stocks, or bonds. Carrie shook her head no, no, no. However, she soon discovered where all of her money went to: the shoes in her closet. The ridiculousness of her financial situation suddenly dawned on her, and she exclaimed,

“I’ve spent $40,000 on shoes and I have no place to live? I will literally be the old woman who lived in her shoes!”

As you look around your own home, parking lot, closet, and garage, do you notice a manifestation of your money? Has it ended up accumulating in plain sight of you instead of in a bank account?

I'm going to speculate on Carrie’s situation a bit to use her as an example; let’s see if any of this rings true. Carrie’s been working for most of her adult life. Just like us, Carrie graduated with a career in mind but had to work her way up to her Column and eventual Vogue Column placement at age 35. She has put years into her work, and although she loves what she does, she has nothing to show for it in her bank account — and this bugs her.

Now that she's faced with a large financial problem, she's forced to either move or ask her friends for money. She has a lot of clothes, and a lot of shoes; to be honest she would love so many more of both if given the opportunity. But when she cannot handle this adult financial situation by herself because of her past choices, her power and independence is a bit diminished.

And it makes her angry.

How does this turn out for Carrie? In typical, fairy tale television fashion: her bff Charlotte was willing to let go of a $30,000+ engagement ring for a marriage that went wrong and gave it to Carrie as collateral on a mortgage.

Most of us would not be so lucky.

I am lucky that I learned the lesson early on to not accumulate for accumulation’s sake. Or, at least I learned most of this lesson. Turns out, stockpiling things instead of stockpiling money is not something that only impulsive shoe-shoppers like Carrie Bradshaw or people with tool fetishes like Tim the Tool Man Taylor do.

Psst: you might want to check out my post on dealing with buyer's remorse.

Understand that Spending Money Typically Does Not Save You Money

This is probably not a newsflash for you, but it is something that we as consumers (heck, as people) are faced with everyday from marketers and sales people alike.

How many times have you heard on a radio ad from someone offering up the newest sale, “the more you spend, the more you save!”?

While this helps sales people turn more units without increasing their costs of finding new customers to do so, this kind of mentality could lead to you having a future as the woman who lived in her shoes, or the man who lived with his tools.

Now, of course there are cases where spending money can save you money. Such as:

  • Purchasing something that teaches you a technique to save you money in the future, like a fundamental cooking class, a book on how to do your own oil changes, my eBooks on the Drugstore Game, etc.
  • If there is something you find yourself renting often, like a carpet steam cleaner because you have pets, then it might be worth it to invest in one yourself. You then save the money by it essentially ‘paying for itself' over time and use.

But in general, walking into a store and spending more money does not yield you more savings. Tweet This!

As you look around your own home, parking lot, closet, and garage, do you notice a manifestation of your money? Has it ended up accumulating in plain sight of you instead of in a bank account? Or are you one of the “lucky” few who likes to accumulate your money in savings instead?

How Can I Spend Less on Shopping? Decrypt Marketing Messages

An alien from another planet watching our holidays unfold for the first time might think our ability to love, be loved, find a job, feel worthy of ourselves, and be friends with cool people is contingent upon our belongings alone.

Its because of the marketing messages put out in front of our faces.

But let's face it: some of the most commonly used marketing messages around the holidays + beyond are plain bologna disguised as roast beef.

So how do you know which deals to focus on so that you can avoid getting sidetracked by the holiday sideshow?

I'm going to help you get past the hype by decrypting 3 commonly used marketing messages, starting with the one that inspired this post:

Marketing Message #1: The More You Buy, the More You Save!

Will you actually put money into savings from buying products? No. In fact, it's just the opposite. By taking people up on this marketing message and making that purchase, money flows out of your hands and into theirs.

But saying this is far sexier sounding than saying the truth, which is: the more units you purchase from us, the less the cost per unit you will pay out of your pocket.

Marketing Message #2: Hurry! This One-Day Sale Won't Last Long

Does anyone else get tired of hearing about Macy's one-day sales…which happen to take place probably 60 one-days out of the year? I feel like if you're going to call something a one-day sale, it should happen maybe once or a few times a year at most so that people get really amped up about it, like Filene Basement's Running of the Brides where wedding gowns normally priced up to $9,000 are priced down to as low as $249.

Take the urgency out of this equation by realizing that most stores who advertise one-day sales actually will put the same items on sale again in the next few months. And what happens if you find an item, pay full price for it, and then it goes on sale weeks later? If you paid with your credit card, then use your price protection program to get a refund of the difference. Over the years I've done this twice, for a total refund of $31. Ka-ching!

Marketing Message #3: Buy One Get One Free, Just Pay Shipping & Handling/Processing & Handling

Okay, okay, I expect that free deals are going to have a shipping cost tacked on. It seems quite fair, anyway. But when it's not fair is when manufacturers use this as a scheme to recoup some costs while still maintaining their marketing message that you are getting a “free” product.

Case in point: I once had an offer in my inbox saying I would get a free photo book after purchasing another one. Score! I love to scrapbook (like when I created this inexpensive family heirloom to commemorate our Hungarian roots).

Upon opening the email, I found that you had to pay shipping. Okay, I get that.

But after ordering the photo book, they charged me an egregious $10.99 for shipping & handling, for each photo book! So I had to purchase the first book, and then pay an inflated $21.98 in shipping & handling…meaning I certainly did not get a “free” photo book, after all.

Another example is on where they offer a Buy 1 Get 1 Free deal, plus processing and handling (P&H). So you end up paying $7.99-$10.99 P&H for the first hose, then an additional $7.99-$10.99 P&H for the second hose…coming to a total of at least $15.98 in P&H fees (which likely covers their cost of manufacturing for that second hose they're giving you for “free”).

Bottom line with these kinds of deals? Be sure to check how much the shipping & handling/ P&H will cost before making your decision. Then you can determine if you're really getting ahead or not.

Could any deals offered under these marketing messages still be a deal for you? Absolutely. But it's important to not go into them thinking that you are getting exactly what the marketing hype says you are…because in most cases, the truth is being stretched further than a $1.00 bill at a $1.10 dollar store.

Remove Temptations from Your Life

Here’s a fact that I haven’t discussed much here: I used to work in market research and marketing. My old bosses would loathe the types of articles I write on Frugal Confessions and surely lay me off again if they had the chance! After all, I am the worst kind of consumer: I have little brand loyalty, a low price point, and refuse to pay retail. I probably should not be in the business of telling Fortune 500 companies how to sell to their target consumers…but that is what I used to do.

My short stint in the marketing industry taught me a lot about how consumers are targeted. However, my lifelong passion with being frugal and saving money has taught me much more, such as how to deflect even the best marketing attempts. Going to stores robs us of our time and energy, both of which most Americans are feeling crunched on. Why use your precious time driving to the store, walking up and down aisles, waiting in line, and then driving home? I haven’t even cracked open most of my Christmas gifts from last year and we’ve passed the mid-year mark. Why continue to purchase new things at the store that takes time away from me using my other gifts, and that I probably won’t find time for over the next year?

If you find yourself spending more money than you would like, or getting sucked into all of the “sales” out there, think about wrapping an orb of energy around yourself that allows you to deflect consumerism by not allowing it into your life. We’re talking a deflection shield for advertisements, marketing, impulse products, stores, etc.          

  • Pay at the Pump: Swipe a credit card or debit card at the pump instead of going inside the store and you won’t be tempted to buy snacks, cigarettes, drinks, lottery tickets, etc.
  • Unsubscribe to Everything: Emails have become another way for companies to get their products in front of your face. When I sign up for something that I know will continue to send me newsletters and promotions even after I receive the coupon or discount, I sign up with an email I have setup specifically to ignore these types of correspondences. Then, I ignore this email account; I haven’t even signed into this account for about six months. Even so, many of these types of things end up in my regular email account as well. I make a point of combating this by going through and unsubscribing to various things every six months or so (usually when I get sick of the number of emails I delete without reading). The unsubscribe button within newsletters and update emails is small, but is generally located either directly above or directly below the email’s main image.
  • Recognize Environmental Cues and Fight Them: A dopamine-rich part of the brain named the striatum memorizes rituals and routines that are linked to getting a particular reward, explains National Institute on Drug Abuse's Dr. Nora Volkow. Eventually, those environmental cues trigger the striatum to make some behaviors almost automatic. For some, this is purchasing popcorn in a movie theater even though you don’t normally like popcorn, a hot dog at the baseball game, or going shopping when you feel in the dumps. When you find yourself at these places, don’t just purchase a product out of routine. Realize that you may be wired to purchase something, even if you don’t really want it or need it. This is especially true if advertising has convinced you that certain things just go together like jewelry and kissing (i.e. Every Kiss Begins with Kay…Jewelers). These sorts of messages just work to increase the retailer’s bottom line, not your satisfaction.
  • Filter Ads Online: The internet has several forms of advertising, including pictures, animations, text, or pop-up windows. There are ways to get around these ads, though you won’t be able to get around all of them because they are responsible for the free content everyone enjoys. Almost every modern web browser has some sort of software included that attacks pop up ads. Content filtering, which prevents external files from loading, is all ready included in Internet Explorer 8, and Adblock Plus can add content filtering onto Google Chrome and Mozilla Firefox.
  • Go Grocery Shopping Only Twice a Month: Some people grocery shop every week, others find themselves in the grocery store several times a week to pick up extraneous ingredients for a recipe, milk, and/or bread. By grocery shopping every other week, you are cutting down the amount of exposure to marketing, advertising, and products.
  • Keep Busy: I go entire weeks without hitting a store (except for the gas station). One thing I have noticed is that when I put my energy and focus into my writing and work, I don’t even have the desire to go to the store. With idle time, going to the store or mall can seem like a good way to spend a Saturday afternoon. When you only have a few hours of idle time per day, cooking a new recipe, watching a favorite television show, reading a book, etc. seem like much better ways to spend your time.
  • Get Rid of Junk Mail: Don’t you hate it when you order something from a store and then receive their catalogue for years afterwards? Honestly, I always think that the store loses money on a customer like me because I receive their pricey, color ads long enough that it’s a complete wash from the original product that I purchased. If catalogues tempt you and also if you want to cut down on waste, call the companies or take other steps to get taken off of mailing lists.
  • DVR Television Shows: We have AT&T Uverse and it comes with a DVR. Being completely un-tech savvy and generally uninterested, it took me months to realize the potential of this device. Not only can you tape things to watch at your convenience, but you can then fast forward through commercials. You can virtually eliminate commercials from coming into your home!

Light pollution takes away from the view of the magnificent stars at night. The stars are still there, but because of the glare of man-made cities and lights you just cannot see them as well or clearly. Think about the glare that advertisements have over your life. If you were to cut out these distractions, what might your mind have time to do? Where might your focus and efforts go instead?

How to Train Yourself to Spend Less Money

In order to retrain yourself to stop spending so much money, you've gotta start by putting some physical limits up between you and transactions.


  • Physically Separate Yourself from Your Credit and Debit Cards: There are several ways you can physically separate yourself from your plastic. The first option is to put them into a plastic sealable bag, fill it with water, and put it in your freezer. You can also cut up your cards (but still keep the accounts open for credit history purposes or to continue to pay off debt), or you could open up a safety deposit box at the bank and put your cards in there. Each of these methods gives you a cooling off period to really think about your purchase before you make it (figuratively, and literally, in the case of the ice block).
  • Purchase Penalty-Laced CD Savings: You likely have a few large expenses each year, such as property taxes, six month insurance bills (if you pay these all at once sometimes you save a few bucks), tuition, etc. Do you ever get afraid you might spend the money before the bill is due, or that somehow it might just get absorbed in the no man's land between your checking and savings accounts? Purchase CDs in the amount of your planned, large expenses. Make sure they mature right before your bill is due. Not only will you earn a little bit of interest, but because there's a penalty to cash them out (not to mention you might have to travel to an actual brick-and-mortar bank) you're not as likely to touch that money.
  • Pay Too Much in Taxes: I would normally never recommend doing this, because when you pay too much in taxes, you are giving your money to the US government instead of it earning interest or otherwise working for you (you're welcome, Uncle Sam). But we're talking about ways to physically restrain you from spending your money…and I can't think of a more effective method then involving the IRS. Work with your HR professional to purposefully have them withhold more taxes than you should actually owe (typically you'll change your withholding on a W-4 tax form). It's pretty much forced savings. The trick here is that at the end of the year when you receive your tax refund, you need to immediately put this money into a savings account and forget about it—it’s not an extra lump sum that you can spend.
  • Use a Gift Card Allowance System: Have you seen those gift card kiosks popping up in everywhere from grocery stores to Home Depot? Pick yourself out several at stores you frequent (including the grocery store), and fund each with your budgeted money for that month. You can either fund one gift card with all of the money for each of your categories of spending (such as a Visa or American Express gift card), or use one gift card per category, such as food, gas, and entertainment. When the gift card value is gone, so is the spending. Note: this physical restraint might penalize you with an activation fee, so be prepared.
  • Put a Freeze on Your Credit: When you choose to freeze your credit, then each decision that is made to open up a new credit card or credit line, purchase a car, a home, etc. will entail a phone conversation to a representative at each of the three credit bureaus (Experian, TransUnion and Equifax). Talk about an inconvenience!
  • Un-link Your Credit Card Information to Online Stores: It is so much easier to just click “buy” online when you have your credit card information saved to your account and do not need to enter it all over again. By un-linking your credit cards and deleting the information, you are introducing one more physical barrier between you and whatever item you feel you need/want.

Make this Mental Barrier — Use the Psychology of Poverty

Practice this phrase, “I can't afford that.”

People in impoverished situations find themselves only thinking about a few vital things. If you are impoverished, you are working with a very tight (or nonexistent) budget, you are living paycheck to paycheck, and you are prioritizing your purchases around what you need to survive: food, minimal clothing, heating/air conditioning (we live in Houston, where it is a necessity to have A/C in August and September at least), and shelter.

All else is fluff.

So if you start thinking like you're in that situation, and you can't afford most things, then you'll start to see all the rest as fluff as well and you can better prioritize spending mainly on necessities only.

Do you use any sort of physical barriers to keep you from spending your money? I'd love to hear about them in the comments below (and you might help someone else out!). 

How Can I Stop Spending So Much? Don't Fall for these Sales Tactics

A few weeks before graduating college, my mother and I went to a local mattress store to start shopping for something I would need for my first apartment: a bed to sleep on. We entered one of those strip mall-mattress stores and started browsing the field rows of beds. As we walked down the first aisle, my hands grazed playfully across the varied textures of the different fabrics. I occasionally pressed down to calculate the firmness of the mattress, and if I found one that was particularly appealing, I would sheepishly sit on the corner of it. I remember looking around, wondering if people ever lay down to test drive, or if they just sat down and figured that was good enough? This was an important adult decision, and I wanted to give it the care and thought it deserved; after all, a person spends approximately 1/3 of every day lying on their bed (and probably about 2/3 when you a recent college grad and do not have any other furniture).

I must have been sitting on my third or fourth mattress when the Mattress Man appeared. Mid-sized, mustached, and smiling, he offered his help and services to us. “Perhaps I can show us some of my personal favorites?” I nodded in agreement, and our journey began.

Mattress Man escorted us to the back corner of the store and engaged us with his tales of beautiful sleep and sugar plum fairies dancing in our heads on one particular mattress. And it was gorgeous: the beaded texture, the pillow-like fluffiness restrained only by designer buttons, and the delicate cording around each of its corners. He laid down on the bed while talking to us, motioning for us to do the same. I felt a bit strange, but my mother reassured me with the words “you have to sleep on it, so you might as well”. I took the plunge, lying side by side with Mattress Man, thinking of the wonderful dreams to be had and slowly allowing my inhibitions to go…until a tag caught my eye. I was horizontal at the time so I thought it was a mistake. I quickly rolled over to my belly and grabbed the price tag: $1,200.

Had I missed a step? Had our salesman not realized I was a college-grad-to-be with less than $1,200 to my entire name?

Needless to say, we left that day without a mattress. He pranced around from bed to bed, trying to find one that my eyes did not widen over, but the sticker shock from the first one never left me. He rationalized with us, detailing the health effects of my poor mattress at home, trying his best financing options and even going so far as to say that my performance at my first job out of college was guaranteed to be better as a result of sleeping on one of his star mattresses. He used peer pressure, saying that sticker shock was normal for all first-time apartment dwellers and that all the people my age “grow-up” and purchase a high quality mattress. He even brought out the “investment” word, and how buying this mattress was somehow an investment in my future.

I wonder sometimes if he is still in that strip mall selling mattresses. Even if he has moved on to something else, I know that his and others sales pressure tactics are still in use. Because of my experience with the Mattress Man, I have spent the last several years paying close attention to the sales pressure tactics out there. I’d like to outline and share them with you all below.

  1. Instill a Sense of Urgency: If I hear one more commercial with that music “One Day!” for another “one day” Macy’s sale, I might pull my hair out. Honestly, how many one day Macy’s sales can there be in a year? A while back when I had a quote done for granite countertops, they said we had until that Friday to go through with it because it was a special for Mother’s day. Two months later I saw an advertisement through them for the same deal!
  2. Instill a Sense of Rarity: A good salesman can make even a mud pie appear as if your life cannot continue without one (well I guess I could use one to mold my own bricks for that one missing in our back patio…wait, what am I saying?). Be wary of countdowns on websites and the QVC channel indicating that only a select few number of that item is left. If this is actually true, you can still most likely find another vendor who is selling the same thing or something very similar (thank goodness for the internet age).
  3. Pull on Your Heart Strings: How dare you not provide whatever your mother wants after she gave birth to you and raised you for all those years. Your kids aren’t going to fit in socially and this will come back to haunt you unless you purchase this item. Who wouldn’t treat their spouse to some new jewelry, especially after what you did that other day?  Many ads attempt to pull at our heart strings, which can be very difficult to say no to when dispelling our guilt or adding to our good karma is simply a swipe of the credit card or a ringing of the cash register away.
  4. Offer a Proposition You Simply Can’t Refuse: Do you want to save the planet? How about the orphan children? I don’t take these issues lightly, but me purchasing a product is not going to make or break these issues. However, when faced with these questions, most people (me included) automatically think “yes—I do want to help”. Now you are in the salesperson’s hand; all you need to do is purchase their product and you can feel like you are part of the solution to a much larger issue.
  5. Recalibrate Your Definition of “Expensive”: Most of us know an approximate amount that we are willing to spend on a purchase before we start to shop for it.  But a salesperson has a trick to break your price barrier: start off by showing you a top-of-the-line product that has all of the bells and whistles and is well out of your price range. You are now salivating, though politely refusing, and now the salesperson can show you a more moderately priced item (that is still above your price range). Suddenly this product seems reasonable to you.

Remember: a good salesperson does not overstep his/her boundary into your life (like interrupt your line of thinking or breathe down your neck while you are perusing). A good salesperson helps you to find what you are looking for, as well as educates you on better, or more efficient, or alternative products they think might interest you. And a good salesperson knows how to take “no” for an answer.

Easiest Way to Spend Less Money — Pay Cash for Everything

When you pay cash for items, you automatically think more about whether or not you need that to make that purchase.

And not only that; you think of ways to decrease the cost before you actually do make the purchase.

Since paying off our non-mortgage debt with a Dave-Suze hybrid approach and vowing to only pay cash for all purchases going forward (we do use credit cards for the reward points and then pay them off completely before the grace period is up), we have had a few big-ticket items come up that have rattled us a bit. These have included a new A/C unit when ours completely broke down ($7,800 minus a $1500 tax credit), a car breakdown, and now foundation problems due to the severe drought. In each of these instances we have had several options which amounted to paying the cash up front for the item or slicing the huge cost up into monthly payments with interest or other fees. Taking the A/C unit replacement of last summer as an example, here’s how our options looked:

  • Pay Cash: $7,800
  • Pay by credit card and do a 0% balance transfer for 12 months: $650 per month + cost of balance transfer
  • Financing through the company: $650 per month + interest

We don’t want to get ourselves back into debt and have taken great pains to save up enough money to be able to afford what life has to throw at us. But just because we have the money set aside does not mean it is easy to spend. In fact, we are finding it extremely unpalatable to spend money now. Savings represents money we have all ready worked for, whereas borrowing represents money we have not worked for yet, and so perhaps that is why it is so hard to part with savings—we all ready know how much work went into that money. Let’s face it: breaking down big ticket items into small monthly payments against future earnings makes the purchase price much more digestible than having to pay with earned cash all at once.

Retailers know this, which is why you can now pay monthly payments on an assortment of items besides vehicles and mortgages. In fact, typically monthly installments or monthly payments are interest free for a time period because they don’t need the extra profits from interest rates—they know you are much more likely to purchase a high-end item if they tell you what the monthly payment is going to be, and so by adopting this model, they make more sales. Infomercials break down products into “three monthly payments of just $19.95” (really $59.85), jewelry (diamond earrings for $495.00 or just 5 payments of $99), Dell’s monthly automatic payment plan allows you to pay just $20 per month (really $499.00). See how monthly payments make everything seem affordable to you right now?

Aside from the obvious benefits of not having to pay interest and not mortgaging your future by paying with credit, paying cash for everything also does have another surprising benefit I did not foresee: a reason to scrutinize the total purchase price of whatever you need and want. Doing so brings a lot of clarity to the situation and has all ready helped us to walk away from some purchases and stash away even more cash. The downside? The purchase price of even necessary big ticket items has sometimes led us into paralysis mode due to its large price tag.

Do you pay cash for everything, or are you looking to incorporate this into your future finances once you pay off your debt? If you have experience with this, has it changed your purchase decision-making at all?  

Conduct a Spending Audit

Hint: the easiest way to increase your monthly cash flow is to actually stop spending leaks.

You may be wondering how to make easy money online, by negotiating with your boss, etc. But you know what? What you're really wanting is more money in your monthly cash flow. And the easiest way to get that is through auditing your monthly spending + plugging the leaks.

There are two great things about shaving off costs on monthly expenses. First of all, it’s a one-time surge of energy that will continue to reap you money down the road (do once, enjoy over and over again). Secondly, the motivation to conduct an audit usually comes when you are experiencing some sort of financial downturn. Which means taking the time to tighten up now will actually give you a quicker financial bounce back once you are back on your feet!

You might think that auditing your own monthly costs means you will have to get rid of services that you enjoy. I’m here to show you that many times that is completely avoidable. Not only did we give up next to nothing, but in some cases we actually added to our services. Intrigued?

Here’s what we found during our audit:

  • Auto Insurance: Back in December, our auto insurance was set to increase $20 per month for the same coverage. In one phone call with our insurance agent, I was able to hack off $10 of that increase, as well as increase our liability coverage by $60,000.
  • Homeowner’s Insurance: There was not much gained in the home insurance arena. However, our agent did give us a discount of $40/year ($3.33/month) for the same coverage.
  • Netflix: Originally we were signed up for a $21.63 plan that allowed for streaming (Paul liked this for his business trips). We lowered our plan for a new cost of $12.98/month.
  • Cell Phone: We did well here. I was originally paying $83.23 per month for 450 minutes, 2 GB data, and unlimited texting. After my contract ended, I switched to Virgin Mobile’s $35 + tax/month plan. Paul’s cell plan ended this month, and we switched him from a $128/month bill (his company used to pay all of this, but we’ve picked up the tab for the last four months) to a $45/month plan with Straight Talk.
  • Business Spending for Blog Carnival Submittal Service: I used to pay for a service ($20/month) to submit my blog posts to blog carnivals, but decided that it was no longer worth it. And guess what? My traffic is actually higher!
  • Phantom Credit Card Charges: Paul had two company expenses still going on our credit card that used to be reimbursable but no longer are (a $12.95 monthly expense to Experts Exchange, and a $15.09 monthly expense to ATT Data). He no longer needs or uses either, though it took us a month after the layoff to catch the charges.

Our gains include $60,000 in additional liability coverage, unlimited data on my cell plan (my old cap of 2 GB was an issue for a full-time blogger) and unlimited texting for Paul (he used to have a cap). Our only decreases in service are we no longer have streaming through Netflix and I no longer use a blog carnival submission service, both of which we no longer have a use for.

And the monetary gains? A whopping $201.34 back into our monthly cash flow, or $2,416.08 over the next year. Not bad!

How to Try this Out for Yourself

Try this out for yourself.

Here are three steps to achieve this:

  • Identify Recurring Service Charges on Your Accounts: The easiest place to start is to look at each of the services you pay for {magazine subscriptions, premiums, cable packages, etc.} and lop off any that you don’t use. Hint: you can call your credit card or bank and ask them to look at your account to tell you of any charges that are recurring.
  • Ask for Specials and Discounts: Next, tackle the remaining services you'd like to keep. Call up your providers and ask if they have any specials or discounts available to you.
  • Substitute in Cheaper Alternatives: Did those cuts not go far enough, or perhaps your service provider was being stingy with the discounts? Look for cheaper alternatives by shopping around. It may take a few hours, but it’s usually well worth the time investment as the months of savings rolls on and on.

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Spending Out of Control – How to Stop the Bleeding

Some months it's hard to curb out of control spending. We had a month like this after we purchased our home, and it seemed like we were bleeding money.

It begins with one large bill. Then something happens, exacerbating the fact that you just spent a lot of money on the first large bill.

Perhaps your car breaks down, or your appliance breaks down, or you have a large medical expense. You spend the rest of the month a little clammy around the wrists, vulnerable to the outside world until your next paycheck makes its way into your hands.

Do you ever have a month that you just can’t seem to get out of, financially anyway?

The way my budget works is each month an allotted amount goes to bills, to our Roth IRAs, to our savings, and to spending.

Last month, the spending category was simply out of control! In fact, I have never spent so much money in my short adulthood life as I have last month, September, 2009.

I feel like Stretch Armstrong.

Our Month that Would. Not. End

Our first major expenditure was we bought a home.

This was a planned expense, although I must admit that we did not know exactly how much to bring to closing day until the day of, and it was definitely several thousand more than we had originally thought.

Then, we had to purchase a refrigerator. We managed a great deal; Energy-star rated, stainless steel Frigidaire at 50% of its cost because we bought it at the scratch and dent store.

Next, we hired movers. Originally we had not planned on doing so, but several people we spoke with said that it cost around $180 for them to move everything. After renting a truck, paying for gas, and taking all of Paul’s family out to lunch afterwards as a big thank-you, it would have cost us $180 anyway. So instead of taking up Paul’s family’s Saturday, we decided to go with the movers. The final bill? $462. Whew (still not terrible, but we were not expecting that, and we could have asked family to help instead to shave the cost).

And the icing on the cake, perhaps everyone’s nightmare (purchase a new home, and not one week afterwards, when you are in that vulnerable period between when you’ve spent most of your savings and when your emergency fund is back up to fully functional), my car died on me. We purchased another used vehicle (paid cash—no new loans for us!).

Finally, we undertook our first home project together: my office! So we went to Home Depot this past weekend and purchased paint supplies, a paint color, a smoke/Carbon monoxide alarm, batteries for the alarm, etc. Getting my office up and running is our top priority so that I can get back to normal writing routines (am currently writing this at 8:00 a.m. on our couch).

Things that Have Mitigated Spending

Honestly, this month could have been a lot worse, and the main reason why it was not was the generosity of so many people to whom we are very thankful for.

To begin with, even after negotiations, the past owners generously offered to leave us their washer, dryer, and kegerator! The washer and dryer are saving us lots of money, and certainly lots of headache, time and energy. I mentioned that we saved 50% on our major appliance purchase, which is energy star rated and this will help our energy bills for many years to come.

We packed all of our belongings up ourselves with free boxes from our neighbors and Paul’s boss, which was very helpful. One of Paul’s brother and sister-in-law brought us a meal the first weekend we moved in (which we thankfully ate for two nights!).

Our previous landlord generously prorated us half a month’s rent for September, even though we did not properly give her the 30 days notice (because of not knowing when the closing day was), which was a big help.

We got free movie tickets from my swagbucks earnings and were able to take a break from all of the stressful details and go to the theater.

I was able to use my free $40 Wal-mart gift card for our first week’s worth of groceries. I was also able to use a free $40 gift card to the Home Depot, on top of a free $40 American Express gift card to bring our paint supply and safety purchases cost down substantially (earned by going to the Timeshare presentation).

And today, a friend from my work is dropping off an old lawnmower that she longer wants, and that probably just needs a tune-up.

My point in writing this is to show everyone that expensive months happen. True, buying a home was a planned expense, and we knew that there were going to be unforeseen costs involved. But we were definitely met with more surprises than we had not thought of (both good and bad).

  1. Collect Your Resources Ahead of Time: If you are planning a big expense in the upcoming months, try to save as many gift cards, coupons associated with your type of upcoming expense (for example, Home Depot/Lowe’s coupons for buying a home/apartment, prescription drug coupons for having planned surgery/start of new school year, etc.), and favors as you possibly can so that you can combine them all and make something out of it to help save you money.
  2. Make Use of Stockpiles: Hopefully you have some stockpiles built up from previous months when you had more cash available, such as in your freezer, which you can use instead of going to the store and purchasing necessities. Remember that on top of whatever it is that is costing you extra for the month—something breaks, textbook expenses, health issues—you still have to feed yourselves, put gas in your car, and pay your bills.
  3. Always Have Backup Money: Even when purchasing a home, resist the temptation to stretch yourself so far that you are putting everything in your savings towards the down payment and closing costs. This leaves you very vulnerable, and who knows…your car may breakdown the next week.
  4. Avoid the Spending Snowball Effect: Don’t let spending money become a snowball effect. For example, while you are at the store, you see some other things that you want/need, and you throw them in the cart because, hey, you are having a bad spending month anyway, right? What’s another item at this moment? Save those kinds of purchases for when they properly fit into your budget in a few months to come.
  5. Make Up for Lost Money Next Month: You can kind of balance out your overall cash spending over a year by paring down expenditures in the month following tons of spending. Think of this as your absorption system.

Gain Perspective

But most of all, take a deep breath, and realize that this is not the norm, and that your savings will build back up with a little bit of time, effort, and patience. If this is not your month of large expenses, but someone in your family or a friend is experiencing them, please take the time to offer a cooked meal, or to help out with some of your time, or to do something which will make a big difference for them. Trust me, the kindness is much appreciated.

Beware Reward Inflation

A long time ago I figured out that I am one of those workhorses with a carrot in front of their faces or a gerbil on a wheel frantically racing towards a pinned-up piece of lettuce. You might think this sort of revelation had me second guessing myself—seeing how it makes me out to be either a conquered creature or a four-legged rodent— but it hasn’t. Once I figured out that I am motivated by rewards I began rewarding myself after each new accomplishment and the results have been great.

I think most people are motivated by rewards. It is common and smart to make little rewards for ourselves for drudging through work we don’t want to do, getting a promotion or a raise, figuring something out, etc. But I have found that my rewards have become inflated over time; no longer is a green tea frappuccino at Starbucks or a slice of cheesecake enough to satisfy the reward nut within me. I now reward myself with things like a shopping trip to the Container Store after finishing our taxes last year, or a night out at the Melting Pot, or a box of cupcakes instead of just one at my favorite cupcake boutique.

I’ve thought about this reward inflation in the last few months and came to the conclusion that big rewards are good some of the time; after all, it could be argued that I am making larger accomplishments in my adult years than I did in my younger years, and larger accomplishments deserve larger rewards. However, big rewards can get expensive, and quite honestly, I am not sure that they are more useful or even more ‘rewarding’ than small rewards. A small reward can be just as effective and good to use when you don’t have a lot of money.  You still get the psychological benefit of being rewarded for your work, but at a smaller price. Dopamine is released in the brain when we receive a reward. It doesn’t actually matter how small or big of a reward we receive, it just matters that we recognize it as a reward and get that little boost of dopamine to keep us coming back for more.

With smaller rewards you can also afford to reward yourself along the way towards achieving a larger or more long-term goal in order to maintain motivation. I am motivated by rewards that I will not receive for weeks, months, even years, but not everyone’s brains are circuited this way. Identify key mini-goals within the larger goal and each time you reach one of these, reward yourself. For example, there’s a rumor that Stephen King rewards himself with two cigarettes and a glass of Don Perignon every time he has finished one of his novels. Finishing a novel is a huge feat; if you are writing one, you could reward yourself in small ways at the end of each section, chapter, or draft. If you are working on getting out of debt, reward yourself after each creditor is paid off. If you are working on increasing your net worth to a certain number, be sure to treat yourself with a little bit of the money each time you reach a certain threshold.

To uncover some of the smaller rewards which I used to enjoy I started to think back to my childhood about the things that were unreachable to me and that I wished for. Not the large things — such as dating Tim McComsey or a car — but the everyday things that you don’t get without asking your parents because you don’t have your own source of income, a way to get to the store, or a debit/credit card to order it online. For me this included a Snickers bar, a magazine off the shelf, fried ice-cream from Chi-Chi’s, a blizzard from Dairy Queen’s, a trip to a bookstore!), etc.

What are some of the ways that you like to reward yourself?  

Word of Caution: Being Cheap Upfront Can Cost More Later

My husband and I met friends downtown for sushi.

I was running late and did not want to pay the parking garage fees, so I parked on the street corner of Texas and Bagby.

After getting out of the car, I saw a sign that said ‘No Parking’ between the hours of 7:00-9:00 a.m. and after 6:00 p.m. It was 5:20. There was a pay meter ahead, and so I inserted my credit card and was charged a $0.85 parking fee. I stuck the parking receipt in my dashboard, making certain that it was clearly visible, and went into the restaurant. One hour and about 15 sushi rolls later we came back out on the street to find that all of the cars, including ours, were gone.

We had been towed.

How much would it have cost for me to park in a garage? Probably $7-$10. But I didn't want to spend that…so instead, I got towed.

In the end, after a taxi ride to pick up our impounded car, only to find a fluorescent green City of Houston ticket on its windshield, my “smarts” ended up costing us $255. Ouch. A whole 20 minutes is what permanently separated me from that $255…well, 20 minutes and a street sign I should have taken heed to.

You've gotta be careful — sometimes when you're trying to save money upfront, but in a “cheap” way, you end up spending way more later.

To make myself feel better, let me point out a few examples from others who chose to do something to save a buck upfront, that really ended up costing much more in the long-run:

  • Take for instance in 1969 when American Machine and Foundry company (AMF) purchased Harley Davidson, and immediately slashed the workforce to save money while trying to increase overall sales volume. Tons of bikes were pushed through the factory, but the quality was very poor. Over the next ten years, the US market share for Harley Davidsons went from 80% to 20%.
  • When BP cut corners in the design, cementing, and the installation of safety devices known as “lockdown sleeves” and “centralizers” to save themselves $7-$10 million. Now, that is no small chunk of change. But up against the $1 billion BP has paid in costs so far, and the $20 billion proposed to put into an escrow account to fulfill claims, it looks like one tiny speck of iridescent residue adrift in a sea of oil globs.

Just give this one some thought. I've been caught up in it several times, and am still learning this lesson!

How to Spend Less Money on Food

I've dedicated epic blog posts for how to save money on groceries, and how to save money on food. You definitely, definitely, want to check those out.

A few pointers to get you started:

  • Cut Down on Food Waste: We Americans waste tons of food. Every week, every month, and every year. So, your next grocery shopping trip, simply cut back on the amount you normally buy — start with a 10% reduction (find out how many items you normally get by looking at the item count on the bottom of your receipt. 10% cutback on 100 items would be 10 less items you don't put into your cart).
  • Shop Every Other Week: You need to stay out of the store, and make more use of what you have on hand. My husband and I find that grocery shopping every other week has cut out food bill down by $150-$200/month. Here's a link to our 2 week meal plan on a budget, with a grocery list.
  • Replace Eating Out with Convenience Meals at Home: You can still get convenience in your life by using tools like Crockpots that can cook your food for you while you're at work, and doing a freezer meal cooking day once a month or so to stock your freezer up for healthy tv dinners. Here's my list of healthy freezer meals on a budget, with a list.

How to Save Money

Once you get your spending under control, a crazy thing happens…you start noticing a buffer in your checking account.

Suddenly, you're not juggling to make ends meet at the end of the  month, or in-between paychecks.

Your bills are being paid without any drama, and you have a surplus!

BANK the surplus. This is how you save money.

Start by setting up small automatic withdrawals from your paycheck or from your checking account once or twice a  month that go straight to your savings account.

Then, as you get better and better about not spending all your money, increase those automatic withdrawal amounts.

You'll find LOADS more information on how to save money here.

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Amanda L. Grossman is a Certified Financial Education Instructor, Plutus Foundation Grant Recipient, and founder of Frugal Confessions. Over the last 10 years, her money work helping people with how to save money and how to manage money has been featured in Kiplinger, Washington Post, U.S. News & World Report, Business Insider, LifeHacker, Woman's World, Woman's Day, ABC 13 Houston, Keybank, and more. Read more here.
10 replies
  1. Amanda L. Grossman says:

    Hello Brady!

    That is neat–I played around with studying psychology because I love to study people and I find the brain fascinating:).

  2. Brady Bryant says:

    i am a b.s. pyschology student myself and i love pyschology because we are studying the behavior of humans.`-,

  3. Amanda L. Grossman says:

    Hehehehe-Kim thanks for sharing! I guess you could sew it too….but that is WAY too far gone then:).

  4. Kim says:

    I knew I had gone too far with the poverty mind set the other day when….

    I had gone to a garage sale and bought a light blue full size flat sheet. My 21 year old son happened to be in the car with me when I couldn’t pass by the garage sale.

    I got the sheet home and washed and dried it and asked my son to help me fold it. Once we held it out to fold, I realized there was a large tear in it. I got really upset and declared that I had been ripped off. My son reminded me that I had only spent 10 cents on it and that I would probably use the good part of the sheet to make pillow cases so I could hardly say I was ripped off.

    That was going way too far with the poverty thing.

  5. CentralNC says:

    Being frugal is a financial mind game. If you are successful with your frugality and also have a productive career, you will eventually have enough resources to make you wonder if you’re going too far with your frugality. Every once in a while, I do “reality checks” – comparing current resources & goals vs. my standard of living, then making adjustments as needed.
    We’re not here forever, your frugality should be a means to an end, a time-bound end to be exact. You should have a plan & timeline for all that money that you’re saving away. Your definition of “frugal decadence” on this page says it all: life is too short to deny yourself and too long to spend it all today.

  6. Budgeting in the Fun Stuff says:

    I thought I was the only one!!!

    When I was 8 years old, I used the playground as my “little apartment” and pretended that I had to live on as little as possible. I didn’t make a budget, but I bet I could still find weekly “menus” I wrote out for myself. They consisted of off-brand Mac & Cheese, Beenie Weenies, canned tuna salad sandwiches, hot dogs, and Ramen Noodles. My mom would ask why I wanted to live on cheap food and I said “so I can live on my own even if I don’t make a lot”.

    Financial mind games got me through college with no debt (lots of boxed Mac & Cheese and Ramen). And yes, I daydream about winning the lottery too…

  7. BluSky says:

    I have plenty of financial mind games I play with myself but they all involve behaving as if I have more money than I have which leads to me running in place, financially speaking.

  8. Sandra says:

    I don’t know if it’s a mind game, but when I have a financial goal, I do adopt a “no spend” mentality. I go out of my way to make the absolute very best use of resources I already have instead of running to a store. I do relax a little bit once a goal is met.


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