Is Your Spending Out of Control? Here’s How to Budget and Save Smarter

Have you ever looked at your bank account and wondered, “Where did all my money go?” If your spending feels out of control, you’re not alone. Many people struggle to strike a balance between enjoying life and staying on top of their finances. The good news? You can regain control with practical steps to budget and save smarter.

Step 1: Identify Where Your Money is Going

Before you can fix your spending, you need to understand it. Spend some time reviewing your bank and credit card statements from the past three months. Categorize your expenses into needs (housing, utilities, groceries) and wants (eating out, entertainment, subscriptions). Seeing the numbers in black and white can be an eye-opener.

Step 2: Create a Realistic Budget

Budgeting doesn’t mean depriving yourself; it’s about allocating your resources wisely. Follow the 50/30/20 rule as a starting point:

• 50% for needs

• 30% for wants

• 20% for savings and debt repayment

Use a budgeting app or a simple spreadsheet to track your progress. Adjust the percentages as needed to fit your unique situation.

Step 3: Set Financial Goals

What are you saving for? Whether it’s a dream vacation, paying off debt, or building an emergency fund, having clear goals makes it easier to stick to your budget. Write down your goals and assign a timeline to each one. For example, “Save $1,000 for an emergency fund within three months.”

Step 4: Automate Your Savings

Out of sight, out of mind. Automating your savings ensures you’re consistently putting money toward your goals. Set up automatic transfers to a separate savings account each payday. Start small if needed—even $20 per paycheck adds up over time.

Step 5: Cut Back Without Feeling Deprived

Look for ways to reduce spending on wants without sacrificing happiness. For instance:

• Cook at home: Swap one restaurant meal per week for a homemade dinner.

• Share subscriptions: Split streaming services with family or friends.

• Shop smarter: Use coupons, cashback apps, or shop during sales.

Step 6: Plan for Fun

Budgeting doesn’t have to mean giving up fun. Include a “fun fund” in your budget for guilt-free spending. Knowing you have money set aside for enjoyment can prevent impulse purchases and overspending.

Final Thoughts

Taking control of your spending doesn’t happen overnight, but with intentional steps, you can turn things around. Remember: Every small step you take today brings you closer to the financial freedom you deserve.

If you’re ready to dive deeper into budgeting and saving strategies, check out our resources and tools at I Was Broke. Now I’m Not. Let’s get started on your journey to smarter spending and saving!

Wants vs. Needs: How to Balance Spending and Saving Without Feeling Deprived

Balancing spending and saving can feel like walking a tightrope. Too much focus on saving, and you might feel like you’re missing out on life. Too much spending, and your financial goals may slip further and further away. The key to harmony lies in understanding the difference between wants and needs and crafting a strategy that allows for both. Let’s explore how to strike this balance without feeling deprived.

Defining Wants vs. Needs

At its core, a “need” is something essential for survival and basic well-being. These include housing, food, transportation, utilities, and medical care. “Wants,” on the other hand, are non-essential items or experiences that enhance enjoyment or convenience—think dining out, vacations, entertainment, and that latest gadget.

While this distinction seems straightforward, the lines often blur. For example, while food is a need, ordering takeout or dining at a fancy restaurant falls under a want. Recognizing these nuances is the first step to creating a balanced financial plan.

1. Audit Your Spending

Start by tracking your expenses for a month. Categorize each expense as a want or a need. Be honest with yourself! This exercise helps you see where your money is going and identify areas where you may be overspending on wants.

2. Prioritize Your Needs

Once you’ve identified your needs, ensure they’re adequately covered in your budget. This means setting aside money for rent, utilities, groceries, and other essentials before allocating funds elsewhere. Use tools like the 50/30/20 rule, which suggests:

• 50% of your income for needs

• 30% for wants

• 20% for savings and debt repayment

3. Budget for Guilt-Free Spending

Deprivation leads to burnout. To avoid this, create a budget that includes room for discretionary spending. Knowing you have money set aside for fun allows you to enjoy your wants without guilt or derailing your savings goals.

4. Automate Savings

Set up automatic transfers to your savings or investment accounts. Treat your savings as a non-negotiable “need” to ensure you’re consistently working toward your financial goals. Automating this process removes the temptation to spend money earmarked for savings.

5. Celebrate Small Wins

Acknowledging progress is crucial for staying motivated. Celebrate milestones like paying off debt, reaching a savings goal, or sticking to your budget for a month. Rewarding yourself (within reason) reinforces positive habits and makes the journey more enjoyable.

Conclusion

Balancing wants and needs is not about strict denial or indulgent spending; it’s about creating a plan that honors your goals and values. By auditing your expenses, prioritizing needs, budgeting for wants, and automating savings, you can enjoy a fulfilling life today while securing your financial future. Remember, it’s not about perfection but progress—so give yourself grace as you navigate this journey toward financial well-being.

Are You Spending Wisely? 7 Tips to Make Every Dollar Count

Do you ever feel like your money disappears faster than you can earn it? You're not alone. With the rising cost of living and endless temptations to spend, managing finances can feel overwhelming. The good news is that wise spending isn’t about earning more—it’s about using what you have more effectively. Here are seven actionable tips to help you make every dollar count.

1. Track Your Spending

You can’t manage what you don’t measure. Start by documenting every dollar you spend for at least a month. Use a budgeting app, a spreadsheet, or even a notebook. Once you know where your money goes, you’ll see areas where you can cut back or redirect funds to more meaningful expenses.

Pro Tip: Categorize your expenses into needs, wants, and savings to identify potential problem areas.

2. Create a Budget That Aligns With Your Goals

A budget isn’t about restriction; it’s about intention. When you create a budget, you’re giving your money a purpose. Align your spending with your short-term and long-term goals—whether that’s saving for a house, paying off debt, or enjoying a guilt-free vacation.

Action Step: Use the 50/30/20 rule: allocate 50% of your income to needs, 30% to wants, and 20% to savings or debt repayment.

3. Distinguish Between Needs and Wants

Impulse purchases often stem from confusing needs with wants. Before buying something, ask yourself: “Do I really need this, or do I just want it?” Waiting 24 hours before making a purchase can help you avoid buyer’s remorse.

Mindset Shift: Needs sustain your life; wants enhance it. Spend accordingly.

4. Plan Your Meals

Dining out or ordering takeout frequently can eat into your budget faster than you realize. By planning your meals and preparing them at home, you’ll save money and likely make healthier choices.

Pro Tip: Batch cook meals for the week to save time and reduce the temptation to order out.

5. Shop Smart

Be a savvy shopper by comparing prices, using coupons, and waiting for sales. Avoid shopping when you’re emotional or rushed, as this can lead to unnecessary purchases.

Action Step: Make a shopping list and stick to it. This ensures you only buy what you need.

6. Cut Subscriptions You Don’t Use

Subscription services can quietly drain your budget. Take a close look at your monthly subscriptions—streaming platforms, gym memberships, or apps—and cancel the ones you rarely use.

Quick Win: Use an app that tracks subscriptions to identify and manage recurring charges.

7. Automate Your Savings

One of the best ways to make your dollars work harder is to save consistently. Automating your savings ensures you’re setting money aside before you have the chance to spend it.

Action Step: Set up an automatic transfer from your checking account to your savings account every payday, even if it’s just $20.

Final Thoughts

Spending wisely doesn’t mean depriving yourself of the things you love. Instead, it’s about being intentional and prioritizing what truly matters. By implementing these seven tips, you’ll not only stretch your dollars further but also gain greater control and peace of mind over your finances.

Start small. Pick one or two tips to focus on this week, and watch how quickly your financial confidence grows.

5 Ways to Reset Your Finances After the Holidays

The holidays often bring joy and connection, but they can also leave us with financial stress. Now that the celebrations are over, it’s time to take control of your finances and start fresh. These five steps will help you reset your finances and set yourself up for success in the year ahead.

1. Review Your Holiday Spending Habits

Let’s get real—where did your money go during the holidays? Sit down and go through your transactions. Break them into categories like gifts, entertainment, travel, and all those extra Starbucks runs (it’s okay, we’ve all been there). Figuring out where you overspent can help you spot patterns and make smarter choices next year. 

Tip: Pick one thing to tweak for next year, like swapping a full-blown gift exchange for a Secret Santa or hosting a potluck instead of footing the whole holiday meal bill yourself.

2. Reevaluate Your Budget for the New Year

New year, new budget! Take a look at your current financial situation. Do you have holiday bills to tackle? Maybe some income or expense changes? Adjust your budget accordingly to reflect where you’re at now.  Starting the year with a fresh, realistic plan gives you a solid foundation for tackling those money goals. 

Tip: Add a “holiday recovery” line to your budget to keep tabs on paying off any lingering holiday debt. It’s like a progress bar for your wallet!

3. Prioritize High-Impact Financial Goals

Trying to do everything at once can feel overwhelming. Instead, pick one or two financial goals to prioritize this year. Maybe it’s building up your emergency fund, paying down credit card debt, or finally saving for that dream vacation.  Zeroing in on a couple of goals helps you stay focused and actually make progress. 

Tip: Keep your goals visible! Use a savings tracker, a countdown, or even sticky notes on your fridge to remind yourself why you’re doing this.

4. Declutter and Sell Unused Items

Ready to feel productive and bring in a little extra dough? Declutter your home and sell those items you never use. That barely-worn sweater? Those gadgets collecting dust? They could be someone else’s treasure—and your financial boost.  You’ll clear out your space and earn some quick cash to put toward debt or savings.

Tip: Promise yourself you’ll only use the money for your financial goals, not on impulse buys (no matter how tempting that coffee run seems).

5. Automate Good Financial Habits

Want to make this whole money thing less stressful? Automate it! Set up automatic transfers to savings accounts, schedule bill payments, and if possible, set recurring payments to chip away at debt.  Automation means you’re taking action without even thinking about it. Plus, it helps you avoid those pesky late fees!

Tip: Start a holiday savings account now and set up small, automatic monthly contributions. You’ll be amazed at how prepared you’ll feel when December rolls around again.

Wrapping It All Up

Getting back on track financially doesn’t have to be complicated. Review your holiday spending, refresh your budget, focus on a couple of big goals, declutter for extra cash, and automate the good habits. These steps are simple, effective, and totally doable—because you’ve got this!

Here’s to a fresh financial start this year! 🎉

How To Create Accountability As A 'Spender'

Raise your hand if you’re a self-proclaimed ‘spender?’ 

A recent poll conducted by the New York Post revealed that 56% of Americans identify themselves as "spenders," indulging in purchases they truly desire. 

While treating oneself occasionally is perfectly acceptable, establishing accountability for spenders is crucial to maintaining financial well-being and stability. 

3 Strategies To Establish Financial Accountability 

1. Create A Realistic Budget:  One of the most effective ways to establish accountability for spenders is through budgeting and the tracking of expenses. Create a monthly budget that outlines all of your expenses and allocates a specific amount of spending money.

2. Set Clear Financial Goals:  This can be a powerful motivator for responsible spending. Start by defining your short-term and long-term objectives, such as paying off debt, saving for a vacation, or contributing a certain dollar amount towards retirement. Having tangible goals creates a sense of purpose and can help you think twice before making impulsive purchases. 

3. Find A Trusted Accountability Partner:  Pairing up with a trusted friend, spouse, or financial advisor creates a support system to hold each other accountable for your spending decisions. Regular check-ins, discussions about financial goals, and shared progress can significantly impact and reinforce responsible spending habits.

Remember, being a spender doesn't have to conflict with being financially responsible; it's all about finding the right balance.

How Do I Start Saving?

Are you tired of the never-ending struggle to save money? Do you find yourself caught in a cycle of starting to save, losing track, and then starting over again?

It's time to take a step back and evaluate your foundation. Is it the RIGHT foundation to help you achieve your financial plans, hopes, and dreams?

• Have you set your financial goals? (What are you working towards…)

• Do you have an emergency fund built for when life happens? (Are you protecting yourself with the right insurance: health, home, car, disability, etc)

• Prepare for known, upcoming expenses. (Like birthdays, insurance premiums, property taxes, etc. These should not bust your budget!)

After reviewing your foundation, start prioritizing your savings. Treat saving money with the same level of importance as paying bills. Consider it a debt owed to yourself. Recognize that saving money is a choice and prioritize it over non-essential expenses.

A few tips:

• Separate Your Savings: To prevent accidental spending, move your savings to a separate bank account. This separation creates a mental barrier and makes it less tempting to dip into your savings for impulsive purchases.

• Use Cash Envelopes for Specific Expenses: For impulsive cash areas like groceries, dining out, entertainment, and clothing, use cash envelopes. Allocate a fixed amount for each category and stick to it!

• Reevaluate Subscriptions and Daily Habits: Identify and cut out unnecessary membership subscriptions or daily habits that drain your finances. Do you need every single streaming platform? Probably not.

• Seek Better Insurance Deals: Consider changing insurance providers for home and auto to potentially find better deals.

Remember, it's never too late to start saving – the key is to take that first step and stay consistent on your financial journey!

5 Questions To Ask Before Spending Money

Do you ever get caught in the cycle of  “see it, want it, and buy it?” Before you spend you haven’t stopped to think through what you’re buying.  Now you not only have a new purchase that’s all yours, but you also have a high monthly payment to go with it.

Let’s overcome that spending habit with these 5 practical questions to ask yourself before spending a substantial amount of money.   Practical questions that will help you truly understand the enormity of the decision, and help you make the decision that is best for you and your family.

Question 1: “Do I Need This?”

Pausing to ask, “Do I need this?”, can prevent a lot of poor spending decisions.   I’m not saying that I never purchase things that are pure “wants” – I am saying that when I ask the key question, I make much smarter overall decisions.

This question becomes a “gatekeeper” of sorts.  Something to help prevent impulsive spending.

BONUS: Wait overnight before answering the question!   It is amazing the clarity that a good night of sleep will bring to a spending decision!

Question 2: “Will This Item INCREASE Or DECREASE In Value?”

Chewing gum goes down in value.   So do cars, 4-wheelers, refrigerators, swimming pools, and clothes.

Businesses can go up in value.   So can houses, land, antiques, mutual funds, company stocks, bonds, and intellectual property (patents, licenses, etc).

Here is what I KNOW: Not all of your purchases can be for items that increase in value, but if ALL of your purchases go down in value – something ain’t right!

BONUS: Find someone you know who is prospering with their investments.   Invite them to lunch (pay for his/her lunch) and ask them to mentor you!   They will probably LOVE IT!

Question 3: “Do I Have The Money To Pay CASH For This Item?”

I know that the day I started asking this question was THE DAY that my family started winning with money.

If I do not have the cash to pay for it, I’m not buying it UNLESS it is a house or an asset that will increase in value (like a business, rental house, etc).   Even then, the answer is still usually “NO!” unless I have all of the money available to pay cash.

Question 4: “Will This Purchase Generate Income For Me Or Take Income Away?”

What an incredible question to ask – and what a difference it will make in the way you think about money!   I used to earn money and then immediately begin pondering which fun item I was going to buy.  I rarely (if ever) thought about the fact that I could use the money to buy in to a small business, purchase stocks and mutual funds, start a small business, or purchase a rental home.

Even more, I did not truly realize the ACTUAL cost of many of the items I had purchased.   I had purchased a new car (my smokin’ hot Chevy Cavalier) and I only thought of the bank loan as my “cost” to purchase.   In actuality, I also added the costs of insurance, property taxes, license tags, maintenance, repairs, and additional gasoline consumption. Not to mention the lost potential to make money with what I was currently sinking into all the bills associated with that car.

Before you spend, just stop and ponder the options available to you to use those resources to generate more income for you in the future.

BONUS: Review your budget to see how much your current possessions are costing you on an ongoing basis.  There are many purchases that are “gifts that keep on giving.”  By looking at things you’ve already purchased, or subscriptions you already have, you can find ways to lower your expenses.

Question 5: “Will This Help Me Achieve My Future Plans, Hopes, And Dreams?”

Without a longer-term perspective, it becomes extremely easy to fall into the trap of living for the minute, and immediately spending every single dime we earn.   As one develops a longer-term perspective, it really helps us recognize that spending all of our money right away will rip our future dreams away from us!

When my family first got started on improving our financial future (Dec 2002), I noticed that we started looking a few months ahead.   Now, eighteen years later, my entire perspective has shifted.   You see, I want to leave a legacy for my children and community.   I want to leave a huge inheritance to my family, church, and others.   My wife and I want to give our children a paid-for college education.   We want to give them a paid-for house when they graduate.   We desire to teach them to manage their finances recognizing that it is not just FOR THEM, it is FOR THEM TO HELP OTHERS!

So Before You Spend…

THINK!  Think about what this big purchase means.  Not just the temporary gratification, but how it will impact you in the long run.

My hope is that by slowing down and asking yourself these questions you will be able to gauge how important a large purchase is to you, and how it will benefit you.