I am sharing my personal tips on how to spend less money on stuff today. I have been meaning to share my system for a while, but finally got to it today. When I got married, I had some credit card debt and did not have much cash in the bank. I was literally living paycheck to paycheck and saving money was hard to do.
How To Spend Less Money
At the beginning of our marriage, my husband and I set up a budgeting system to help us meet our then future goals of buying a home. It took us a few years, but we were able to do it and continued using the system for things like vacations, college funds and retirement.
It has not always been easy. A few years back, our income decreased significantly. We not only revised our budget, but we eliminated as many expenses as we could. Setting a budget helps you track what you’re spending, achieve monetary goals, and puts you in better control of your money. Bottom line is, in order to save, you must spend less than you make. But tracking isn’t all of it, sticking to your budget allocations as often as possible is key to saving money and spending less.
Allocating Expense Money
In determining a budget, variable expenses are always easier to control. These include expenses such as groceries, household items, clothing and entertainment. By regularly allotting cash for each of these categories, you can better control your spending. I suggest keeping the cash in marked envelopes.
Many people refer to this as the envelope system, but the truth is it’s a cash system. If you don’t have the cash, you shouldn’t be spending it.
Easy enough right? Not so much. When I was younger you paid for things by cash, credit card or checks. There were no debit cards back then which in my opinion, disguise the financial impact of purchases, because you do not see the cash leave your wallet.
In any case, this cash allocation system is the system we still use today. I’m including some free printable labels that you can use to set up a similar system for your household to better control your spending.
Envelope Cash System Labels
- Determine your flexible spending categories.
- Set a monthly budget for each. The monthly amount for all envelopes should be determined after you have set aside a monthly savings amount. It is very difficult to save without deducting that amount first.
- At the beginning of the month, place budgeted amount in envelope.
- When envelope is empty, resist the temptation to borrow from another envelope.
- I find it cumbersome to save receipts however if you feel it would help you in the beginning you can put your receipts in the respective envelopes to review later.
- All you need to get started is some envelopes and sticker paper or paper and double-sided tape.
- Right click on the link below to print the labels.
Disclaimer: This article is intended to share what has worked for our household for years. I am not a financial professional. If you feel you need financial advice, please consult a certified professional.
Are you hoping to spend less money this year?