Save by Being Selective

twerkPlease enjoy this post from staff writer, Mitchell Pauly.  Mitchell writes his own blog over at

In the personal finance blogosphere, there is more saving advice than twerking in a Miley Cyrus video.  However, please allow me to simplify things for you while throwing yet more advice out there.  The usual approach to savings is undisciplined and cruel in the sense that ruthlessly cutting spending in all areas will render you as miserable as Billy Ray Cyrus watching his daughter twerk on national television.   The point of saving is not simply to save money, but to be happier through increased security or an increase in available cash to spend in areas of our lives that make us happy.  So while temporary spending freezes may help boost your annual savings rate, they will also boost your chances of losing your mind.  Instead, try to save by being selective.

Save by Being Selective

Saving be being selective involves breaking your spending habits out into specific categories and choosing two or three categories to ruthlessly cut spending on.  I mean go scorched-earth on them; make them feel like a small village in the way of Sherman’s March.   Choose areas where there is the best combination of easy-win and meaningful savings to be had, and areas that are unlike each other (as much as possible)[1].   The reason behind choosing two or three areas is as simple as a Cyrus: if you fall off in one area, you can continue to make progress in the others.  Any more than three areas however, and this becomes an exercise in across the board cutting.  Choose your areas, be ruthless, set your goals and continue to spend normally everywhere else.

How to Save by Being Selective

Implementing this approach is as easy as writing a Miley Cyrus joke[2].

  1. Break your current spending out into broad categories, and then break the broad categories into smaller, more targeted categories.  This is the first step in identifying specific areas of your spending habits to cut.  After your targeted categories are created, take the time to organize them into unlike groups.
  2. Figure out how much you spend in these categories on an annual basis.  Estimates are okay, but should be based on several months of history.  I would sift through three months of spending history to establish a baseline, and then multiply by four.  This will account for temporary lows and highs to create an average.
  3. Choose a savings goal.  In establishing your goal, it is important to ensure that it will be attainable.  For example, I spend a ridiculous amount of money on snowboarding.  Cutting 100% or even 80% of that budget will make me miserable, and lower the chances of me succeeding more than an outlandish VMA performance featuring my flat ass.  It would be better to cut 25-30%, which would yield meaningful savings while still allowing me to participate.  Very important distinction: the goal of saving by being selective is not to meet a specific annual savings number, but to cut spending to an average annual level.  For example, if you spend $1,000 on eating out annually and wish to cut that by 20%, your goal is to reach a spending level that supports $800 in eating out related expenses annually, not to spend $800 in an arbitrary timeframe.  The goal is to change your habits permanently.
  4. Ease into your ultimate savings goal.  If your goal is to cut 30% of your restaurant spending, set a three month timeline to ease you into your desired savings rate.  For example, if you spend $1,200 annually on golf, at a desired savings rate of 25% your new annual goal is $900.
  5. Track your savings.  Since you know your average annual spending (and thus monthly spending), you should be able to track your progress easily.  You can do this through a month-end review, setting up a account, or simply writing down all spending in the areas you set goals within.

From start to finish, these steps should take less than twenty minutes, about the same amount of time it takes a parent of a Hanna Montana fan to realize something is horribly wrong with the new Miley Cyrus album.  This strategy is less intrusive on your life than an “across the board” savings approach, and because of its reduced psychological impact is more likely to yield permanent changes in spending habits.

What will you do with all the money you save?

[1] For example, choosing to cut the times you eat out and the amount you spend at the bars may be an easy win and yield meaningful savings, but if a friend visits from out of town or a birthday pops up it will be tough to cheat on one area while staying on track with the other.  This is because eating out and spending at bars is too much alike.  A better, unlike combination may be eating out and playing golf.

[2] That is what we in the business call a “meta-joke”.

Do you think that saving by being selective is a good way to reach your savings goals?  If so, what would you cut?

About Mitchell Pauly

Mitchell Pauly is the main writer at Snarkfinance and a staff writer for Club Thrifty. He is a successful professional investor and financial analyst for Fortune 500 companies and enjoys nothing more than a cringe worthy joke. You can follow him on Twitter @snarkfinance.


  1. Never did I think that I’d wake up on a Monday morning and find that so many Miley Cyrus metaphors would help me to save more money. Thanks Miley …

  2. I like the big win savings over tons of small ones for sure. Much less effort for much more reward.

  3. You make an excellent point that across-the-board spending cuts will cause you to feel pretty deprived pretty fast. I agree that it’s better to focus on the certain areas where you want to cut- you can always go back and re-evaluate the other categories later once you master the art of living on less in your initial chosen categories :-)

  4. We did that this year in two areas, Mitchell. We cut grocery costs and entertainment costs by a certain percentage, and so far it’s worked out well and not made us feel deprived, largely because we still have some flexibility there, as you mentioned. Great post!

  5. I like this approach. We all have categories in our budget where we are probably overspending big time. Best to look at those first.

  6. Great tip. It’s much easier to be focused on specific categories versus just generally trying to “cut expenses.”

  7. I like the idea of first looking at the broad categories and then breaking them down further. Many times our overspending is within those smaller sub-categories than the broad category itself.

  8. We do this method of saving. For instance, we cut back on fast food and restaurant eating recently so we could save up more for our honeymoon. We also don’t have a home phone, cable, and only one of us has a smart phone so we can afford to eat well.

  9. I definitely go by categories to see what I can cut. That makes it easier on me and more pronounced savings.

  10. I think cutting everything is like starving yourself to lose weight. It just won’t work and you’ll cave and probably binge eat/spend. Groceries and my “life expenses” category have always been my two trouble points. But even in those areas I move slowly to see what I can cut. Nothing outlandish.

  11. Hi Mitchell andthanks for a very insightful post :)

    I am on a mission to save money this 2014 and your advice is spot on!

    I have become more selective in some areas and downright thrifty in others. It’s like going on a diet, if all of a sudden you cut out everything that you enjoyed, it wouldn’t be long until your diet crashed and burned. The same with spending and saving…or twerking :)

    Take care Mitchell and all the best.


  12. Agreed! I think spending freezes are dumber than Miley Cyrus twerking. It’s no better than a yo-yo diet and doesn’t address the root problem.

  13. 1) Have you seen the meme going around the internet with Bill Ray Cyrus’ face and the comment ”I should have pulled out…” hahaha, so much yes.

    2) Great post. Too many people are unrealistic when it comes to making cuts within the budget like ”oh I won’t eat out anymore therefore I won’t budget that $$ anymore” when in fact you will eat out every single week at least once causing the budget to fail and blaming the unrealistic budget you created and giving up entirely.

  14. I dunno, temporary spending freezes never seem to cause mind loss in Casa Grumpy. The key is that they’re temporary. Gazelle intense isn’t so bad if you know it’s not going to last forever. And with spending it works so much better than dieting because your savings account isn’t fighting against you to put on extra calories like your body is. And they’re a nice way to realize all the little areas you were spending money on without noticing, like the unnecessary side purchases made at Target. When the freeze is over it’s easier to appreciate what you do spend money on.

  15. Sadly, I think Billy Ray Cyrus enjoys seeing his daughter tweak all over TV. I wish he didn’t, then maybe we could turn on the TV and not have to watch her. :) I do agree that when people decide to get rid of debt, which I like, they sometimes go a little overboard in their excitement. They end up feeling deprived and miserable, so they quit. I always suggest starting with the low-hanging fruit. The money you’re spending on things you don’t even use or won’t miss and go from there.

    • Yeah Shannon! Good point. For us, the low hanging fruit was our ridiculous food spending. It was easy to save a lot by just eating out less.

    • I’ve been frugal since day #1. That said, I don’t know (or maybe you don’t know) what you are insinuating about Billy Ray liking to watch Miley twerk… just sit on that one for a second.

  16. Whenever I see Miley Cyrus’ butt moving, I will now remember to save. Thanks, Mitchell! Great approach, and I especially like the idea of breaking your spending into smaller categories. I’ve tried going broad and going specific, and specific is better, at least for me. It gives you a more realistic idea of what you’re spending money on and where you’re spending it.

  17. I’m really big into making sure their is high value for my dollars spent. It’s the same reason I drive the same car I had in college. I hate cars, but some times for me they are a necessity.

    Taxable investments is where all my saved moolah is going this year. And probably a bit into my house [the wife wants and new master bath].

  18. I love Miley even she does the twerk thingy! :) I have my goals and one of those is to watch over my electricity bills because last year I had noticed that my electricity bill gets higher and higher every month!

  19. Love this approach! I think being too general causes a lot of overwhelm and causes people to fail to reach their goals. Being more selective makes it easier to focus and focus makes things happen.

  20. I’m definitely selective when it comes to saving and cutting back. At the start of each year I look at certain areas of my budget I want to cut back in. You definitely don’t want to take a wrecking ball (sorry, couldn’t help it!) to your spending across the board, or else you’ll never stick to it.

  21. We are already pretty frugal, so there isn’t a whole lot to save. We did do something similar to selective saving last year when we reduced our U-verse bill by 66%. We dropped the TV down to basic service, and removed the land-line phone service. We didn’t change the Internet service. We went from nearly $190/mo, which was ridiculous, to $60/mo.

  22. I think that setting goals is a great tool for making progress in any area, and this is absolutely try of finances.. If you set a solid goal for where you need to get your savings, then you will work harder to get there.

    We are trying to do that with our retirement in 2014.

  23. I truly believe in order to achieve financial success we need a true understanding of the lifestyle we want to live. When we incorporate the life we want to live it’s much easier to choose or limit expenses that gets us closer to that lifestyle.

    Financial goals of paying off debt or saving money are important but when we leave out the big picture we tend to stray away from achieving those financial goals.

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