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How Spending with Purpose Has Saved Us Over $100,000

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I don’t know about you, but I’m not one to give a bunch of unsolicited advice. Double that when it comes to money.

Since we make a living writing a financial blog, I’m sure that sounds weird…but it’s true. On the blog, it’s cool. You’re here to read what I have to say, so it’s an understood relationship. In real life, it’s not quite the same. I’m always available to help, but I’d rather not muddy the waters of friendship unless I’m asked.

Most of my friends have a pretty good idea of what we do, and they’ve seen how often we travel. Naturally, that leads to lots of questions about credit card rewards or travel tips, which is awesome! We love helping everybody find ways to afford their bucket list travel dreams. But a few weeks ago, I found myself in a different situation. While we get emails asking about budgeting and money all the time, a good friend actually sought me out and asked me to take a look at their finances. 

How Much Are You Spending?

Frankly, I was honored (and humbled) that he sought me out for advice. This gave me the chance to really help somebody who I cared about, and I was excited to get started. I started by asking him if they knew how much they were spending, if they were on a budget, and what it looked like. Before I even asked the question, I already knew the answer.

See, like so many others, my friend and his wife are struggling to save. They are making plenty of money, but – at the end of the day – they have nothing to show for it. And, they’re not alone. It’s a middle class affliction that probably affects the majority of the people both you and I know. Heck, that was even us once!

People may look like they are doing well, but looks are often deceiving.

Learning to Spend with Purpose

Back in the day, we blew through money like it was contaminated with the Zika Virus. The problem wasn’t that we were short on income. We were unable to save because we were spending without purpose. There’s nothing wrong with spending money, but when you spend without purpose, all the little things add up and become crippling.

Spending without purpose means you might blow through hundreds of dollars each month without realizing what you’re doing or seeing anything for it. $5 for gum here, $6 for drinks there, $12 for lunch…it piles up quickly. And all you get is a gut ache and a pocket full of receipts.

Over time, we learned to save on things we don’t really want so we can spend on the things that really matter to us. You know, trips to Europe, concerts in Denver, and taking the kids to their favorite events. I’d estimate that spending with purpose has saved us more than $100,000 over the last six years – money we’ve been able to use to realize our dreams. But, it didn’t just happen. We needed to make a change in the way we thought about money, and a few basic tools helped us do just that.

Tracking Our Expenses

To start spending with purpose, we realized we first needed to know where our money was going. So, we started tracking our expenses.

What we found shocked us and opened our eyes in a freakin’ hurry. We were frittering away over $1,000 a month on food…for just 2 adults. And, a lot of that was for the simple convenience of eating out. We also found hundreds of dollars a month that was just going missing, spent on small purchases that didn’t cost more than a couple bucks. By tracking our expenses, it became ridonkulously clear that we were wasting money on things that didn’t matter at the expense of the things that did.

Hot Tip: This Tool Has Helped Us Track Our Spending and Save Over $100,000!

Creating a Zero-Sum Budget

Once we knew where our money was going, we had to make some choices. We decided what was important to us, and we wrote it down. We created a budget.

When people hear the word “budget,” they instantly recoil and think that it is so restrictive. Frankly, they just don’t understand what a budget could mean for them. For us, it actually means more freedom. Tracking our expenses, deciding what is important to us, and budgeting for it has helped us to craft the exact life we want to live. Instead of being restrictive, it is the tool that allows us to do everything we ever dreamed of.

Related: How to Budget Using Last Month’s Income

Planning Ahead

Look, being impulsive can be a whole heck of a lot of fun. But, when it comes to money, it can really destroy your earning power. Impulsiveness is the enemy of consciousness.

Planning ahead can have a huge impact on creating conscious spending habits. It forces you to think, “Do I really want this?” If you do, and you write it into your budget, there’s no reason you shouldn’t be able to afford it. The problems come when you start blowing money left and right without ever considering the consequences.

Deciding What Was Important to Us

In addition to showing us how we were wasting money, tracking our spending helped us to make some serious decisions about what was important to us. Once we dug into our spending habits, it got addictive. We began to question everything that cost us money. Is this important? Can we save by switching to something else or getting a better deal? Is this a need or a want, and where else could we use this money?

We work hard for our money. We pour our life force into our jobs every day to earn it. Why waste that money? Why waste your our lives on things we don’t even care about? That’s just silly.

Spending with Purpose Changed Our Lives

By using these tools and learning how to spend with purpose, our life has changed in almost immeasurable ways. It taught us that the amount of money we made didn’t matter. All we had to do was harness the power of our paycheck and we could get further ahead than we ever dreamed.

I believe that any average earner has the ability to craft the life they desire. They just have to learn how to spend with purpose.

What do you think? Has spending with purpose changed your life? Do you think anybody can do it? Let us know in the comments below!

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24 Comments

  1. Tracking expenses is a difference maker for sure. It really opened my eyes to what my lifestyle costs. And it also makes it easy to identify and target certain categories of expenses. Great tips, thanks. Hope your friend gets on track!

    1. It is a huge difference maker! Tracking our spending helped us slash hundreds (if not thousands) a month, and set us on the path to success.

  2. I think sometimes it’s difficult to equate exactly how much you’ve “saved” over time. Sometimes saving is simply not spending, and sometimes (more often for some than others) you do this without thinking. Perhaps I should be talking in the first person haha but I think this applies to everyone. My wife and I are very intentional about spending money only on things that matter to us, and it’s helped us to pay off debt and save more than we otherwise would have been able to.

    1. Yeah, it’s definitely hard to put a number on. Regardless, being very intentional with money is one of the biggest keys to getting ahead…at least IMO.

  3. Dividends Down Under says:

    Hey Greg, I completely agree!

    Anyone can put their finances back on track and take charge of their money & future. Having a budget hugely helped us, particularly my wife, see that we COULD make it own our own when we were first moving out. It was hugely invigorating and freeing. Obviously the sooner the people do it, the more time they have to allow compounding to work.

    We know what’s important, we know what we want. (Which is to get a baby through IVF at the moment). After that, we want to be FI as soon as we can, so that we can spend as much time together as we can. You can’t get your time back, you can always make more money.

    Tristan

    1. That is so true! Time is such an important and valuable thing, and we often forget that it is slipping away.

  4. We had to start really spending with a purpose when we started living on one income several years ago. If we wanted to have a stay at home parent, there was no choice. I know those little things don’t seem like much – spending $2 here or $5 there seems insignificant at the time, but being conscious about spending on all things, big and little, really does add up and can make a huge difference to the bottom line!

    1. Even more, it builds a mindset, an attitude of frugality. Once you start spending with purpose and see the savings start to pile up, it becomes a lifestyle, helping you to save even more!

  5. Spending with purpose is probably the most important thing when it comes to personal finance. Money management balances on behavioral traits. You can get on a budget, cut expenses, make more money, and so forth, but spending with purpose is the key thing. It’s what has really helped me reach some of my goals!

    1. It’s definitely a big mindset shift that can save you tons of money. Far too many people spend thousands every month without ever questioning why. It’s a hard habit to break, but one that can really help you get ahead.

  6. Tracking is probably the toughest thing but if you are creating categories for items instead of just a miscellaneous category then it makes it a bit easier. I believe anyone can put purpose behind their spending and with articles like this you can definitely learn how. Thanks for sharing!

    1. Thanks for the kind words Lorin! I agree, it is definitely something that people can learn how to do.

  7. We have always been spenders with a purpose and that’s definitely how we have reached FI. I think people know that about us but are surprised that we were able to retire early. They just can’t seem to make the connection between the two. We also don’t offer up much about our financial journey. If someone asks for help, we’ll share – but most people think it is normal to have very “unpurposeful” spending habits.

    1. That’s so true…which is also why “most” people don’t have $500 to use for an emergency.

  8. budget, tracking expenses, side hustle and purpose helped me to became debt free and also if I am still on a budget and I’ll have a hate/love relation with it forever …but I became more conscious about my spending habits… Thanks for your list because it is helpful for budget beginner but not only!

  9. Spending with purpose is so important to feeling like your choices and days share your values. Great piece!

  10. Saving on purpose would be really great as you have reasons to carry on and to do better in savings. And, I think it’s fun to do it for that purpose because you are directed and guided.

  11. Most things don\’t matter, so why spend on them? Great points in this post!

    1. So true. It’s very easy to waste money on things that feel good in the moment, but every dollar you spend takes away money from other goals. It’s not that you shouldn’t spend at all. You just need to be conscious of it.

  12. Great post, and I’m so glad your friend asked for help! I believe why we want to save money is as important as how to do it. Why will provide the motivation when it gets tough and requires sacrifice.

    1. Oh, I totally agree with that. The stronger your “why,” the easier it becomes to save!

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