This week on the Bullpen, we sat down with the hosts of the Frugal Friends podcast, Jen Smith & Jill Sirianni who gave some great tips on how to evaluate your expenses and live the life you love with values-based spending. Here are 10 practical money-saving tips to help you take a closer look at your spending habits and eliminate unnecessary spending!
10 Money-Saving Tips:
- Record Expenses in a Money Diary
- Identify Spending Patterns
- Adjust Budget to Spend towards Top Values
- Re-think Fixed Costs
- Cancel Automatic subscriptions
- Plan for the Grocery Store
- Plan for the Meals you will have that week
- Use the 24-hour rule to avoid Impulse Spending
- Take advantage of Free Community Events
- Surround yourself with a likeminded community
- Make a Money Diary
It can be easy to feel that your expenses are getting out of hand, and wonder, where does all my money go at the end of the month? To better understand your money habits, take some time to look at your expenses over the last 60 days and record both your emotional state at the time that you made the purchase, and the context for why you made it. This activity will take some time and thought, this reflection time will be an amazing way to understand your spending habits and where your money is going. Jill recommends asking yourself these questions: “What was the context in which I spent that money? And then another column to be able to document and kind of journal, what was I feeling? What was my emotional state? How would I describe what was going on for me mentally, emotionally, maybe even relationally when I made that spending decision?” She explains, “I’m going to include bills in that as well because how we feel about our bills is also going to play an important role in the way that we view our finances. This is an exercise that is going to begin to get us thinking about and creating some of those neural pathways of connecting our financial decisions with these other aspects of our personhood, which will inevitably bring us insights on our patterns and themes that are popping up, which can inform then how we want to move forward.”
Money Tip: To do this most efficiently, go onto the MyMentoro platform and ensure that all of your accounts are linked to access your spending history across your various accounts. The spending wheel can show you in percentage format where your money is going, but to keep your money diary, take a note in the “memo” section about how you were feeling and the context in which you spent it. You can also update the categories to ensure the most accurate depiction of your spending habits.
- Identify triggers and patterns in your money habits
Based on the reflection activity in the previous step, make note of common patterns in your spending as well as potential triggers for these expenses. You may notice that you mindlessly repeat certain tasks throughout the day at certain times of day. If these patterns involve financial habits you want to break, it becomes important to recognize what is driving the habit. Are you often stopping for fast food on the way home to deal with a stressful day at work? Are you stopping to get a coffee at the interior Starbucks every time you shop at Target, but go more out of ritual than the need for caffeine? As Jen pointed out, “We like to think of looking through this transaction list and figuring out what your cues or your triggers are for the expenses because a lot of these expenses are habitual. So figuring out what the cue or trigger is for each of them is going to be really important in later figuring out whether it’s something you value. Is it something that meets all your values? Can you meet the value in some other way that doesn’t cost as much money?” Bad habits are not eliminated, they are replaced with good habits. The point is to understand what your bad money habits are so you can replace them with spending toward your values.
- Reflect on your top values, and see how your spending plan matches up
This last part of the exercise can take some time, and it is likely to evolve and require check-ins and additional reflection but take some time to think about your top values in life and see how your spending plan matches up with those values. In thinking about values, don’t just think about your “core values” like family, friends, or travel. Try to be specific enough to create action items, like “I value international travel once a year” or “I value the time I spend at a family’s lake house every summer.” There may be some give and take, and Jen and Jill rightly pointed out that you can’t buy everything. Pick out your top 4-5 values and this will help you dial into your financial goals and eliminate the extra spending that is getting in the way of you being able to realize those goals.
- Re-think “Fixed” Costs like Housing, Car payments, and Utilities
Fixed costs are not always as fixed as we think they are. When looking at areas to cut costs in our budgets, it is easy to get stuck in a rut pointing to the same areas like eating out and weekly lattes. While sometimes it is necessary to cut down on these discretionary spending categories, you could possibly be missing significant savings in the larger “fixed” cost categories like rent, monthly payments, and utilities. Jill explained, “One of the things that we recommend to people, look at the heavy hitters of your housing, transportation, food, clothing, and bills, like your utilities. These are going to be the ways that we can make drastic changes in our finances over cutting out the latte or the cappuccino.” Jen added, “Housing and transportation are the decisions that will make the biggest impact on your spending, hands down. We don’t like to say that they’re fixed… because people think they can’t move something that’s fixed. We like to think of them more as foundational. You’ll always have some kind of living expense. You’ll always have some kind of transportation expense. But outside of that, you can get very flexible with what that expense is and how you execute it.” Jill shared a story of how she and her husband chose to live in an RV so they could spend less on housing and aggressively pay off their debt. Another example could be to cut down on the number of cars that you own or negotiate utilities regularly. These are often the largest expenses on your budget and thinking of them as non-negotiable or “fixed” can lead you to pay more over time.
- Cancel Automatic Subscriptions that you don’t use
With the number of subscriptions out in the world, it can be so easy to lose track of the subscriptions you are using and the ones you forgot about. A recent study found that the average American household has 4.4 subscriptions and that over 30% of these subscriptions are going unused, leaving $25.34 wasted each month. Using Mentoro’s Wallet tool, you can keep track of all your subscriptions and remember to cancel the ones you aren’t using or prioritizing at the moment. This can be a great way to cut down on an unknown monthly expense that is coming straight out of your paycheck without you realizing it.
- Plan a grocery list and meals ahead of time
In the interview, we discussed how Americans spend 15% of their monthly income on groceries and eating out. While inflation has been a large reason people are seeing rising grocery prices and many people who do not have access to fresh, affordable food, the Frugal Friends provided some helpful tips to reduce food waste and stay within budget in your meal planning. The number one recommendation that they had was to plan for the meals that you will be having in the upcoming week. A helpful first step before going to the store is to check what you already have on hand in your pantry. One interesting note, AI can help you do this by creating recipes from the ingredients you have on hand, further eliminating your need to purchase more. Next, the Frugal Friends recommend shopping the perimeter of the store. As Jill mentioned, “There are tons of helpful resources out there to help you if that’s not your area of expertise…. This is where you’re going to find your fresh veggies, and fruits, shop what’s in season, your meats, your breads, your grains. If you can stay away from those middle aisles, which are your processed packaged food, it’s going to be better for your body and better for your wallet. And again, shopping in season is going to be super helpful, and reducing that food waste is what’s going to be the result of making sure that you’re cooking up those things throughout the week.” Jen also suggested that if you are the type of person who struggles with letting produce go bad in your refrigerator, buying frozen food can be a great alternative.
- Meal Plan for your actual week, not your ideal week
One mistake that many make when attempting to save money and cook more is to do a meal plan that is difficult to execute and involves too much work time or clean time to accomplish in the time you have. This can be a slippery slope, and when running behind, it can be easier to justify a fast-food meal due to the overambitious dinner plan. Jen wisely advised, “Focus on simplicity and ease. If you are not somebody who loves to cook or do dishes, then create a meal plan you will actually follow through with. I think that’s even more important than making a meal plan. Do not make a meal plan for somebody else. Make a meal plan for you. And if that includes buying some pre-packaged, pre-chopped, pre-assembled stuff from the grocery store if that’s what’s going to throw it over the edge for you to actually follow through with your meal plan, do that because the little more that you spend on pre-prepared ingredients, you will still save money versus choosing to do take out that night.” Another helpful tip could be to make extra servings of certain meals and keep them in the freezer, that way you can pull them out when you need them. There are many resources and ways to save money on your weekly meal plan, to find more, check out this podcast from the Frugal Friends.
- 24-hour rule- Try keeping your items in your cart for at least 24 hours to avoid impulse purchasing
Impulse purchases can be so tempting, especially when there are so many sales and social media is pushing out more and more custom advertising to your specific interests. One tip that can be helpful to avoid emotional spending is to impose a “24-hour rule” to all miscellaneous online purchases. To put this into practice, add the desired item to your cart and return it to your cart after 24 hours to see if you still want it. This practice requires you to make more thoughtful purchases that are not based on mood but can allow you to spend toward your values.
- Enjoy free community events
Everyone can feel the pressure to take advantage of the weekends or the summer months which are full of free time. Many times, these outings can cost hundreds of dollars and it can be easy to find yourself spending lots of money every time you walk out of the door. Instead of feeling trapped in the house, take advantage of free community events by signing up for local newsletters to let you know when fun things are happening. This can be an excellent way to stay involved in supporting your local community, as well as saving some money.
- Surround yourself with people who encourage your goals
Refocusing your efforts on being more frugal can be very difficult. Although practices like “values-based spending” that help you spend money on what you value make it easier to cut down on superfluous spending, it can be difficult to break old habits and spending patterns. This problem can be exacerbated by not having supportive people who are on the same page about pursuing financial goals. Achieving your spending goals does not mean that you must leave your friends and family behind, but it means that you might have to enter situations with a plan in mind, and it can also help to surround yourself with friends who share your goals. Jen and Jill originally bonded over their mutual love of saving money and have created a community through their podcast of friends who strive to be more frugal together. Meeting with your Money Mentor can also be a great source of community and having someone more experienced to work towards your financial goals can help you stay on track. Finding ways to have community without spending outside of your values can be a challenge, but ultimately surrounding yourself with people who are supportive of your personal and financial goals is a great way to make them happen.
To get more money-saving tips and create a life you love, visit the MyMentoro portal to start today.