How To Save Money And Not Spend It (10 Simple Tips)

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How to save money and not spend it | Be The Budget

Do you struggle to save money and not spend it?

You’re not alone.

I spent years tapping into savings and stealing from my own financial future. In fact, at times, the only reason I would put money into savings, was to build up enough cash to make my next big purchase. So, in other words, I can relate.

But if you want to build wealth–and escape the paycheck to paycheck lifestyle–you need to break the habit of dipping into your savings. The good news is, if I can do it, anybody can.

All it takes is a little bit of discipline (provided by you), and a few helpful tips (provided by me).

Let’s get to it.

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Do A Budgeting Checkup

I’m a strong believer that getting on a budget is the first step to financial freedom. Additionally, going forward, it should be the starting point for every financial decision you make.

But, if you constantly find yourself running low on funds and dipping into savings, it is likely just a symptom of an inaccurate, or mis-aligned budget.

So, in an effort to protect your savings, let’s do a quick 3-step budgeting check-up.

#1 – Assess Your Expenses

If you’re constantly pulling money from savings, one of two things is happening. Either you are spending too much money, or you aren’t budgeting enough for expenses in the first place.

So, lay out every one of your expenses for the last month, and be honest about which ones are necessary, and which ones are frivolous. If there aren’t many frivolous expenses, you may just need to adjust your budget. If there are, you probably need to address your spending habits.

#2 – Repair The Leaks

Every budget is bound to spring a few leaks now and again. But even small leaks can lead to disaster. So, it’s time to repair them.

What is a budgeting leak? A budgeting leak is any monthly expense that is small enough to be overlooked, but consistent enough to cause you to spend beyond your budget. Most commonly, budgeting leaks manifest in the form of food spending, subscriptions, or retail shopping.

For instance, almost every time I start to spend beyond my budget, I can relate it back to a series of $7 Chipotle burritos. Individually, they don’t seem like a problem, but over the course of a month, they can drain my budget. (I’m sad even writing that)

So, what’s your leak?

Are there any small, consistent expenses you can reduce or eliminate that will keep you from going over-budget and dipping into savings? Comment below and let us know.

#3 – Be Realistic

If a married couple with five children told you they set their grocery budget at $100 per month, you would probably laugh at them. But if you constantly find yourself pulling money out of savings, you might be doing the same thing; just on a less obvious scale.

There’s no use putting $100 into savings each month if you’re just going to have to pull it out to pay for the same reason you do every single month.

The reality is that you might just need to add $100 to that category of your budget.

10 tips to save money and not spend it. Take control of your spending with these 10 money saving tips. Stop dipping into your savings. #savemoney #moneysavingtips #howtosavemoney | BeTheBudget.com

Segment Your Savings

There are many different reasons to save money, yet most people only have one savings account. The problem with this, is that any expense, over and above your normal monthly budget has to come out of one big pile of money, which doesn’t feel good.

Just like every other expense in your budget, every dollar you put into savings should have a purpose. Are you saving for car maintenance? Are you saving for Christmas? Are you saving for a vacation? Then, separate your savings into different accounts that each exist to serve a defined purpose.

These accounts can be broken down into two categories: your emergency fund, and sinking funds.

Emergency Fund

If you don’t have an emergency fund, building one should be your number one savings priority. Like the name suggests, this fund should sit around, waiting to protect your financial life from emergencies. But let’s clear something up, a flash sale at your favorite retail store, is not an emergency.

We’re talking about true emergencies like: unexpected medical expenses, sudden job loss, or buying a new furnace in the dead of winter when your current one stops working.

So how big should your emergency fund be? You should have a minimum of 3-6 months worth of living expenses in your emergency fund. That means that if your monthly cost of living is $2,500, your emergency fund should hold between $7,500 and $15,000.

Sinking Funds

Sinking funds are essentially savings funds for predictable or inevitable expenses in life.

For example, you should have an automotive sinking fund. Why? Because car expenses, while inconsistent, are inevitable. Every car needs repairing at some point, so you should be setting money aside each month to prepare for them.

Another great example is a Christmas sinking fund. Every December you can count on the fact that you will need to buy a bunch of gifts for the people in your life. So, you should prepare your finances by putting a little money into a Christmas fund each month.

The added benefit of sinking funds, is that as long as you use the money in a sinking fund for its designated purpose, you don’t have to feel bad about dipping into it. Just don’t go buy a pair of shoes with money from your family’s vacation sinking fund. That’s not cool. (Actually come to think of it, you could set up a sinking fund for shoes, and use that money.) Sinking funds are cool!

Isolate Your Emergency Fund

In order to protect your emergency fund, you should isolate it as soon as possible. In other words, move your emergency fund to a completely different bank.

It’s important that this money remains out of sight, so that you aren’t tempted to tap into it every time you log in to your bank account.

It’s also a good idea to move your money into an account with restricted access, or penalties for withdrawing money. Let me put it this way, it’s better to be penalized $30 for withdrawing money in a real emergency than to consistently dip into savings each month, penalty free.

Stop Over-Saving

If you don’t have a spending problem, yet still find yourself dipping into savings, you might actually be trying to over-save. What? Is that even possible?

Yes.

Often times, we get so focused on our financial goals, that we abandon the reality of our income. Simply put, saving beyond your ability doesn’t work.

In other words, if you make $5,000 per month, and your living expenses are $3,000, you can’t put $2,500 into savings each month. Math is math. There’s no getting around it.

If you struggle to save money and not spend it, take a deeper look and make sure you aren’t trying to over-save.

Simplify Your Spending

One of the easiest ways to complicate your financial situation, is to spend money from multiple accounts. So, instead, we recommend using your debit card for every single purchase.

When you only have to log into one account to track your spending, everything becomes much simpler. Fewer dollars slip through the cracks, and in turn, you won’t have to dip into savings to make ends meet.

I know this idea goes against the grain of society these days, but I can honestly tell you that this has been a game changer for my wife and I. Now, either one of us can log into our bank account at any one time and update our budget without missing a single cent.

I’m telling you, it works, and it will protect your savings.

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Recommit To Your Financial Goals

What’s the purpose for your savings?

Why?

Because, without any inspiring financial goals that you’re working hard to achieve, you are much more likely to dip into your savings. In other words, you need a more compelling reason to leave your savings alone, than your reason to spend your savings.

So, if you don’t have any financial goals, set some. And if you have lost sight of your goals, recommit to them. Otherwise, your savings account is in danger, and your financial future is at risk.

Set Up Financial Guardrails

One of the best things you can do if you want to save money and not spend it, is to build some guardrails into your financial life.

But what are financial guardrails? Financial guardrails are protective measures you put in place to stop yourself from making a bad financial decision in the future. For instance, if you want to avoid debt, cutting up your credit cards could act as your guardrail. Or, if you want to save money and not spend it, you could move your savings account to a different bank.

The purpose of a financial guardrail is to add resistance or difficulty to a bad financial decision, long before you make it.

Implement Some Accountability

If you’ve ever had a good workout partner, you’ve experienced the power of accountability. Whether they helped you get your butt out of bed and into the gym every morning, or encouraged you to push through those few extra reps, a little bit of accountability can carry a lot of influence.

Yet, when it comes to personal finance, we tend to keep everything very private. And therefore, we don’t have anyone to hold us accountable.

Thus, if you want to save money and not spend it, find yourself a financial accountability partner.

Just to be clear, I’m not saying you should announce your financial situation to the world through social media, or even tell your 5 closest friends. No, I’m saying you should find one extremely trustworthy friend or family member to become your financial fitness partner.

Together, you can hold each other accountable, encourage one another, and whip your finances into shape.

Change Your Mindset

One of the most difficult things about budgeting, and personal finance as a whole, is feeling like you’re always playing financial defense. Whether you’re cutting your budget, spending less, or trying to save money and not spend it, the defensive mindset can become a burden. And honestly, it sucks.

The good news is that a simple shift in your mindset can change everything! It’s time to start playing offense.

For instance, every time you feel like pulling money from savings, instead, force yourself to go earn the extra money you need.

Instead of ‘cutting your spending’, think of it as ‘fueling your financial goals’.

And, in place of, “I need to spend less money,” say “I’m going to save more money this month than I ever have.”

Stop playing defense, and shift your mindset. Attack your finances, and show your money who’s boss.

“Never give up! Never surrender!” –Jason Nesmith

Consider The Repercussions

Everything you do in your financial life has long term consequences, and pulling money from savings or investments is no exception. What seems like a small, insignificant decision now, will carry lasting repercussions.

For example, did you know that if you put $100 into a mutual fund–that earns an average of 10% per year–and let it sit for 40 years, it will grow to over $5,000?

So, essentially, every time you pull $100 from savings, you could be costing yourself $5,000 in retirement. The worst part is, 40 years from now you probably won’t even remember why you pulled that money out of savings.

Translation: stop dipping into your savings and spending it. You are draining more money than you know from your ultimate financial dreams.

Final Thoughts

If you struggle to save money and not spend it, you might just need a new strategy. Whether you need to adjust your budget, find an accountability partner, or start playing financial offense, the tips in this article can help you protect your savings.

How to save money and not spend it. These 10 money saving tips will help you protect your savings and build your financial future. #savemoney #moneysavingtips #howtosavemoney | BeTheBudget.com

How to save money and not spend it. Your financial future depends on your ability to save money and not touch it. These 10 tips will help you do just that! | BeTheBudget

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About The Author

About The Author

Zach Buchenau is a self-proclaimed personal finance nerd. When he isn't writing about budgeting, getting out of debt, making extra money, and living a frugal life, you can find him building furniture, fly fishing, or developing websites. He is the co-founder of BeTheBudget, and Chipotle's most loyal customer.

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