Finding a Balance Between Saving and Spending

Some of the links in this post are from our sponsors. Read our disclosure to see how we make money.

Between spending and saving

Before we started our journey out of debt, we had no direction whatsoever as far as saving and spending were concerned.  Because we had no plan, every expenditure made us panic, necessity or not.  Saving didn’t feel good, it felt bad, because deep in our hearts, we knew it would never last.  After we started our journey to debt freedom, it took us a good year to get into a groove and get over the guilt that we associated with having to – or wanting to – spend money.

A year and a half into our journey, we’re finally getting to a place where we have some balance in the area of both saving and spending, and we’ve learned that saving well – and spending well – are both vital parts of a journey to financial independence.

Saving and Spending – Why Balance in Both Areas is Crucial

Having balance regarding saving and spending money is important to a goal of debt freedom or financial independence because, whether or not you realize it, every little bit adds up.  Those dimes and nickels you save add up, over time, to a lot of money.  Saving a couple of bucks on your utilities, your cable TV, your grocery bill or your entertainment monies might not seem like a bit deal at the time, but if you add them up over the year, I can guarantee you that you’ll end up with a nice chunk of change in your pocket.

Having balance regarding spending money is equally as important.  What I mean by balance, though, in this area, is that when you spend, it’s important to spend well.

Learning to Spend Well

For instance, us being on a pretty strict budget right now as we whittle away at our debt, going out to eat is something we usually only do three or four times a year.  If we’re lucky.  However, this month we made an exception, and accepted an invitation to join a beloved family member in celebrating her birthday at a sit down restaurant. We all paid our own way, and all said and done, our final bill for our family of six was, with tip, $78.  That’s a lot of money for us, and it’s the reason we rarely go out to eat.

As we planned in advance for this expenditure, all sorts of things went through my mind.  I checked the online menu for prices, added up rough estimates for what each meal would likely cost, and looked for online coupons.

Then I realized that if the three of us who were purchasing adult meals ordered water instead of pop, we’d save an additional $8-$10 dollars.  Woohoo!  We were whittling down that bill by more money with each passing minute!


So, we’re going to spend big (to us) money on a rare dinner out, and then deny ourselves a glass of pop – which we rarely drink  – in the name of saving a few extra dollars?

Absolutely not.  This, to me, was going overboard.  If we were going to enjoy a dinner out, then we were going to enjoy a dinner out – not spend the whole evening and subsequent days wondering whether or not we should’ve splurged for an extra $8 on pop.

And this is what I’m talking about.  Yes, you should constantly be on the lookout for ways to save extra.  Yes, you should spend money on things that are of value to you instead of making random, useless purchases for the sake of the YOLO lifestyle.

However, when you find yourself faced with a value-based purchase – enjoy it.  Don’t freak out about whether or not you should order your burger with cheese or not because it costs an extra buck.  If the purchase you are making truly is value-based, then, by all means, get the cheese!!!!!  And get the pop.  Enjoy yourselves and don’t flip out about the fact that you could’ve spent $10 less.

You see, the great thing about having a balance between saving and spending is that it puts you in a financial position to worry less about those little extras, because those little extras aren’t spent on all that often.

This is the peace of mind that comes with having a financial plan that fits your life, and sticking to that plan.


How do you find a balance between saving and spending? What do you allow yourself to splurge on once and awhile, even as you pay down debt or live on a budget? Is there anything you’re not willing to give up?


Photo courtesy of: Free Digital Photos

The following two tabs change content below.
Laurie is a wife, mother to 4, and homesteader who blogs about personal finance, self-sufficiency and life in general over at The Frugal Farmer. Part witty, part introspective and part silly, her goal in blogging is to help others find their way to financial freedom, and to a simpler, more peaceful life.


  • Catherine says:

    Value based purchases are sp important. This really is a learned skill that I have become a little too strict with sometimes (ie can’t decide of I should say, buy underwear when im fact I know ilthe only pair I have Im currently wearing haha).

  • Liz says:

    You are right on about the value-based purchases. IF you are going to do something special, like eat out or go on a trip or something, you might as well just enjoy that trip. When we took our big trip to Greece last year we struggled with that idea. I remember debating over ordering dessert one night. Then we reminded ourselves.. How often will be taking a vacation in Greece? NOT OFTEN. Might as well order the $5 dessert and just enjoy it.

  • I love the approach of knowing your goal and setting your plan FIRST and then spending whatever is left, without guilt, however you choose. That makes sure the plan is in place AND you get all the cheese and “pop” you can afford!

  • Lauren says:

    Balance can be tough when you’re living on a tight budget and/or paying down debt. I try not to feel guilty about little splurges here and there, since I’ve gotten good at cutting out wasteful spending.

  • Laurie I’m starting to think of you as a “savings guru.” You seem to have a lot of insight on how to properly analyze what you should and shouldn’t spend as well as how to make it work for your life and the goals you have.

    Anyway one thing my wife and I need is vacations. We do have debt but we aren’t afraid to spend a bit on these because in all honesty it’s one of the only times we relax. We’ll go nearly two years without one as we have the Hawaii trip coming up. The Hawaii trip I won but will pay taxes on, so it’s like a deeply discounted Hawaii trip.

    As a new(er) homeowner I have noticed how I consistently spend on our house. We have a house that we will be working on basically until we sell it a few years down the road. We’ll always have some project going on that requires money here and there. Needless to say, I’m constantly evaluating this spending to make sure it will “pay off” down the road. That’s one reason I don’t mind putting some money behind our DIY projects, and why I feel good doing them!

    • LOL – thanks, DC – I love the word “guru”! 🙂 I think those vacations are SO important, and we are eager, eager to begin taking them again. It also makes a ton of sense to analyze the home improvements from that perspective, as some home improvements make a lot of sense, and some make zero cents, at least from a ROI perspective.

  • I know exactly what you mean Laurie. I was thinking of that last week when I went to a state park for my friend’s birthday, which was free except for gas to get there. My friend then invited me to go to a street food cinema thing in the evening. My frugal brain kept thinking, “no no, that was enough spending today with gas and whatnot,” but the thing is I could let a whole summer go by without taking advantage of the fun that is street food cinema. I would be kicking myself later if I just went home…AGAIN…and watched netflix alone. I do that enough, so the occasional fun splurge is a good way to connect with friends and do something I don’t normal do. Now I’m not going to do that every weekend…and that’s where the balance comes into play. It’s still hard though I must admit. My frugal brain often feels guilty.

    • So glad you went to the cinema thing, Tonya, and I’ll bet it was a ton of fun. 🙂 I totally get you about the guilt – it’s difficult when it kicks in, but you are so frugal in so many other ways, and I think sometimes you just have to have fun.

  • I think we’ve finally found a good balance between saving and spending. We were annoyingly frugal for a while, but we’ve relaxed a bit!

  • Tania says:

    So true! I found that once we got out of credit card debt is when I got really panicky about spending that extra dollar. I’m so scared to YOLO my way back into debt that I tend to lose sight of what’s insignificant or not when it comes to spending. Glad to know I’m not alone!

  • Kathy says:

    I still have a hard time spending money even though as my husband reminds me, we have zero debt, a nice bank account, our child is grown educated and on his own. I have had so many years of pinching pennies that I’m having a hard time changing gears. I don’t think I’ll ever become a spend-thrift but I’m trying to realize that the money is there to use and enjoy.

    • Kath, this reminds me of a story I read in, I think it was The Millionaire Next Door. The millionaire in the story gives his wife an 8 million dollar check for her birthday: the result of decades of hard work and frugalness, hoping to surprise her, and she says, “That’s nice dear, thank you.” and goes back to clipping coupons for her grocery shopping trip. 🙂

  • I think a balance is absolutely necessary so that you don’t get what I call “savers fatigue” where you lose steam on your savings goals because you haven’t given yourself enough of a break. We all have a long road to financial freedom and without balance, we won’t have the energy to make it through.

    • That’s a great term for it, Shannon. I think it’s important too to manage money in a way in which it keeps you motivated and reaching for those goals. The “fun factor” still needs to be there. 🙂

  • Love this, Laurie! This is exactly how people need to think when it comes to their money. We have this tendency (and I have no idea why) but we look at it from an extreme perspective. We’re either YOLOing all over the place and wasting money or we’re being frugal to the point of cheapness and not permitting ourselves to enjoy our money. There needs to be a balance and that’s where your goals and values make a huge difference. It’s smart to do a quick search for an online coupon and look over the menu in advance. Then enjoy your rare meal out for all it’s worth.

    • You’re so right about the extreme thing!! You know, that meal out was the first one we’ve really, really enjoyed – all of us – and it was SO fun just to enjoy it, but I don’t think we’d have enjoyed it so much if we hadn’t worked so hard on keeping up with our debt payoff plan and learning to find that balance and truly enjoy the value-based spends.. 🙂

  • Derek at MoneyAhoy says:

    I like to splurge on electronics once every couple of years. A computer upgrade, TV, gadget, something like that. I think it’s important to save up for something so that you have a long/medium term goal and a reason for working so hard. You need to enjoy life somewhat along the way while you’re saving 🙂

  • We used to be really bad about exactly what you mentioned- treating ourselves to something and then going cheap on it and feeling like we have to pinch pennies even when treating ourselves. We’ve relaxed on this a bit as our income has grown, although some days I worry that we’ve relaxed TOO much. It can be such a delicate balance sometimes.

  • Will L. says:

    Yeah, I think saving money is super easy once you realize what you value in life. If you value the extra cheese dining experience – GREAT. Just understand you don’t value something else.

    Spend here. Save here. Just know when it’s appropriate.

    My $.01. I saved the other $.01.

  • There’s nothing wrong with treating yourself and leaving a little room in the budget for the fun stuff. I don’t think I would be happy spending less and paying off debt if I didn’t have room in my budget for some fun stuff.

  • So much of this is living for today while planning for the future. It’s hard! This is a great post.

  • Kim says:

    I think it’s always a balance. If we can’t spend from time to time, what’s the point? I think you appreciate those times when you do splurge much more because they are well thought out and you look forward to them. When you splurge all the time, that becomes normal and then you are just broke and don’t know how to appreciate anything.

  • I didn’t catch the author when I started reading, but I knew it was you, Laurie, when I read the word “pop.” I used that word in a podcast recently and caught some grief for it. We Minnesotans have to stick together. 🙂

  • Great article…you covered it well and agree that so as long as you normally live according to a strict budget or plan, it’s OK to loosen the the belt for one night every once in awhile. Best wishes! AFFJ

  • We try to spend on what is important to us which happens to be experiences like travel, and relationships (family/friends). As a result we have a higher travel and entertaining budget, and we are frugal in other areas (clothing, household items, etc). It works for us and it gives us a nice balance.

    • “It works for us and it gives us a nice balance.” This is so very important, Daisy. Others might think “Wow – they spend way too much on travel and entertainment” but you know where your priorities lie, and you spend accordingly, and that’s the key to financial success.

  • Michelle says:

    Finding a balance between spending and saving is a hard line to walk. I feel like I have been working so hard, so I deserve something little for all of my work, yet do not want to spend any money because it would hurt my savings.

Leave a Reply

Your email address will not be published. Required fields are marked *