Spending is where desire meets the real world. Every purchase is a small vote for what we think will make us happy, comfortable, or secure. A steward isn’t just trying to spend less, they’re asking a harder question: what are we actually after?
Most people don’t need a lot of primer on how to spend money. Not all spending is bad - it is how we circulate value in the economy, support local people doing good work, and vote with our dollars for the kind of goods and services and food we want to see more of in the world. Spending money wisely can be an art, but for most people it takes more intentionality to cut back on spending so we will focus on that.
The less you spend, the less you need to make or save to sustain your lifestyle. Spending less means you need a smaller emergency fund, less saved up to live on later in life, and more freedom now to simply change jobs or cut back from the grind a little.
Flexibility = Earning - Spending
The wider the gap between what you make and what you spend, the more margin you have in your life.
Cutting expenses is something you can start today. I’m not advocating for total deprivation. But after some basic food, water, and shelter; the rest is a story we tell ourselves. Cutting spending can feel like a loss, but we can ask ourselves is all this spending really making our lives better? More fulfilled? More joyful? With some intentional focus and cutbacks, it is highly possible that the quality of our lives may even improve by spending less.
Know where your money is going
To spend less, you need to know where your money is actually going.
It’s helpful to estimate what you think you spend on a monthly basis, then dig to find what you actually spend. Use your tool of choice here - spreadsheets, software like Monarch or YNAB, or old school pen and paper - and using at least a few months to smooth out big one-time purchases, arrive at a monthly spending amount by category. Reality is often shocking and we can’t adjust what we aren’t aware of. I had no idea how much we spent on groceries and eating out until we did the exercise of bringing it all into one place.
Wants vs needs, contentment
This is where the real work happens. You have to get honest about the difference between wants and needs. To survive we need food, water, shelter, and basic clothing. In our modern world we might add transportation, utilities, and insurance to that. Everything else beyond that is a want. If we can be content with what we have and shut out the voices constantly telling us to upgrade (cars, phones, countertops, etc.) our hearts and our wallets will be better for it. When you want to cut back on spending, wants are where you look first.
Contentment is a practiced discipline - Paul calls it something he learned - and it may be the most countercultural skill we can build as stewards.
Big wins - housing, transportation, food
If you take your expenses and group them into categories you’ll often find the biggest buckets of money going out are related to where you sleep, how you get around, and what you eat. People love to obsess over cutting their morning coffee or reusing tea bags to save a nickel. Those frugality tips can be fun challenges if you’re into that. But I’d rather you start with the big expenses and work your way down.
Housing
Housing is often the biggest piece of the spending pie and the biggest opportunity to save. Depending on your situation, you may be able to get a roommate, move to a cheaper neighborhood, downsize, house hack, work-trade for rent, refinance if interest rates drop, or any other number of creative ways to spend less on where you sleep at night. Home improvement costs are sneaky - it’s easy to justify renovations by mentally counting them as investments, but often the return is less than you spent. Think of them as lifestyle choices with a possible small payback in some distant future.
Transportation
We love our cars in the USA, but they bleed money. Cars advertise their miles-per-gallon, but it is helpful to think in terms of the dollars-spent-per-mile. Luckily the IRS does this for us and says $0.70 per mile - that includes gas, maintenance, insurance, registration fees, and the car’s decline in value over time. Americans drive an average of 14,000 miles a year - that’s $9,800 per year to sit in a chair stuck behind other people and press pedals.
Trimming transportation costs could mean swapping an expensive car for a reliable beater, downsizing to one single family car, biking to work, using public transport, living closer to work, working from home, carpooling, and walking when possible.
Driving a paid-off, reliable, boring car for a few years is an easy place to build margin in your finances. It’s not as sexy as the latest model truck or sports car, but you are buying a little more flexibility with every intentional choice.
Food
Cutting back on dining and takeout is often the quickest win here. Make most of your food most of the time. Cooking is often healthier, builds more awareness of what goes into our bodies, and opens the door to having people over for shared meals. I care a lot about food quality, so I am not advocating for living off the cheapest garbage food you can find. Quality ingredients from quality grocery stores can still amount to less because you will be cooking at home instead of paying someone twice the price to do it for you. Finding ways to buy in bulk helps no matter your food quality preference. A chest freezer helps store the bulk buys, as well as loading up on other items when they are on sale.
When you do eat out, it will feel more like a gift than a default. You can really cut back on spending here without reducing the quality of your life by being disciplined most of the time when no one is looking, and saying yes when the opportunities come to spend time with other people.
Quick wins - subscriptions, impulse buys
Total all the subscription charges you have. This includes streaming services (Spotify, Netflix, Hulu, Disney+, etc.), Wi-Fi, phone bills, gym memberships, Amazon Prime, cloud storage, apps, and other software you pay for monthly.
A few innocent charges can quickly add to a huge monthly recurring hit. Cancel everything you haven’t used in the past month, reduce to a lower tier plan where you can’t cancel, share accounts with family, and really ask yourself if the subscription is adding value to your life.
Impulse purchases go back to the wants/needs thing and also setting some guardrails to slow ourselves down. Typically if we can wait to make a purchase, whether it’s a day or a week, the urge will pass and we will have forgotten about it.
Formation wins - blow up your TV, lifestyle creep
The voices and images we let into our minds are subconsciously forming us.
Every ad you see is designed to make you want something. Every influencer post is selling you a lifestyle. If we can make our smartphones and our devices a little more boring, we’ll be exposed less to marketing, which will lessen its formation on our desires, lessening what we feel we need to buy. If you’re bold you can delete social media entirely. If you keep it, unfollow accounts that are selling you on a lifestyle or specific things. Get rid of the promo emails, delete Amazon and other shopping apps, and only go to the store when you have specific mission in mind.
Lifestyle creep is when our lifestyle rises as we earn more. A raise, a promotion, a bonus comes and suddenly the nicer car, bigger house, and more frequent take-out feels within reach. You’re making more money but spending it just as fast, so the gap between earning and spending stays the same or even shrinks. This can reset our expectations to a new baseline and leave us in golden handcuffs. Someone making $40k and saving $10k (25% savings rate) is buying their freedom faster than someone making $100k and saving $10k (10% savings rate).
If we can curate the voices we let in and slow the drift towards accumulation, we will be less bogged down with stuff and more ready to give away what we have.
Miscellaneous
Here’s a rapid-fire list of other high-leverage places to evaluate your spending:
Insurance - if you have a cash cushion, go with higher deductible, lower monthly premium plans that save you money every month. Insurance companies offer similar policies and compete with each other by offering intro rates and discounts that often expire after a year or two. Send policy disclosures to an independent broker and have companies compete to give you the best price. Ask current provider to match discounts that would keep you from switching, otherwise switch providers.
Income Taxes- These take out a huge chunk of our paycheck before it ever hits our bank account. Most people would do well to learn a little about how taxes work and perfectly legal ways to reduce them, potentially reducing the amount you “spend” in taxes and channeling it towards giving and investing.
Property Taxes - at the start of each year or every time your locality raises property taxes, you can contest them. Bring solid data and rationale and they may reduce the assessed value of what you own.
Children - raising a family is beautiful and also brings new expenses like possible childcare, babysitting, diapers, term life insurance, clothes, food, and more. Fortunately folks that are finished having kids often quite literally throw stuff they no longer need at you, so very little needs to be bought new.
Medical bills - ask for itemized receipts, research the CPT codes, and prepare to play hardball negotiating with hospitals. Prices are largely made up. You have more time than you think and more ability to ask for a better cash price to settle a bill.
Utilities - again, start with the big movers. Big machines use the most power in the house - changing the thermostat by a few degrees, hang your clothes to dry, turn down the default temperature on your water heater, and find other ways to reduce usage of big ticket power users.
Travel - many people play the travel hacking game, which can work but is only for folks with a reliable history of credit card discipline.
Phones - use discount phone plans like Visible or Mint, they use the same towers as the big names but often are half the cost for the same general function.
Pets - all I will say is pets are a choice and will love you the same whether you feed them caviar or kibbles.
Libraries - use your local library, you’ll likely find most books you want to read and sometimes they will even order new ones upon specific request. Libraries often have movies, books on tape, podcast equipment, board games, instruments, seed swap programs, and more that can be borrowed.
Changing locations - if your job is location flexible, consider living in a place with a lower cost of living, possibly even another country.
Tools to help
The Conscious Spending Plan
Budgets often feel restrictive and can make the act of spending money feel bad. Most people throw them to the wind because it is hard for guilt to be a sustainable motivator.
I have found Ramit Sethi’s Conscious Spending Plan useful to put the entire financial picture onto a single piece of paper, cutting costs mercilessly on things you don’t care much about, and spending consciously on the things you do care about. For example, I don’t care much about cars but I do care about quality food. So we drive an old paid-off Toyota but bite the bullet at our local crunchy grocery store.
You can’t ball out in every category, and you can’t sustainably cut everything, so it comes down to tradeoffs. Putting awareness and intention behind spending makes it feel less like money is happening to you, and building margin into your spending leaves space for the unexpected expenses that will always pop up.
Minimalism and frugality
These are useful tools but are not in themselves solid places to park your identity. Some people love the challenge of living on as little as possible. The internet is full of savvy ways to do such things. I like both of these, but I also need other people reminding me to not let thrift turn into cheapness and lock me in a prison of perceived virtue.
So it becomes a balance of making choices and sacrifices up front with the knowledge that each decision helps build financial flexibility, while also enjoying what God has given you and sharing it with others.
The cash envelope system
If you really need to get control of your spending, try the cash envelope system. Take physical cash and put it in envelopes labeled for different categories. $800 for groceries. $200 for gas. $100 for eating out. Whatever your budget is.
When the envelope is empty, the only way to spend more in that category is to take it from other envelopes. It is old school and inconvenient on purpose. Handing over physical cash hurts more than swiping a card in a way that builds consciousness around spending habits. You don’t have to do this forever. Just until you build the habits and awareness to control spending without the training wheels.
Conclusion
Learning to be content brings a richness the wallet can’t contain — more presence, more generosity, less anxiety, and fewer golden handcuffs. The more you can trim your expenses without making yourself miserable, the faster you can build that margin.
Focus on the big categories first and then move on down the list. Track your spending at least in the beginning, automate your system, and revisit it regularly to check in.
You don’t need to be the most frugal person alive, you’re just trying to widen the gap between what you earn and what you spend — and the reason it matters is what the gap makes possible.