Budgeting, Featured, Saving

How Budgeting Cut My Spending By 20% Per Month

In 2016, I started a new job, and I started making way more than I ever have before. I’ve always been pretty conscientious about my spending, but when you start making 2.5x your old salary and you let your guard down just a teeny tiny bit, you’ve got a case of lifestyle creep on your hands.

Lifestyle Creep

While I didn’t go all out and upgrade my life (that would have been far more than just lifestyle creep!), there were small things here and there that I wasn’t as stringent about anymore. It generally came down to:

  1. Ubering + Lyfting way more than before (even at Pool/Line prices!)
  2. Eating out way more than before/less intention when deciding to eat out
  3. Shopping way more
  4. Travel + Splurging on some adventures I wouldn’t have before (no regrets on this one!)

I knew roughly these were the categories I was overspending in, but I really didn’t attempt quantifying by how much I was overspending in each category.

Letting My Spending Guard Down

After my boyfriend and I moved in together in February, the unexpected expenses (tsk tsk) of moving (security deposits, moving truck, and a few new purchases) combined with us planning our 2 week trip to SE Asia and splurging on a super cool 2 day caving adventure in Vietnam combined with me owing the IRS $20,000 in taxes from the 5 months I was doing contract work the previous year all came to a head.

The issue was the entire month was kind of a wash due to lack of upfront financial planning and saving. It was sort of the perfect storm. I did have the money set aside for the taxes, but I didn’t have any money set aside for my move or my vacation. But the bigger issue was that it trained me to believe I was in an “exceptional” period of spending.

Except the spending didn’t end in February. It started trending a little lower, but I was spending more than I ever had before. In March, I hardly cut my spending despite being in SE Asia which is a dirt cheap place to travel for 2 weeks. I lost track of my budget. I was on and off with Mint in the past and hadn’t quite figured out a total foolproof system, so especially during a time where it seemed the money I was spending was unaccounted for anyway, I stopped checking Mint. Huge no no.

The Breaking Point

I sort of assumed the spending would stop once all the exceptional expenses did. Suddenly my spending month after month was almost double! I ran month after month over budget. I was still maxing out my 401k, but I knew I could do better with saving. I was hardly saving more than I used to when I made so much less. After the third month of hardly transferring any money into my savings account, enough was enough.

I popped open Mint again. I revamped everything. I redid my budget. I redid my categories. I created areas of rollover I could dump miscellaneous spending into. I made sure if I spent any money, I had a plan for tracking it.

Budget To The Rescue

Let me show you a nifty graph Mint generated for me from my spending data for the last 6 months:

February – April was the time period I was glossing over my budget. May (the same month I started this blog for extra accountability) to July has been on point. I’ve gone on trips, and I’ve had exceptional friend visits and with all of that, my spending is within a couple hundred dollars of each month and always within the allotted budget. And I’m spending less in general too! More than 20% less actually!

How My Budget Helped Me

  1. It helped me quantify the categories I regularly struggled with. Once I quantified these, I could come up with a realistic cut back dollar amount. I could see which categories counted the most. And I was able to cut back in the categories that counted.
  2. It helped me make micro-adjustments as the month went on. I set up my Mint so I could literally look at how I was spending every day. It took 2 minutes. I think many of us review our budgets once or twice a month, and it’s not nearly frequently enough to take action on our behavior.
  3. It gave me flexibility. I stick with zero sum budgeting, but the issue with the zero sum budget is certain months you’re under in some categories and you’re over in other categories depending on what’s going on. Mint allowed me to easily realize “Oh, I’m going over in Restaurants this month, but I’m totally under in Shopping”. That way, I can virtually move $100 from Shopping to Restaurants while still maintaining the zero sum budget perfectly.

How has your budget helped you? And do you notice what are the types of things in your life that cause you to fall off the budget wagon?

Become A Budget Master!

I’m sure it’s obvious I’m a huge Mint fangirl (if you haven’t caught on after this post or the one I wrote about 6 Reasons to Budget With Mint). I honestly couldn’t have reduced my spending the way I did without it.

In April, I finally sat down and figured out a system. I thought about what caused me to miss my budget. I figured out what were the points of friction between me and tracking my spending the way I wanted. And I figured out a system that has been working for me ever since!

Since there’s a lot to setting up the perfect budgeting system, I’ve made a free Budget Mastery email course that I’d love for you to take if you’re just a little curious about Mint (also free!) or if you’re looking to explore an alternative way to budget and track your spending!

3 Reasons Why People Fail to Follow Their Budget

  1. They don’t track all their expenses
  2. They don’t make adjustments to their budget
  3. They don’t set realistic goals for their budget

In this course, I will teach you:

  1. A foolproof system for complete expense tracking
  2. How to setup a customized budget that fits your income, bills, and spending habits
  3. An easy system for quick budget adjustments and accountability
And more...
Jing is currently a software engineer based in Oakland, CA. She left her job in New York, moved to San Francisco unemployed, and more than doubled her salary in 4 months.

12 thoughts on “How Budgeting Cut My Spending By 20% Per Month

  1. Awesome, that’s a great looking Mint graph 🙂 I have found that checking Mint regularly, even just to see what is coming through on our credit cards, keeps me more mindful and aware of our financial situation. This then translates into a better awareness overall (like when I’m driving past a coffee shop 😉 )

    1. Yeah checking frequently definitely helps! I think we all have sort of a mental tally that gets reinforced when we check vs. losing track once we stop checking!

  2. Are you saying your expenses for May through July average $2500? ! # @

    Are you including all other fixed expenses too? I guess you’re just showing your half of the equation then? I could retire if my expenses were that low!!!

    1. It’s just for one person! I’m still lucky where I really only have to account for my own expenses and not kids/spouse! My expenses feel so high, well mainly rent because I love living in HCOL places…

  3. Just the reason I started my blog (extra accountability) I kept gloss over my budget and overspent in the food/entertainment. In hindsight, my previous budget was probably not realistic because I made it so low in order to save a lot, when I made so little 😀

    1. Yeah, the extra accountability has seriously helped! When I want to make a sort of un thought out purchase, I realize I’m going to have to write my “reason” in my money diary!

  4. Hey Jing, hope life is good! Way to bring those expenses down a ton! I’ve recently noticed myself how our spending has gone up as our household income increased. I think just tracking your expenses in itself is a great way to bring down expenses. Just being aware of how much I spend on eating out has helped me when moments of temptation arise.

    Also, you mentioned you did contract work last year – was that like freelance software development?

    1. Hey Matt! I found it also helps tracking if you track per week (like average eating out) because it’s a little easier when you’re first trying to cut back if you just cut one day out or one appetizer per eat out order! I used to be someone who never ordered appetizers, but I noticed more and more I was defaulting to ordering an appetizer even if nothing really caught my eye.

      I’ve never really done freelance work, but I think contracting is a bit of the same thing. There are usually set dates of the contract and then the option to renew. It’s sort of a way the software industry gets to get full time dedicated engineers without giving any of the benefits. :/ Though I think it really works for some people. It worked for me at the time because I was under my parents insurance, so I didn’t have to pay for all those other expenses out of pocket!

  5. I definitely agree that Mint is superior when it comes to budgeting but I’m pretty partial to Personal Capital when it comes to investments. So I have accounts with both at this point to play around with 🙂

    1. I still need to figure out a good system for Personal Capital. I agree it’s WAY better for investments. My investment portfolio is pretty simple, so it doesn’t require a ton of maintenance.

  6. You’ve almost convinced me to review our spending for at least the last month 😉 Just wondering though with the programs, is there any clause in your bank accounts terms and conditions that say if you link the account to a third party that this may compromise security? I’ve heard it somewhere and I don’t know if it’s a) true, b) anything to be concerned about.

  7. We love our budget. We use an Excel spreadsheet and it has aided in being able to pay for our wedding, payoff debt, and even proved to us that we could afford for me to work less. When we were saving for our wedding we used Mint to track our savings goal. It was pretty neat to see. Now we use Personal Capital to track our investments.

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