You want to save for the future, or even retire early. But you also want to enjoy the present. How to find financial balance between spending and saving.

If you spend enough time reading blogs about money, you’ll eventually come across the likes of Peter Adeney, a.k.a Mr. Money Mustache (and other early retirement gurus) who espouse extreme frugality as both a righteous lifestyle and a path to achieving financial freedom at a very early age.

Mr. Adeney tells the story of “retiring” at the ripe old age of 30 after saving approximately 75% of his income for several years. Of course, take the word retired with a grain of salt: A recent profile in The New Yorker revealed Adeney’s successful blog is now bolstering his “Money Mustache” to the tune of $400,000 a year. (Not that he’s going to spend it.)

While Adeney’s theology of thrift is captivating, you might agree that living on a quarter of your income or retiring in your 30s is not realistic for everybody.

Early retirement is not the only goal

Reading Adeney’s blog can be as anxiety-provoking as it is inspiring.

Mr. Money Mustache will likely motivate you to drive less and to think twice about a big purchase. That’s good! But then, you might start wondering:

  • “How can it be that I spend twice what this guy does, and I still feel poor?”
  • “I enjoy my car/audiophile speakers/nice shoes/[insert your guilty consumer pleasure here]. Is that such a sin?”
  • “I’m still paying student loans and won’t be able to retire anytime soon. Have I done everything wrong?”

Here’s the thing: If Adeney’s choices were not somewhat spectacular — that is, unusual and difficult to achieve — they wouldn’t be attracting so much attention.

If your one and only goal is to retire as quickly as possible, joining the Cult of The Mustachians makes sense.

But to me, that’s extreme. That’s not living a balanced financial life.

You shouldn’t feel guilty about buying Starbucks coffee sometimes. You might have to balance saving with paying down debt. You know better than to keep up with The Joneses, but you don’t have to keep up with The Mustachians, either.

It’s normal to want to copy

It’s human nature to want to fit in and feel compelled to mimic others. Dr. Alain Samson wrote a piece on Psychology Today called Copy That where he describes the human behavior of copying others. One quote that stood out to me:

“Copying others, more broadly, can range from non-conscious processes whereby perception (seeing others engage in a certain behavior) becomes directly linked to our own behavior, to conscious strategies, where we choose to imitate either because we’re uncertain about the best course of action or because we want to fit in.”

Now think about money. It’s a pretty touchy subject, right? How often do you know exactly what to do with your money? And how often do you want to fit in with others’ financial lives?

Not only is it normal to want to be like people you observe (or read about online), but with a topic like money, it’s expected. Nobody wants to be in debt. Everyone wants to be rich and not have to work. It’s normal.

It’s not normal to be someone you’re not

While it’s normal to want to copy others, especially those who have been successful, it’s not normal to not be you. You should be pushing yourself out of your comfort zone often, and attempting to live as frugally as you can. Just don’t take it to extremes. The moment you become someone you’re not, you’re setting yourself up for failure.

What happens when a 300-pound person wants to lose 200 pounds and decides to go on a crash diet? Are they typically successful? No, crash diets don’t work. It’s because they’re taking an extreme route and becoming someone they aren’t. Instead, if they slowly made changes to their lifestyle, they’d be more apt to lose the weight over time.

These kind of major life turnarounds don’t happen overnight. Be patient.

Now that we’ve cleared that up, let’s look at some ways you can start to live a more balanced financial life.

1. Automate your finances

Jim Wang, the blogger behind Wallet Hacks and an entrepreneur who sold his previous blog for $3 million, says the one financial habit we should all adopt is automating our finances. It’s also the primary concept behind the wildly popular book, The Automatic Millionaire. The fewer decisions we force ourselves to make, the more successful we’ll be. We’re avoiding what’s called decision fatigue.

  • Action item: Take 30 minutes today to go through your finances and set up auto payments on everything. You can adjust the amounts later if you’d like, but just get everything automated. If you haven’t set up direct deposit with your employer, do that immediately. Finally, set up a dollar amount (any dollar amount) to be automatically transferred to a savings account of your choice.

2. Give yourself a “guilt-free spending” allowance

Ramit Sethi, author of the book and blog I Will Teach You To Be Rich, discusses the concept of guilt-free spending in his book. As part of a conscious spending plan, you include a guilt-free spending piece in your budget. This could be any dollar amount, but if you want to live frugally, keep it low and reasonable. For example, you might give yourself $10-20 per week to spend on anything you want. What this does is take any guilt away for buying things that may not be smart purchases.

I’ve actually tried this, and it works. I have done a few different denominations, but $20 seems to work best for me. All my fixed costs come out of my checking as they normally would, but I give myself $20 each week to use on anything I want. This could be coffee, video games, or anything else that I probably don’t need. The dollar amount is small enough that it won’t crush my budget and the impact is huge. I can buy something I want without feeling guilt.

It’s the same concept that Weight Watchers takes with their weight loss program. You can lose weight and still eat what you want, but you have to keep it in moderation. So only one candy bar per week. This is the same thing. I’m not saying go out and withdraw $300 to blow on anything you want every week—that’s just stupid. But keep it balanced, keep it in moderation… then you’ll be fine.

  • Action item: Give yourself a “guilt-free spending” allowance of at least $10 per week for a month, and see how it goes. Use the money on whatever you want.

3. Consider using cash

Wait… what is cash? Yeah that’s right. Those little green slips of paper are still around, and they work! There are tons of benefits to using cash, but the thing I love most is that it’s finite. Once it’s gone, it’s gone.

We spend more with plastic — credit, debit and gift cards — than with cash, according to a 2008 study in the Journal of Experimental Psychology.

So if you use cash for groceries and only want to spend $100 — only take $100 to the grocery store, in cash. If you want to give yourself $20 per week on guilt-free spending, take it out as cash. When you’ve used that allowance, you physically have no more money to spend.

The other thing I love about cash is that it’s visual. You can visually see how much you’re spending. With credit or debit, you have to wait until you log into your account online to see your balance.

We realize that using cash for everything is growing increasingly less practical. There are also significant advantages to using credit cards for some purchases, such as rewards and easy itemization. But using cash for certain shopping trips — or as a short term experiment — might help you reign in spending more than you realize.

  • Action item: Try switching to cash for a month in a few of your budget categories, like groceries, guilt-free spending, or gas. It might be more of a hassle at first, but in the end you should be saving money.

4. Budget, at least for a while

If you want to lose weight, tracking your nutrition and counting calories is a proven strategy. If you want to save money, religiously sticking to a budget is the best way to go.

I know, it’s not fun. But it doesn’t have to be complicated. You Need A Budget is a great resource for creating a user-friendly budget that you can stick to. It categorizes all your purchases and even allows you to set goals for yourself. If you’re having a tough time living below your means, give something like YNAB a try to see if it will help you stick to your money goals. You can also check out more recommended budgeting apps or even give Money Under 30’s free budgeting spreadsheet a try.

  • Action item: Create a formal budget. It doesn’t have to be with YNAB, but they do offer a 34 day free trial to test it out. If that’s not your thing, check out our article “The Last Budget You’ll Ever Need” to learn how to create a very simple one.

5. Got debt? Don’t freak out: Use the 50/50 method

One problem with debt is that it can seem so completely overwhelming. So we ignore it or just make minimum payments.

Debt is like a messy house. When my entire house is messy, I’m not motivated to clean it; it’s too overwhelming. But if I force myself to do something small — like clean one bathroom — I can have the whole house spotless in a few days.

It’s the same thing with debt.

I’ve had lots of success with the 50/50 method.

  • First, you pick one debt to attack, and attack hard. This is like the snowball method that Dave Ramsey made famous.
  • Second, you apply a 50/50 rule to your leftover money each month. Meaning, 50% of that money goes to savings, 50% goes to debt. It’s completely balanced, and you’re able to pay off debt while you save.

There’s no sense in making yourself crazy trying to do only one or the other. If you have no leftover money at the end of the month, that’s another thing. Go back to point number four and consider making a budget so you can force yourself to live below your means.


Let’s face it, it would be fantastic to retire at 30 or 35 or 40 like Mr. Money Mustache and some others. But unless you come into a multi-million-dollar windfall, retiring that early requires living an extreme lifestyle. On the other end of the spectrum, there are folks who make $500,000 per year and are always broke because they spend every dime!

The goal is balance.

It’s okay to mess up and spend more than you expected one month. Just try again the next month. We’re human, we’ll make mistakes. Just learn from them.

The key to balance?

  1. Automate your finances
  2. Give yourself a guilt-free allowance
  3. Use cash whenever you want to set a hard limit on your spending
  4. Know your budget (even if you don’t track it every month)
  5. Work on your debt slowly and steadily

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About the author

Chris Muller picture
Total Articles: 281
Chris has an MBA with a focus in advanced investments and has been writing about all things personal finance since 2015. He’s also built and run a digital marketing agency, focusing on content marketing, copywriting, and SEO, since 2016. You can connect with Chris on Twitter.