The Two Ways You Can Squeeze Your Budget

Two ways you can squeeze your budget

There are two ways to squeeze your budget.

With either one, you need to start out with the very basics. You need to know how much money you bring in every month. But from there, the differences couldn’t be more pronounced.

You can squeeze more into your budget.

Once you know how much money you have coming in every month, you’re off to the races. If that’s your total, then all you have to do is make sure every purchase, payment, savings contribution and impulse buy will fit into that number.

Sure, the end of the month might be tight, but right around the corner is a fresh new month with a fresh new infusion of cash to see you through.

This is the approach that leads to conversations that boil down the decision to buy a used car or lease a BMW to the size of your monthly payment.

If the BMW monthly payment is only $100 more than the payment on that used Toyota, then why not squeeze that extra $100 into the budget? You’ll be much happier driving that BMW anyways – never mind that your payments will last for three additional years.

It’s the approach that turns conversations about how much house you should buy into conversations about the size of your monthly mortgage payment, and the one that leads you to stretch just a little bit further beyond what you thought was your budget.

In the grand scheme of things, what’s the real difference between a $1600 a month payment, and a $1750 a month payment, if it means you can get the house you fell in love with? It’s only $150, and you can probably squeeze that into the budget, no problem.

It’s also the approach that can so clearly explain where newspapers and magazines can find double income couples who bring in six-figure incomes and feel like they’re the working poor. This approach – squeezing more into your budget every month – is the perfect recipe for lifestyle inflation, because every time your income jumps, you’ve now got room to expand.

To stretch out.

To move a little bit closer to that elusive dream of feeling like you have enough.

It’s also an approach I know well, because I lived it. For years.

When I started my career, this is how I framed every budget decision. Could I make it work? Could I squeeze it in? Some things, like a gym membership, got the A-OK and were shoehorned into a tight monthly budget. Others, like car payments and insurance, just wouldn’t fit, no matter how hard I squeezed, so they weren’t added.

But man was it stressful.

Even living within my monthly total and not going into debt, I spent all month, every month in a mindset of total deprivation. All I thought about was what else I could add, if only I had a little more room for squeezing things into my budget. I was so hyper-aware of how tightly I had stretched my budget, that unexpected extra expenses sent me into tiny panic attacks.

And then I discovered the second way.

You can squeeze more out of your budget.

And no, I don’t even mean getting rid of money you’re spending on recurring expenses or anything quite so tactical. This approach isn’t about the budget-Tetris of making sure you’ve got everything balanced juuuuust right to make it through the month.

Instead, it’s about focusing on what your money gets you.

About focusing how your money can get you the most of what matters to you.

When you’re focused on squeezing more out of your budget, you don’t start with your monthly income figure.

Instead, you start with your goals and what you want your life to look like. Sure, your monthly income matters – spending more than that will get you in trouble if you keep it up month after month. But beyond that, you’re free to focus on what really matters to you, and ruthlessly cut back on spending that doesn’t align with those goals.

When you’re focused on squeezing more out of your budget, you’re not optimizing for money spent, you’re optimizing for the more important things. Things like laughter, and love, and friendship, and health, and family. You’re focused on the things that really matter to you, whatever they are.

This is the kind of approach that sees people taking radical steps like a two-year shopping ban, or living in a camper van, or wearing the same thing to work every day, because spending on shopping, or a house, or a varied work wardrobe doesn’t bring them joy or get them closer to their goals. These steps, as radical as they can seem when you’ve never looked at them any other way, actually free up heaps of money to do the things that really matter, whatever those are for you.

Yes, I said heaps of money.

While this approach isn’t about cutting expenses, it’s also the absolute most pleasant way to drastically cut down your spending that I’ve ever found. If you look at your monthly budget, and really ask yourself which items bring you joy, I bet there are several pretty big ones that you can identify right off the bat that don’t fit the bill. (Ahem, like my recent decision to opt for a cheap cell phone plan.)

As I’ve gotten used to this approach, even as I aim to save for multiple big goals at the same time, the way I feel about money has changed dramatically. An invitation to a nice dinner out to celebrate a family birthday – that once upon a time would have been one of those unexpected expenses that sent me into a tailspin – is now a joyous opportunity to spend time with people I love, and I don’t even think twice about it.

This kind of free-spirited, low-stress approach to spending would have been absolutely inconceivable to my previous self, as focused as I was on squeezing things into my budget.

Things feel much more spacious on this side of the fence.

So if I could offer just one way to change the way you look at your money, it’s this.

Stop trying to squeeze more into your monthly budget. It’s a recipe for stress and fear and head-burying-in-the-sand when unexpected expenses come up. No one ever had a good time living on a razor’s edge.

Start trying to squeeze more out of your budget. More love, and laughter, and happiness, in whatever shape that takes for you – and be ruthless about cutting out expenses that don’t make you happy.

Desirae is on a mission to demystify and un-boring financial info for millennials, so that we can all save more money, spend on stuff that matters to us, and still have a latte or two along the way. Money is literally why we can have nice things, and Desirae is committed to helping make sure you know just enough to make the right calls for you. (She’s also committed to her expensive dog, her side hustle, and her retirement fund.)

26 Comments on “The Two Ways You Can Squeeze Your Budget”

    1. Des

      I love that! And not only because I’m totally biased and oranges are my favourite fruit. (Literally, almost half of my Christmas-season excitement is that oranges are in season.)

  1. Sarah Noelle @ The Yachtless

    This is great! It’s a paradigm shift in how to think about money, basically. I’ve only recently started to become aware of my finances — up until about a year ago I was totally in the how-much-can-I-squeeze-into-my-budget boat. Looking back, that now seems like total insanity.
    Thanks for posting 🙂

    1. Des

      I’m on basically the exact same timeline, so I’m super happy we connected! It was literally last February that I had my wakeup moment of “…Oh. Maybe I should be better at this.” Luckily, I got my dog *before* switching mindsets about my budget, haha – he’s the one budget-squeeze I’ll always prioritize, but looking back on it, mannnn did he have a lot of startup costs.

      PS. I love your blog!

      1. Sarah Noelle @ The Yachtless

        Aw thanks! And it’s great to meet you! 🙂 Yup, we are on almost exactly the same timeline — I started tracking my spending on January 1st, 2015.
        And I totally hear you about your dog. I don’t have one (because I can’t in my current apartment), but it definitely seems like a worthwhile exception to a frugal mindset. After all, as they say, money is about choices. I bet you’re already familiar with the Frugalwoods blog, but if not, you should check it out — they have a super cute dog too and post a lot about dog expenses.

        1. Des

          I *love* the way they write about their dog! I keep trying to but it devolves into me getting really emotional about how great my dog is and forgetting to talk about money, haha. Someday, with a lot of editing, I’ll get there!

  2. Maggie @ Northern Expenditure

    I love this take on budgeting. Squeezing more into your budget is a fabulous way to put it. I think we do that without realizing it. It’s a phenomenon we don’t equate with lifestyle inflation, but it is. But a little squeezing into the budget here and there won’t hurt. But, as you say, it ends up being so stressful! Now that you’ve given it a name, it will be easier to identify and avoid!

    1. Des

      Thanks Maggie! It’s suuuuch an easy trap to fall into, especially when things come along and increase your income. I’ve loved reading about the income supplements you guys get for living in Alaska and I so admire your dedication to putting that extra money towards your goals in a thoughtful way!

    1. Des

      Thanks for the comment – this post was a little off the beaten track from what I usually write so I’m happy it resonated with people!

  3. Vic @ Dad is Cheap

    Love this!

    That’s exactly how I approach budgeting. It’s about focusing on what you really want in life – and your money adjusts to that. You realize other stuff you used to spend on isn’t worth it.

    Great post!

    1. Des

      Thanks Vic! I couldn’t agree more – since I’ve been tracking my spending, I am baffled when I go back and look at old monthly statements. For one, I can’t remember a single thing I bought, and secondly, I can’t believe I spent almost double what I’m spending now in an average month – with no remarkable gain or loss in happiness!

  4. Kurt

    Love the priorities you’ve set for spending money, and the relaxed approach to spending on stuff that fits with your priorities–love, laughter, happiness. I doubt anyone, late in life, wishes they’d spent less on experiences that made them happiest.

    1. Des

      Thank you so much Kurt – and thanks for the Twitter share, I’m glad we connected! I totally agree – whenever you read those articles about what people wish they had done more of, it’s always spending time with friends and family. I’m happy to keep those types of expenses in my budget at the expense of a few more boxes of Amazon-delivered books!

  5. Dan

    I enjoyed this article. There are always ways to squeeze more out of your existing budget but the only way to optimize this process is to have a plan. Whether you use a spreadsheet or a tool like OnTrajectory, you have to get everything out if front of you so you can make smarter decisions. Once you do that, then sticking to your optimized budget becomes critical.

    1. Des

      Thanks Dan! Honestly, I’ve never heard of OnTrajectory, but I’m going to check it out now – thank you for the recommendation and for taking the time to leave a comment, I appreciate it!

        1. Des

          Honestly, I am the worst and forgot until today, BUT I did just sign up and it looks pretty cool! I’m going to play around with a few more of the features this evening – thanks for the reminder Dan!

          1. Dan

            I appreciate the feedback Des. I would love to stay connected with you and hear your continued feedback about ontrajectory. There may even be some things that we can offer you and your readers . Let me know if there is a way that we can keep in touch. There is a really smart team behind this tool and we truly feel that this tool can make a difference in peoples financial lives. It has helped me tremendously. Feedback from informed authors such as yourself is extremely helpful and highly valued. I hope that your day is going well. Let’s keep in touch. 🙂

    1. Des

      Hey Andrew – thanks for taking the time to comment, and yay connecting with like-minded bloggers! You’re absolutely right, I LOVE your post, and it really does seem like we’ve taken a very similar path to getting here, haha. I just subscribed to your posts – looking forward to following along!

  6. Ryan

    Good points and nicely put!
    I like the positive view on cutting expense and not being paranoid about going over-budget. I personally never had a set budget and yet I’ve been able to save more than half my income for years. I simply buy only the things I really need or things that would really make me (and people I care about ) happy. As it turns out, a happy and rich life doesn’t cost that much!
    Thanks for the post!

  7. Lindsey P.

    Currently going through this process (again)! Examining my expenses and trimming down where possible. Looking at going to Freedom Mobile to cut my cell bill in half, got cheaper Internet, and even shopping for a cheaper parking spot for my car.
    These savings add up…$50 extra a month here and there allows me to funnel more cash into my long-term savings and my more short-term “adventure” fund. Priorities!

Leave a Reply

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