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I am by no means perfect at budgeting.  If Suze Orman shadowed me for a day she would probably say, “GuurrRLFRIEND!  You’re spending that kind of money on a CUP of COFfee?  Arrrrh you kidding me!? Make it at HOME!”  But if you’re just trying to be better at sticking to a budget, I may be able to help.

You already know I love spreadsheets.  I used to have a spreadsheet for my budget.  Color coded by category.  And I was pretty good at tracking where my money went, exactly to the penny.  But it didn’t keep me from SPENDING the money in the first place.  If you want a copy of that spreadsheet let me know, but save some time and think about it BEFORE you spend it, not after.  Let’s call it “Mindful Spending.”

I started this a few months ago and it seems to be working, so I thought I’d share.

My Three Cards

I have 3 cards that I use 95% of the time.

#1 Discretionary Card

This is the card that would include restaurants, shopping, home decor, etc.  Anything that is not food, toilet paper, gas, utilities, basic clothing for the kids, medicine … you get the drift.  I use my Visa for this because when I accumulate points it is a credit on Amazon, which I can use for a “freebie” discretionary purchase someday.  Why-yes-I-would-like-another-new-cookbook-thank-you-very-much.  I pay off this card every month in full (must say this so Suze doesn’t track me down).

Mother daughter pedicures – Discretionary

Before you reach for this card, ask yourself a few questions.  Is it really important to me?  What’s the next best option, and how expensive would that be?  Could I wait and buy it later?  How much room in my discretionary budget do I have this month?

For example, if you’re on an airplane and are debating splurging on wi-fi … ask yourself what you’ll be doing online and if it in any way is something you won’t be able to do when you get home … did you forget to buy a birthday present for someone and you have to do it by midnight to avoid embarrassment?  (e.g. Urgent) Are you swamped at work so you really need a few minutes to catch up on personal email or paying bills?  (e.g. Important for sanity) Maybe this is a time to splurge. But if you are just bored and/or dissatisfied with the options in SkyMall (which is understandable, the number of cool gadgets has decreased dramatically in favor of pet staircases and yard fountains), maybe having to reach for the precious “discretionary” Visa will make you think twice.  Maybe you could do some offline work, or you have a book you could read.  I like to make shopping or to-do lists on airplanes when I am not traveling with kids … if I am traveling with the kids, the last thing on my mind is a wi-fi connection … booze maybe, but not wi-fi.

#2 Non-discretionary Card

Red wine counts as non-discretionary, right? It’s part of the Mediterranean diet?

This is the card that gets pulled out at the grocery, Target*, Costco*, the drugstore, the doctors’ office, and the gas station.  Not a free pass to spend whatever (you still have a grocery budget) but this is not fun money.  Pay off this card every month (again, I’m slightly scared of what Suze would do if I didn’t say that a bazillion times).

#3  My “Coffee” Card



Cue Suze:  GirrrrrlFREND!  You’re peeing your money away on COFFEE! Make it at home!  

Sorry, Suze.  I am saving for retirement like a good girl, and I haven’t bought a soda at lunch in years.  And since having kids, my clothes are all from Kohl’s and/or “vintage” The Limited circa 2004 … so I get this one little thing.  Half hazelnut half decaf with cream, please.  Except on weekends, in which case home coffee is actually easier.

Card #3 is a gift card I either ask for as gifts (I got like 3 months’ worth at Christmas) or buy myself.  When the money runs out for the month, so does the coffee.  And then I have to drink burned-tasting jet fuel slash office coffee.

Whatever your daily splurge is, buy yourself a gift card once a month, and when it runs out, you stop.  This may make you ration your spending.  Downsize the cup or switch from a triple-sow-cow-skinny-extra-pump-latte (that’s a drink, right?) to a standard drip brew.  Or don’t change your order, but just go less frequently.

That’s it.  You know why it works?  The mere thought of deciding WHERE something fits in the budget (by literally having to decide which card to put it on) makes me think twice about spending the money.

Mindful Spending 101

The beauty of the Mindful Spending philosophy is that it works for any budget.  Whatever your category totals are, everyone has both discretionary and non-discretionary expenses.  If you are in financial distress, you should simply not ever reach for that discretionary card.

Mindful Spending

*Special Situations

There’s always fine print when it comes to money stuff.  Here is more detail on how to deal with potential pitfalls.

Special Situation #1 – Target.  Oh that glorious store with the bullseye.  You will go in for toilet paper and leave with $150 worth of stuff.  Guaranteed.  Here’s how I handle that.  I simply AVOID GOING.  You heard me.  Feet in the store or eyes on the website equals money spent (at least for non-perfect people).  I set as many sundries to arrive on autoship from (diapers, Burts Bees) or (like my Method hand soap refills) or as possible.  Going to Target is a quarterly event for me.  I go for cat litter which is apparently too heavy for to ship cheaply.  And since I’m there … well of course I browse the toys and games and DVDs.  I chassé through the clothing and baby sections.  I get things I don’t really need but can always justify in the tupperware and foil and cleaning supplies. And I always spend $150 on that trip.  It’s really not that hard.  So here’s the (slightly annoying) solution to this.  Two transactions.  Hold yourself accountable.  Put the cat litter and toilet bowl cleaner on the Discover card and the other $138 worth of stuff on the Visa.  Ignore the annoyed stares from the lady behind you muttering under her breath.  And if she really carries on, dig through your purse as if you’re looking for some coupons … that might make her decide to switch lanes.  

Special Situation #2 – Costco.  See Target above.  My only defense against this store is to go over my lunch hour with a list so that 1) I absolutely have to get in and get out in an hour round trip and 2) I know anything cold I buy has to get lugged up to the office fridge for the rest of the day.  Plus, they only accept AmEx or debit cards, so my system doesn’t work. Just save your receipt and add it up by discretionary (10 lb. bag of chocolate covered pretzels) vs. non-discretionary (the wipes I went for in the first place).

Special Situation #3 –  See Target and Costco above.  Only add the danger of being able to go in pajamas after the kids are in bed and have it delivered to your door in roughly 48 hours.  I go to Amazon to look for hand soap and before I know it I have about 15 brown boxes on my doorstep.  And the UPS driver definitely greets me by name.  Repeat after me – Set necessities to autoship.  

POINTS POINTS POINTS!!  The reason I don’t do a “cash” basis/money in envelopes or use my debit card is points.  I simply can’t stand to leave that money on the table. I strategize which cards give me best offers.  Amazon’s Visa was a no brainer because I shop so much there (see #3 above), so the points rack up fast.  Discover I like because there is no annual limit on cash back, and they run promotions like 5% back on gas or travel or home improvement (depending on the month).  I feel like I have some sort of Ponzii scheme going when I accumulate enough Discover points from buying my monthly Panera gift cards to earn my free Panera gift card. Ok, I’m exaggerating I don’t spend that much on coffee at Panera … but you know what I mean. Something for nothing is nice (sorry Suze, I know you don’t like credit cards).

Autopay.  Your credit cards should be set to autopay in full on their due date, so you don’t leave any of that up to chance (or in my case, are too lazy to have to remember to go log in and do it).  I’m just going to say it one more time.  Credit Cards Are Handy and They Give You Points but Thou Shalt Not Carry a Balance.

The Reward

At the end of the month you can easily determine the spend on discretionary vs. non-discretionary categories without any complicated spreadsheets to see where your money went.

Plus, guilt free coffee.  That’s right, you heard me … zero guilt.


Now, if you need help setting the budget in the first place?  Stay tuned, that’s another post.

Happy shopping (occasionally),

Laura Sig

Are you in a Mindful kinda mood?  Check out Mindful Label Reading.

22 Comments on Mindful Spending (aka Sticking to a Budget)

  1. Great post! I especially like the part about not even going to Target. I actually started getting my diapers from the CVS near our house (get good deals by using their rewards card) but mainly because I figured even if they were a buck or two more than they are at Target, it was better than the extra $100 I would end up spending.

    • Thank you! Yes, I definitely support the CVS diaper strategy – it is not worth saving (maybe) $2 if you’re going to be tempted in other areas. Diapers I autoship on I LOVE their private label diapers in terms of fit and quality (I go through them soooo fast I almost have to have them arriving weekly). ~L

  2. Great post! I also use a credit card for the points, and it helps me track where I spend my money. I pay it off every month, so it works better than cash for me. (Sorry, Suze!)

    Three cards might be enough for you, but you may want to also consider the Target red card for your trips to Target. You get 5 percent off every purchase at Target when you use the card, and you can designate an additional 1 percent to go to the school of your choice. I don’t typically sign up for store credit cards, but at Target you can make it a debit card so it doesn’t add to your list of credit cards.

  3. Love this post Laura! I’ve been needing new ideas on how to budget (with little extra effort) since the twins have arrived. There are some great ideas here and I love how you incorporate your “splurge!”

    Have been enjoying the new blog!

  4. Great post! I, too, have to simply avoid going to stores / websites in order to not spend money. When I do, though, I am not afraid to do separate transactions. It’s totally worth the looks and deep breaths. Work, Home, Me, separated by a little piece of plastic on the belt. It’s so much easier to track at the end of the day (or month, whenever I get around to updating my books)!

  5. I love the idea of a “coffee” card. Mine would have to be a “juice” or “mani-pedi” card though. It is like an extra special treat every month where the money is already put aside. Love it.

  6. I agree with everything you wrote, except using credit cards. I don’t buy into the points thing. Truth is, for me, when I use my debit card it is more painful because the money comes out of my account immediately and, as a result, I spend less (Dave Ramsey just winked at me).

    The magic is all in the budget, which is really a pain for the first few months but gets easier.

    PS – I didn’t realize we were dark chocolate buddies!

    • For sure – dark chocolate almonds are my nightly treat!

      Thanks for reading! I see your point about the pain of spending – if it weren’t painful for you to swipe a credit card I’d absolutely not recommend using one. But for me, having set everything to autopay automatically, it’s equally as painful whether I know the money is coming from the bank instantly or sometime in the next few weeks. I think the points really are important when I’m buying big ticket items (business travel, Kellogg tuition) where 1% is really noticeable. Plus, having had someone attempt to withdraw money from my checking account (with fake ID), and knowing the bank uses an ATM card with an accurate # on it as a form of identification (the only reason this particular fake me didn’t get $5,000), I don’t like to use my debit card very often. Call me paranoid.

      I would love to see what template you guys started with to make your budget. There are so many out there and I want to find the best to share with people.

  7. Great advice! I recently have become debt free and I so badly want to remain debt free. This is a great place to start. Thank you.

    • I am so glad you enjoyed it, Kelly. I had fun writing it. I think that making it as easy as possible for yourself is half the battle – you have to set up habits that make it a part of your everyday thought process. Congrats on becoming debt free!

5Pingbacks & Trackbacks on Mindful Spending (aka Sticking to a Budget)

  1. […] Hold Yourself Accountable.  Part of why the Spending Strike is so effective is that you had a goal, a label on what you were doing, and people you were sharing the experience with.   Put your budget in a visible place.  Reward yourself when you stick to a list at a store.  The best way for me to hold myself accountable is using a 3-card system (sort of like the cash envelope system but you get points).  You can read all the details about it here, Mindful Spending. […]

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