Making the move from spender to saver

Opal Creek PoolI pulled out my camera gear last night. It's been two years since I used it regularly. Before I started Get Rich Slowly, I seriously considered trying to become a professional photographer. But for a long time now, my camera stuff has been gathering dust in the corner of my office. I can't even remember the last time I used it.

It's fun to look at all my equipment again. It's fun to handle it, to imagine the possibilities. I'm eager to get outside and make some images. (Kris and I are going to a garden show this afternoon, and I'm taking the camera with me.)

As I sorted through my bodies and lenses, though, I had to shake my head. I bought a lot of the gear on credit. For a time, I had the photo bug, and in a bad, bad way. I craved new lenses and bigger memory cards and fancy filters. I wanted to take expensive photography courses. There was always something bigger and better to buy.

When I was in debt, when I was living paycheck-to-paycheck, it was always like this. I knew I should save or pay down debt, but I spent my money on comic books and camera gear. I spent it on books and bikes. I got a perverse thrill from spending money I knew I could not afford to spend. In some ways it made me sick — I felt guilty, it gnawed at my gut — but in others, it gave me a sense of exhilaration. If I had cash in my bank account, I spent it.

But now that I'm out of debt, now that I'm building my savings, I find I've lost the urge to spend. Now I could actually afford to buy a better bicycle. I could afford that wide angle lens that I used to covet. I could afford to buy all the comic books that once seemed out of my reach. I could afford all of these things and more, but I'd rather save my money.

Somewhere along the way — perhaps the moment I got out of debt — my mindset moved from spender to saver. I once viewed money as something to spend — now I see it as something to save. I still indulge myself now and then — I just picked up Mario Kart Wii, for example — but the urge to spend all of my money is gone. It's vanished. It doesn't give me a thrill anymore.

It wasn't easy for me to switch from spender to saver. If you're trying to make a similar transition, consider the following techniques:

  • Open an account at ING Direct (or another high-yield savings account), and make regular contributions to it. When you develop the saving habit, it becomes second nature.
  • Set a medium-term savings goal. Some goals, such as retirement, are too far away to get excited about. Short-term goals aren't enough to build the savings habit. But consider saving for a trip to London or Hawaii next year. Or saving for a new car. I've found that saving for goals 18 months to five years in the future has been a great way for me to get excited about saving.
  • When you receive a windfall (such as the upcoming tax rebate), don't think about how to spend it. Think about how to save it. Windfalls used to be fun money for me — now I view them as a way to jump-start my savings.
  • Avoid situations that lead you to spend. One of the best ways to move from spender to saver is to remove yourself from temptation. Since I've stopped going to the comic book store so often, I buy fewer comics. One reason I haven't bought any new camera equipment is that I haven't looked to see what's available. Sometimes where spending is concerned, ignorance really is bliss.
  • Consider alternatives to buying new stuff. If I find myself in a mood where I have to shop, I make a trip to Goodwill. For $20, I can fill a basket of books and clothes, and I don't feel guilty. Better yet, take time to go through the things you already own.
  • Don't spend your time looking for ways to spend your money. Instead, spend your time finding ways to save and invest it. Over the past few months, I've learned there are all sorts of things I'd rather do with my money than spend it. I want to max out my Roth IRA. I want to learn about rental properties. What about re-investing some of my cash into Get Rich Slowly?

I haven't shaken the urge to spend completely. After playing with my camera equipment last night, I was curious what sorts of new gear was available. I spent twenty minutes on Amazon, drooling over the Nikon D300. I'm tempted — but not much. I'd rather save that $1,800 for the future. I'm a saver now, not a spender.

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Finally Frugal
Finally Frugal
12 years ago

Spending habits are just that: Habits. Once we start (sometimes painfully) developing a new way of thinking about money, it becomes easier and easier to save rather than spend. It actually feels good! I, too, have been a spender in the past—it felt so good, so satisfying to buy stuff I wanted, even when I used my credit card and had no idea how I was going to pay it back (in fact, the thought rarely entered my mind when I was standing in front of the cash register). Now that I have a bit of savings, and I’m planning… Read more »

Moneyblogga
Moneyblogga
12 years ago

Another element to consider when moving from a spender to a saver is age. Most of us just (finally) grow up and realize that stuff is just that. It may take some people longer than others to grow up but it does happen. I know it took me a LONG time to grow up and I’m glad it didn’t take longer! Like you, I have thankfully just lost the urge to keep spending on things I really don’t need.

Roman
Roman
12 years ago

Its all about setting yourself free the first time. Once you are debt-free you will try to keep things that way. Saving is better then spending anyway, its worth more later then today.

Bill
Bill
12 years ago

Mario Kart Wii is awesome. It’s also a great game to play with others. Amazon has extra Wii wheels for $10. Stay in on a night save some $$ and have some fun.

Armed Forces Advantage
Armed Forces Advantage
12 years ago

Thanks so much for this post. I’m still struggling with the transition from spender to saver. We’ve opened an ING account, now shop almost exclusively at thrift stores (I find Goodwill and Salvation Army to be pricier than others), and got completely out of debt thanks to your site and Dave Ramsey books we checked out from the library. Here’s the rub, I often want to go out and buy some stuff just because I can do it without debt. It seems harder to save without that goal of removing debt. I’m doing it but its harder. Thanks for the… Read more »

Ann
Ann
12 years ago

I’m really enjoying your website. And I completely understand the temptation of a big, unplanned paycheck like a tax rebate — or in my past, a work bonus or award money. I’m still “paying my dues” in my field, i.e. don’t make very much and can really only buy the neccessities every month. So I’ve thought a lot about what to do with these without feeling deprived. And it could help others in the “transition” to saver. First, I pay off any lingering bills (although I rarely have credit debt). Then I put half in a high-yield savings account. Whatever… Read more »

Mark
Mark
12 years ago

Although I’m still in debt I am making that shift myself, although my weakness is not camera equipment but outdoor gear for camping and climbing.

The REI Anniversary sale is starting and I looked through the catalog when it arrived (stupid, I know). I was tempted for about 30 minutes to buy that GPS package that I’ve wanted (and is 30% off!), but realized that my goal of being debt free by October is more important to me.

Chance
Chance
12 years ago

For me, the shift from spender to saver really kicked in once I made a monthly budget that included a monthly (and yearly) savings target. Trying to exceed my monthly savings goal and yearly projections has become my new “perverse thrill”!

steve g
steve g
12 years ago

I also have the photo bug. I spend a lot, but I don’t feel bad about it. Its one of my few indulgences and I usually spend wisely. Here’s my $.02 on making photographic purchases: – Most of us don’t need more than 8 Megapixels. I know pros who still use 6. – Think about what you will shoot and then what cameras meet that need. If you shoot landscapes, don’t spend extra on a camera that shoots 6 frames per second. The latest model may not be what you need. – Consider better lenses and lesser cameras. In a… Read more »

moneygardener
moneygardener
12 years ago

Great post, and so true…well put.

Colleen in MA
Colleen in MA
12 years ago

Thank you for this post, JD. It is right on the money (so to speak)! I can relate to what you were saying about looking at your camera equipment and “imagining the possibilities.” I think that’s why I used to overspend too – thinking about all the shininess and fun and bling. But now that I have a savings account, I look at THAT and “imagine the possibilities.” A slight shift in perspective for sure, but so much healthier!

brief
brief
12 years ago

I hear ya, JD! When I was first learning to get a better handle on my finances, I used to get excited about all the stuff I’d be able to buy with the money I was saving. It was a big motivator for sure. Then sometime after I got used to a more modest lifestyle, my income rose sharply – and instead of going on a spree, I discovered that I didn’t really want anything. I guess frugality has taught me to be more objective about my wants and needs. (Besides, money in the bank is so much more useful… Read more »

Eden
Eden
12 years ago

This post is wonderful! I’m currently making that shift myself. My boyfriend and I had this conversation recently, and I realized that he sees having money as a goal in itself, but until now, money had to be spent on something to have value for me. Now that I’m aware of that weakness, I can fight the spending urge. I’ve had an ING Direct savings account for a while, but now I’m making regular deposits. Every morning I check my account, and marvel at how much more interest I’ve made just in one day! Sure it’s pennies now, but now… Read more »

David
David
12 years ago

The photo is fantastic. One of yours?

Kristi Wachter
Kristi Wachter
12 years ago
$1800? That’s, what, 6% of a Mini Cooper?
Matt C
Matt C
12 years ago

I struggled with exactly the same situation several years ago. I have a fairly impressive baseball card collection, and that is sort of my continued collection hobby. The way I allow myself to “indulge” in spending some of my earnings are on items that will increase in value over time.

So I kill two birds w/ one stone so to speak… quench my urge to spend and make an investment at the same time!

– Matt

seawall
seawall
12 years ago

when the urge to shop hits me I often give in – I go to the credit union and ‘buy’ a deposit into my savings account. the look and feel of the experience is rather similar – I browse a bit around the brochure rack, I then proceed to the checkout counter, I hand my card to the person at the desk, they ring it up, I get a receipt. I don’t get camera gear to bring home, but hey it’s a nice substitute to bringing home other things that I might not use as much 🙂 The above is… Read more »

Laura
Laura
12 years ago

I’ve done that with 7-11s. I used to spend $10/day for food and magazines. I changed my driving route and I saved some cash. We recently moved to North Carolina and there are no 7-11s here, so I can continue to save money.

Polly
Polly
12 years ago

GREAT POST JD! I paid off all of my debt (other than my mortgage) in April and the shift happened almost immediately. I was really surprised by it. Concurrent with paying off $18,000 I owed on a HELOC in only 2 years, I saved nearly $5,000 for an emergency fund. I’m hooked on saving…it is almost addictive. Now I’m trying to decide whether I should put money into a (pretax) 457 retirement fund through work (in addition to my 401k that gets 10.5% contributed already) or to put it in a Roth IRA through my stockbroker, or to start paying… Read more »

joejoeice
joejoeice
12 years ago

In my experience, it is hard to make the right choice when the question is looked at as spending vs saving. If looked at this way, spending feels more attractive because it feels like the difference between getting something and not getting something. For myself, the better way of looking at it is spending something now vs. giving myself the ability to spend more later. After all, almost every cent we save is saved so we can spend it someday. Instead of getting something vs. not getting something, it becomes getting something or getting something better. I know the difference… Read more »

DollarDreams
DollarDreams
12 years ago

You did it again JD! I agree 100% that focus on the mid-term savings goal. I am currently saving for our International trip next year and it feels great that for the first time I will be able to pay for the whole trip in cash! ING is great – the day I get my pay-check deposited in my checking account, part of money goes to my ING saving account. I also agree about the transition from spender to saver. I was compulsive shopper of clothes. Since I got serious about saving, in last one year I bought 3 shirts… Read more »

Kenney
Kenney
12 years ago

I’m still new at all of this, but I do find that things I wouldn’t think of buying in the past seem very unnecessary now. Why buy dvds I’ll watch once, instead of renting, or buying a book that the library has for free? Small stuff like that.

That whole “money is time” business really has opened my eyes to be a better shopper.

Now, once I break the habit of eating out, not only will I save some money, but will be healthier for it.

Derrick
Derrick
12 years ago

Great post, I really love how you relate personal experiences and tie in a money lesson. It really adds a sense of personalization to all of your posts, and keeps me coming back to read more.

AlisonK
AlisonK
12 years ago

Great post J.D.! I’m right there with you on the move from “Spender” to “Saver.” I’m about 8 months into my 16 month plan to become completely debt free (with significant retirement savings and an emergency fund) and I’m finding that fighting the urge to spend is becoming easier as I get closer to my goal. It’s funny, now when I want to buy (it can be anything) I find myself going online and making an extra (small) payment toward my debt. Even if it’s $20, I would rather have the money go to what I owe than to some… Read more »

g
g
12 years ago

I’m always looking for ways to save and at the same time, fight inflation.

I recently bought (spent) for a Toyota Prius.
In the long run, it is saving me loads of dough on fuel costs.

Another good tip for fighting spending habits is to only spend half on everything. If you are overweight, half the food will do you good. If you smoke, cut you habit in two. Etc.

I hope you don’t mind I linked your blog from my blog at http://tenasillahe.wordpress.com/

g

AJC @ 7million7years
AJC @ 7million7years
12 years ago

Polly,

You can’t simply SAVE your way to wealth (assuming that’s what you want?) – it may feel great; it may be addictive; and, it may even be sensible …

… but, inflation will keep you poor (you just won’t realize it until you retire … then it will be too late).

So, you also need to BUILD wealth. Good Luck!

AJC.

Polly
Polly
12 years ago

Thanks AJC… I’ve been reading your blog tonight…good food for thought. Your comment/advice about needing to build wealth is well-taken. I have a full-time job working for our local municipality, and will never get rich working there, but I love what I do. I have my home (with a mid-size mortgage), and I have a second home in the mountains owned outright. I am not involved in a business, and although I contribute to my retirement fund, and have a stock portfolio, I worry that I won’t have enough funds to retire. I hope it’s not too late to teach… Read more »

Serendipity
Serendipity
12 years ago

I love Seawall’s comment about “shopping” at the credit union. Like your post mentions, at some point it becomes more fun (or just less painful) to save than to spend. Like with the tax refund, we still immediately think, “What can we spend it on?” but the options are Roth accounts, DRIP accounts, CDs, bonds, and extra mortgage payments!

Jen
Jen
12 years ago

I will totally take all that camera stuff off your hands, JD.

Its funny you bring that up. I am generally pretty good at saving, especially lately, but the urge to buy a really nice camera keeps me up at night. My only really luxury is books, but a digital camera with a wide-angle lense makes me check my savings account endlessly.

Sigh… one day…

rainbowamy
rainbowamy
12 years ago

You absolutely hit the nail on the head.. I’ve gone from $15,000 in credit card debt to (as of receiving my Stimulus check on Friday) $10,000 saved and Debt-Free! When I feel like I have to spend something, I’ll go to Goodwill or Salvation Army and just look for things I can sell for a higher price on eBay. I spend time SELLING now, rather than shopping! When I think about a purchase, I almost always figure out how many hours I have to work in order to buy it- If anything will make you save money, THAT will!! Saving… Read more »

appfunds
appfunds
12 years ago

If I were you, I`d buy this camera.
Life is too short to be mean and cheap.
I agree that we should be sensible with money but get a life, too !

Walter
Walter
12 years ago

To me, the point of becoming debt free with a cash surplus is to be able to purchase things without going into debt. While I have curbed my impulse spending, I still buy things that I don’t *need* but want, except I do it the way it used to be done: I save for it. Surely, if you want an item, you can siphon off a few bucks here and there over the months from your main savings until you accumulate enough for the item without wrecking your savings program. We all love ING for the most part because of… Read more »

Rebecca
Rebecca
12 years ago

ING is over-rated. Several institutions have better rates, so check around. Umbrella bank is just one example that consistently offers better rates for several types of accounts.

Jen
Jen
12 years ago

I think one way to avoid buying stuff is to think of the long term cost: yes, this costs me $2000 today, but invested at a compounded monthly rate of 6% ends up being $16,247.10 in 35 years. I can afford to spend $2000 on a camera, especially if I wait a little while/ buy an older model/ wait for a sale/ etc, but I am not sure I can justify a fancy toy that will cost me $16,247.

Funny about Money
Funny about Money
12 years ago

hmm… I don’t think restraining yourself from buying a new camera when you have very fine camera equipment that takes magnificent photos is exactly “mean and cheap.” It’s more like “smart and thrifty.” But sometimes I wonder how far the habit of savings can go without slipping into meanness and cheapness. A couple of weeks ago, for example, a friend who was splitting the cost of a Costco membership with me announced he would no longer do so. He said he can buy gas at the same price at a local chain (where you have to go inside, stand in… Read more »

Kim
Kim
12 years ago

Jen, I completely agree. I have made the jump from extreme shopper to saver, and was able to pay off $50,000 in cars/credit card debt in 8 months. I re-evaluated all of our expenses and was able to cut approx. $3000 from our monthly outlay by refinancing our home to a lower rate, canceling cable channels we don’t watch, changing our cell phone plan, limiting my trips to the mall, etc. I have always kept a budget but failed to track our actual expenses. Now I keep an excel spreadsheet with our monthly expenses listed (actual vs. budgeted). Before adding… Read more »

My Daily Dollars
My Daily Dollars
12 years ago

Excellent post! I really agree. Now, I try to “shop” our house when I get the urge to spend. Lots of times, we already have something I think we need, thanks to my years of spendy-ness!

Nicole
Nicole
12 years ago

I haven’t quite internalized the savings yet but I try to stay away from recreational shopping and have “consumer free” days where I buy nothing and that seems to help. I hope to get to the point where the desire is completely gone.

Sam
Sam
12 years ago

I realized that I was no longer a spender in December 2007 (a year into our Total Money Makeover) when I stopped by the local mall to return something. I walked through the mall, it was packed with holiday shoppers, and by the time I got to my favorite store I was so turned off by the consumption that I returned the shirt and got the heck out of the mall as fast as possible.

I also really like the cooling off period idea from no credit needed. http://adventures-of-sam.blogspot.com/2008/04/cooling-off-period.html

Frugal One
Frugal One
12 years ago

It’s funny you mentioned this… we went through something similar recently, (from spending to saving) and it inspired my husband to start a blog about becoming debt free… please check it out at

http://engineeradebtfreelife.blogspot.com/

Jenni in NC
Jenni in NC
12 years ago

I think one thing that i haven’t seen brought up in this post is about the *quality* of things purchased…. I had always been a tight-wad or “penny pincher”, while my husband spent his money on whatever floated his boat… So we had a lot to learn from each other, as I always bought the cheapest thing (which quickly becomes more expensive as you replace the item over and over!) while my hubby paid no mind to how much it cost, and only whether he wanted it… Well, with our first year of marriage, 2004, a move to NC (from… Read more »

ed
ed
12 years ago

I envy you for successfully converting the habits.
I am in the progress of doing so (hopefully) but so far I have always sinned at new collectibles & fancy dining. :p

Need to tighten up more!

KC
KC
12 years ago

You are still in transition, from spender to saver, but you’ll get to a point where you’ve reached your goals (the short term ones anyway) and everything becomes auto pilot (meaning long term goals are well on their way to being met – its just a matter of time). When you reach that point you’ll start spending again on the things you really love. I’m a big baseball fan, but its expensive to go to games, collect cards, etc. I put it on hold for a few years – only going to the occasional game and collecting nothing. Now I’m… Read more »

mick
mick
12 years ago

I really like Jenni’s “#4” idea.
(post 41)

Mick

linda
linda
12 years ago

Like most people who read this blog, I’ve made the shift from spender to saver as well. I shop at thrift stores (designer handbags at 1/4 of the price!) spend my time volunteering (great for perspective) and do my darndest to find discount codes for plays. What I find to be difficult however, is to be around spenders, especially those who are foundering but not changing their ways. I can think of one person in particular who is drowning in debt but still spending away. I no longer have any real temptation to spend money – I just spent $120… Read more »

RJ
RJ
12 years ago

Had the same experience as Sam (#39) after turning off the consumer button: felt kinda like going to a Frat party sober LOL.

Will
Will
12 years ago

Wow! This post describes me to the tee… Although I have a weakness for eating out, I am trying to fight the urge, both for my health and my savings. My next plan is to develop a better monthly budget so I can start putting money away into a savings. ING sounds like a good idea, I will definitely check them out.

Thanks for another great post!

AJC @ 7million7years
AJC @ 7million7years
12 years ago

Polly,

I recently read that our capacity to learn NEVER diminishes in most people; reading this blog is a great way to start – and, if you can find a little extra time to keep reading my blog, as well (or, maybe even join my new ‘grand experiment’ at 7m7y.com ) all the better! 🙂

AJC.

Sam Hall
Sam Hall
12 years ago

I love your last two points. Digging through things that I’ve not touched in a while is a great source of “rediscovering great treasures” or finding a bit of extra money to invest.

And thrift stores and flea markets are great places to find books, etc. My problem is not falling into a clutter trap.

B Smith at Wealth and Wisdom
B Smith at Wealth and Wisdom
12 years ago

JD-Good post and reflection on your past habits.

At first living within my means was tough. My wife quit working to be with our children, and since I was in the military my pay was just above poverty level.

Over time, we found we can afford just about anything we want. Some was due to my income increasing. Most due to having no debt and a significant savings.

Financial responsibility is freedom.

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