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Don’t Spend Less to Save More (Do this Instead)

Your savings aren’t growing, but you can’t afford to increase the percent you contribute each month. The solution is to spend less money in other areas of your life, right? 


The notion that we have to subdue our quality of life for financial freedom is absolute bullcrap. Average Americans already allocate roughly 9% of their income to savings, not including monthly contributions to retirement plans. 

average American spending


Experts recommend putting 10-15% of your income towards savings, but you’re already doing that or working your way toward it, so now what?

I’ll tell you this: Saving does not always mean you should be afraid to spend your money. 

When your purse strings (or wallets) are already super tight, tweaking the percentage of income you save won’t work. 

You’ll just be sacrificing something else you need and putting yourself into a worse situation. 

Here are a few reasons why you shouldn’t spend less to save more:

Too Much Frugality Is Financial Sabotage 

Frugality is a popular personal finance trend right now, and for good reason. Unemployment has increased by 56% since the U.S. COVID outbreak in March 2020. We’re officially in a recession. 

That said, an overly restrictive budget can lead to dangerous overindulging. We need the rewarding feeling of a pleasure purchase now and then. 

The instant gratification of buying things can be therapeutic, and depriving yourself of that for too long is usually a mistake.

Take Alyssa Fischer from Mixed Up Money, for example. After her student loan debt became unbearable, she adopted a frugal lifestyle and avoided spending money as often. After one out of character splurge, she went on an unplanned spending spree. 

Says Alyssa, “I spent over $1,200 within one week after going nearly 15 months without buying myself anything, and I have no one to blame but myself.”

What could she have done differently? 

Had she previously allowed herself a little wiggle room for pleasure spending, this wouldn’t have happened. She’d have already bought all those items or saved for them, and her bank account wouldn’t look like someone stolen stole her card and went ham.

Better Savings Goals Can Drastically Improve Your Finances

Do you have savings goals, or are you throwing money into an account and hoping all goes well?

By “savings goals,” I mean:

  • Are you saving for the short-term, long-term, or both?
  • Do you have a retirement plan?
  • How much money do you want to accumulate?
  • For how long do you plan to save?

Answer these questions to add purpose and direction to your savings efforts. Once you know approximately how much you want to save and your timeline, you can pinpoint monthly savings goals and establish an income minimum. 

For reference, here’s how much you should have in your long-term savings for retirement, based on age: 

retirement savings by age


Don’t panic if you’re not there yet. These are just averages and estimates, but they should give you an idea of where to start. 

Now short-term savings are a different story. If you have a wedding or vacation coming up in a couple of months, you should tighten your purse strings (or wallet) and cut a few costs – but only until you’ve reached your goal. 

The difference here is that adjusting your spending habits for a few months won’t take away from your overall life experience. It’ll allow you to make memories you wouldn’t have been able to otherwise. 

You Deserve to Enjoy Your Hard Earned Money Now

The myth that we have to work ourselves to the bone in exchange for financial freedom is a lie. 

Think about it; the company you work for is making billions every year for the work you do, but you’re here trying to decide if you should save or spend your money. Where is the joy in that?.

Americans work an average of one hour more per day than Europeans, but we have a larger lower class than most European countries. To make matters worse, the lowest paying jobs in this country are often the most laborious. 

But here’s what corporations don’t want you to know: working hard does not pay off. 

When you genuinely want to save more, the solution isn’t to spend less. You have to earn more income for the work you do ASAP. 


  • Ask for a raise 
  • Start freelancing 
  • Become self-employed 

Someone will pay you fairly for your time, but you have to value it first. You deserve to enjoy the fruit of your labor now — heck, it’s yours! If a tree isn’t bearing enough fruit for your liking, maybe it’s time to find a new one.

What to Do Instead of Spending Less: 

you can spend and save

Spend Wisely

Evaluate your expenses and figure out where your money is going every month

Are you making purchases that improve the quality of your life? For example, buying groceries and cooking is wiser than eating out every night. 

Now, I’m not saying to stop ordering in altogether — quite the contrary. You’ll benefit from rewarding your hard work now and then with a meal from your favorite restaurant if that’s what brings you happiness. 

Anything that resets your motivation and replenishes your mental energy is okay in moderation. But remember not to go overboard. 

Another way to spend wisely is to make purchases that’ll contribute to your wealth-building efforts. Investing, buying property, or starting your own business are all instances where spending more is the smarter decision. 

In this case, spending more cash today will allow you to save more money in the future. 

Choose The Right Savings Account

Selecting a bank to trust your savings is no small task. Depending on which you choose, you can grow your savings just by letting them sit. But you need to be mindful of inflation. It can eat up any savings growth you earn. 

You already know that security is a must — no matter what, you’ll benefit from an FDIC-insured account. But should you go with convenience or profit?

But other than that, it depends on your savings goal. If you’re saving up for a medium-term goal like buying a house, you need an account that’ll multiply your money. 

Many banks offer competitive interest rates for their savings accounts and certificates of deposit (CDs), often exceeding the .06% average annual percentage yield (APY). 

Some of the highest saving account interest rates you’ll find are:

  • Citibank: .9%
  • Vio Bank: .83%
  • Ally Bank: .80

I also suggest housing your savings account in a bank different from your checking. How else will you resist the temptation of skimming a little off the top?

On the other hand, if you’re looking to save money for a shorter-term goal (less than a year), convenience and security are most important. It should be reasonably easy to access your money when you need it, and you don’t want to risk the consequences of an uninsured bank. 

The takeaway: multiply and optimize your money at every turn.

What do you do when you’ve saved all you can, but it still isn’t enough? Reallocating your spending budget is not the answer. 

Doing so will cause you to sacrifice valuable experiences, risk unhealthy financial habits, and avoid tackling the underlying money issues hindering you. 

Next: ​​The 13 Best Apps to Help Get Things Done

Article written by Lyric Mott, a freelance writer and founder at Nitty-Gritty Growth, a blog dedicated to self-improvement through productivity and personal finance. 

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