Recently people have been talking about budgeting, and it sounds so exclusive. No more of anything ‘exciting’ in your life – no Netflix, no more eating out, no more anything; and that it just not entirely true. You CAN save and still do some of those things, it will just have to be in moderation.

After talking to the millionth person about my story and our travel experience and them not understanding how I could possibly have been able to do it, I decided to write this post and film this video about how to save money and still have fun.

Set a Savings Goal

So first, you must have a goal. If you don’t have a goal, you don’t have anything to work towards and you will not be successful. You must have a goal if you want to achieve something or if you want a life that doesn’t completely revolve around money.

I would say that you should make sure you have a short term goal, a medium term goal and a long term goal (you can also have goals, plural, for any of these). You want to know the things that you want now, in the near future, and as you grow older.

Some examples could be retirement, buying a home, having kids, taking a trip or even just having an extra good Christmas. Whatever it is, you need to make sure you are putting your money towards things that you actually care about, rather than spending it on things that you could take or leave.

For example, I like to buy new clothes, however I don’t really need them, and I would be much happier taking a trip than buying new clothes. If I’m working toward a goal, then I really don’t care about buying new clothes. I have enough and my trip to Europe is worth more to me.

On the other hand, the living part, one thing that I don’t want to cut out of my life completely is going to the coffee shop. Going to the coffee shop gives me a much needed break from my house and a change of scenery when my kids get a little stir crazy, so to me, that is 100% worth it! So in this case, I will maybe make my coffee at home 6 days a week to save money, but I will still allow myself to go once a week with my kids. It’s all about MODERATION!

So my advise is just to cut back on the things that you don’t care as much about, and spend on the things that you do care more about – the things that would truly make you have a happier, less stressed, better life.

The 70% Rule

The easiest way that I have found to save money while still living is to follow the 70% rule when budgeting. What that means is taking 70% of the money that comes into your account (after taxes, 401k, deductions etc..) and living off of that 70%. So your mortgage, utilities, other bills, fun spending money, debt payments, extra-circulars, groceries etc… everything basically goes into that 70%. The other 30% goes directly toward your savings.

To do this, you need to make a budget. If you don’t have a budget then you don’t know how much you are actually spending each month which could mean that you are spending 120% of you paycheck each month and you don’t even realize it. You cannot blindly take 30% of your income and put it towards savings without knowing your current financial situation.

I have a few posts on budgeting, so make sure to read more in depth on how to make a budget. You can also read about why you should have a budget in the first place, and the different types of budgeting methods here. Additionally, I have a free budgeting template in the freebies section, so make sure to grab that!!

Working the Budget

You need to make sure that you know exactly where every dollar is going each month, and how much at the bare minimum without any ‘extras’ you need to have each month. Some of you reading may be no where close to living off of 70%, some people are living on 80, 90, 100% of their paychecks. If that is you, you need to start slow and over time work your way towards getting to the 70%.

If you are able to start with the 70/30 I would recommend putting some of that 30% toward an emergency fund so that if something were to happen you have a cushion that would not cause you to spend everything you have saved for a specific goal. Once you have that emergency fund where you want it, you can start putting the entire 30% toward your goals.

You want to make a budget and know where your money is going, you want to be intentional with your money, and you want to make a plan for your money. To get to your goals, yes, it might mean sacrificing on some things, but it might not mean sacrificing on other things. The goal is to focus on what is most important so that you can reach your goals and get to the things that you really want.

The Reality of the 30%

By living off the 70% rule, 30% is going toward your saving goals. Let me give you an example. Say the monthly amount that actually hits your bank account (after taxes and deductions) is $3,000. 30% of that is $900.

So, if you want to take a trip that will cost $3,000, it will only take you 4 months to save for that trip AND you will have money left over to put towards your other goals.

At $900/month, you will have just over $10,000 a year that you can do whatever you want with. That’s a down payment on a house, a car, lots of money for retirement or whatever! As you can see, it’s pretty easy to save a substantial amount by using this rule.

Making it Easier

Once you have your budget written out, and you know the amount you can put towards your savings goals each month you can even automate it so that you aren’t tempted to use it. Depending on your bank, you can set up transfer rules to automatically transfer your money to savings when it hits your account. That will help you stay disciplined and help you reach your savings goals faster.

You can’t look a budgeting as a loss in quality of your life. You just have to be intentional about your money. If you look at it that way then you will never be able to reach your savings goals, and you will never feel like you are living the life you want.

If you are feeling hindered by your budget and feeling like you aren’t living life because you decided to say cut out eating out with your friends, then do some simple things to make sure you are still seeing your friends, but also staying on budget.

For example, if someone invites you out to eat, rather than just saying no, say something like “I can’t meet you for dinner, but why don’t you come over around 8 and we can catch up while playing Euchre.” You can become the host, or the person who suggests things. There are soooo many free things to do – you just have to find them (try checking your cities events website if you need some ideas!).

By doing these things you should be able to save money AND still have the life that you want. Please let me know if you try this out and have success, I love to hear what you are accomplishing.