We all want to be able to spend money without the angst of sliding into the deep end of debt. The challenge is getting a grip on how to make that a reality.
In their new book, “Buy What You Love Without Going Broke: An Empowering Personal Finance Guide with a Mindful Spending Plan,” Jen Smith and Jill Sirianni, hosts of the “Frugal Friends” podcast, get down to the basics of how to take control of your spending. Hint: It’s really not about following a strict budget.
They’ve both grappled with crippling debt and emerged on the other side with some lessons learned. Jen paid off $78,000 of debt in two years, and Jill paid off $60,000, living in an RV while she did it.
I asked Jen and Jill to share some of their advice. Below are excerpts of our conversation, edited for length and clarity.
Kerry Hannon: You start off the book by saying that “any real chance we have at achieving our financial goal is going to take time.” Elaborate?
Jill Sirianni: For the majority of us, we are not flush with cash. And so to achieve some of these big financial goals, like debt freedom or investing in retirement, that’s going to take years, if not decades.
I think we can be a little bit bamboozled by some of these clickbait articles touting, “Look at this young person who paid off six figures of debt in six months.” That is not going to be the average person’s experience when the average income earner is making about $60,000 a year.
Being able to temper our expectations and recognize that this is even more than a marathon because a marathon you can finish in a day. You can take pit stops and rests along the way.
You write that spending is “what we do, not who we are” and that “spending is a skill.” Can you explain that a bit?
Jen Smith: That’s a take from a beloved Disney channel original movie, “Brink!” We have been told over and over in financial media that you are a spender or a saver; that you are a shopaholic or a spendthrift. All the ways we spend money are our identity.
In reality, we all spend money, and there’s a lot of guilt and shame that comes with spending money on anything that’s not “necessary.” We take that negative connotation away. Spending is a skill, and we can all learn it — and we can all get better at it. When you practice and are intentional about it, you can get better at it.
What is value-based spending?
Jill: It is recognizing that we are able to make a spending plan around what truly matters and is important to us, rather than what we’re being told should be important.
There’s so many messages out there about what we should be doing with our money, how we should be spending. What we really want is more of what we call the four Fs. And that’s family, friends, faith, and fulfilling work. For the majority of us, these are the things we actually want more of. Oftentimes, we will spend in order to get more of these things, but we don’t always have to. When we can identify what we want to say yes to, how that aligns with these four Fs, then it can be really easy to say no to the rest. That can help us to decrease our impulse spending, decrease the spending on the influence of social media and others around us, where those things don’t actually meet our needs or get us closer to our values.
What’s the role of the “90-Day Transaction Inventory”?
Jen: I made a budget, and then I didn’t stick to it and I said I’ll start over next month. And then I also didn’t stick to it again. This cycle went on for a couple months before I gave up. And in reality, I was making a budget not founded on any facts or data in my life. I was making it based on what I thought I should be spending on.
With a 90-day transaction inventory, you can make a plan based on actual concrete spending. It gives you a full picture without being overwhelming. You put all your transactions in a Google sheet. You can sort it based on date, based on location, based on category. You start to see patterns.
Talk about the illusion that more money will kind of solve all our problems.
Jill: We are so entrenched in a culture that says that we can throw money to solve any issue that we might encounter. And in some ways, that is kind of true. We are able to buy a lot of things, even cheaply, to be able to address some of the issues that we’re facing.
However, the things that are actually most important to us, money cannot buy. And so when it comes to more time with family, meaningful time with friends, participation in faith activities that are important to us, the ability to set our hands to meaningful work — whether that’s volunteerism or within our careers — these are things that we can’t actually purchase with money. They may take money in order to be able to pursue them. So we do require this resource, but in reality, we can’t actually buy our way to belonging, to connection.
If we don’t address our spending habits, then it doesn’t matter how much money we end up making. Our spending habits and our behaviors will rise to meet those things. Get a good handle on habits: How do I engage with money? What am I spending on? What am I impulsively spending on? That way we’re able to lay a really solid foundation for whatever our income levels look like throughout life.
Jen Smith (center) and Jill Sirianni (right), hosts of the “Frugal Friends” podcast, get down to the basics of how to take control of your spending. Hint: It’s really not about following a strict budget. (Photo courtesy of authors)
You remark that the season of your life is important when it comes to your spending habits. Explain?
Jen: I have two small children, and a lot of my money and time goes toward them. But that time limits me to how much I can work and how much money I can earn.
And I do that gladly because I, first and foremost, want to honor my season. And my husband and I have planned to be able to do this. It’s one of the reasons we paid off $78,000 of debt when we first got married — so that we could do things like this.
How is making one vital spending decision the key to setting people up financially?
Jill: We believe that focusing on the vital few things that make up our budgets can really help us be very efficient in managing our money well and not causing as much stress when it comes to some of those smaller pieces that we spend on monthly.
Twenty percent of the categories that we spend on actually represents 80% of our spending month to month. They’re the big three — food, transportation, and housing. If we can make really smart decisions in these three categories first, then it makes some of those other smaller categories either easier or unnecessary to even be making massive changes with in the long run.
How can we make the most of a house purchase? We could save ourselves hundreds of thousands of dollars depending on the type of home we choose to buy — similarly, with the type of car we choose to buy.
Have a question about retirement? Personal finances? Anything career-related? Click here to drop Kerry Hannon a note..
What is the most radical concept you have in this book?
Jen: We believe debt is neutral. Some debt will be beneficial, and some debt will not be as beneficial to you. It depends on the person. Somebody who takes out a lot of student loan debt to get a high-paying job that sets them off for the future — that’s beneficial. Somebody who takes out the same loan for the same degree, and doesn’t do anything with it — not as beneficial. So it’s different for everyone, but debt is morally neutral.
Kerry Hannon is a Senior Columnist at Yahoo Finance. She is a career and retirement strategist, and the author of 14 books, including “In Control at 50+: How to Succeed in the New World of Work” and “Never Too Old To Get Rich.” Follow her on Bluesky.
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