Podcast Summary: The Side Hustle Show - Episode 660: How to Stop Spending Money

Introduction

In Episode 660 of The Side Hustle Show, host Nick Loper and guest Jen Smith delve into effective strategies for curbing unnecessary expenditures. Jen, a seasoned side hustler and co-host of the Frugal Friends podcast, shares actionable insights from her experiences and her newly released book, Buy What You Love Without Going Broke. This episode is a treasure trove for listeners looking to optimize their personal finances by addressing the often-overlooked expense side of money management.

1. Understanding the Expense Side of Personal Finance

Jen Smith emphasizes the importance of viewing personal finances holistically, akin to managing a business's revenue and expenses. While increasing income is a common focus, managing expenses can yield quicker and more substantial financial benefits.

• Tracking Past Expenses: Jen advises starting with a retrospective analysis of the last 90 days of spending to identify patterns and habits. This foundational step equips individuals to recognize areas prone to overspending.

  "You have to know what you're doing. You have to track your expenses for this." — Jen Smith [02:08]

• Analyzing Spending Habits: By categorizing expenses using tools like credit card statements or budgeting apps (e.g., YNAB, Monarch, Copilot), individuals can pinpoint recurring unnecessary expenditures, such as repeated grocery store trips due to poor list adherence.

  "Maybe I'm not going to the same place over and over, but I'm doing different take out over and over." — Jen Smith [03:29]

2. Building an Effective Spending Plan

Transitioning from tracking to planning involves creating a flexible spending plan tailored to individual lifestyles.

• Spending Plan vs. Strict Budget: Jen suggests that instead of a rigid budget, a spending plan offers more flexibility, allowing for discretionary spending without guilt.

  "I create fewer categories; it actually gave me more freedom to not spend on things and to spend without guilt." — Jen Smith [07:09]

• Zero-Based Budgeting: This method assigns every dollar a specific role, ensuring intentional allocation towards financial goals, such as saving for a side hustle or paying off debt.

  "You have a job for every dollar. So that dollar's job could just be a miscellaneous fund." — Jen Smith [09:40]

3. Practical Money-Saving Hacks

Jen and Ben discuss several tactical approaches to reduce spending without sacrificing quality of life.

• No-Spend Challenges: Implementing short-term no-spend periods (e.g., 30 days) can reset spending habits and highlight unnecessary expenditures.

  "A no spend challenge can help you figure out, okay, what are the things that I am constantly thinking about that I really truly miss." — Jen Smith [28:27]

• Substitution Game: Replace current expenses with more cost-effective alternatives. For instance, switching to affordable cell phone plans like Mint Mobile or renegotiating car insurance can lead to significant savings.

  "Have you considered this better, cheaper alternative? It's a natural affiliate recommendation to make that switch." — Ben [24:43]

• Cash vs. Credit: While credit cards offer rewards, they can lead to increased spending due to their intangible nature. Using cash can provide a tangible sense of expenditure, promoting mindful spending.

  "It's the sound of your marketing working." — Ben on credit card promotions [36:02]

• Deal-Finding Tools: Utilize browser extensions and websites like Benny and Unroll Me to find secondhand deals and manage marketing emails effectively, reducing the temptation of impulse buys.

  "I use Benny... it saves me way more than like any rebate app because I'm saving 50% on things that are even new with tags." — Jen Smith [41:03]

4. Behavioral Strategies for Sustainable Saving

Addressing the psychological aspects of spending is crucial for long-term financial health.

• Accountability Partners: Having someone to support and hold you accountable can significantly increase the likelihood of adhering to spending plans.

  "You got to have somebody else who can support you and say, no, no, no, we're in this together." — Ben [49:54]

• Celebrating Small Wins: Acknowledging and celebrating minor financial achievements fosters motivation and reinforces positive habits.

  "Celebrate small wins. Reflecting on the journey so that the next time you're trying to accomplish something and you're not sure if you can do it, you can actually look back and be encouraged." — Jen Smith [51:21]

• Managing Lifestyle Inflation: As income grows, it's natural to increase spending. Jen advises ensuring that lifestyle upgrades are proportionate to income increases and aligned with personal values.

  "Lifestyle inflation is not bad as long as it's proportionate to your income inflation and it aligns with what you truly value and what your goals are." — Jen Smith [56:55]

5. Tools and Resources Mentioned

• Budgeting Apps: YNAB, Monarch, Copilot
• Deal-Finding Extensions: Benny, GM Gem Search
• Email Management: Unroll Me
• Financial Literature: Dopamine Nation by Ann Lemke
• Books: Buy What You Love Without Going Broke by Jen Smith

6. Conclusion and Final Tips

The episode wraps up with a reinforcement of the discussed strategies, encouraging listeners to implement these money-saving tactics to achieve financial freedom and support their side hustle endeavors. Jen highlights the significance of community and support systems in sustaining financial goals.

"Work with your brain, not against it. Put up the guardrails so that path doesn't derail you from your financial goals." — Jen Smith [46:13]

Nick and Ben commend Jen for her valuable insights and promote her various projects, including her upcoming YouTube endeavors and the Frugal Friends podcast. They also remind listeners to explore additional resources and tools to enhance their financial strategies.

Key Takeaways

1. Track and Analyze: Begin with a thorough review of past expenses to understand spending behaviors.
2. Flexible Planning: Create a spending plan that allows for discretionary spending without feeling restricted.
3. Implement Hacks: Utilize no-spend challenges, substitution game, and reputable deal-finding tools to reduce costs.
4. Behavioral Adjustments: Leverage accountability partners and celebrate achievements to maintain motivation.
5. Mindful Upgrading: Ensure that lifestyle enhancements are intentional, proportionate, and aligned with personal values.

By integrating these strategies, listeners can effectively minimize unnecessary expenditures, thereby maximizing their financial resources for side hustles and long-term financial stability.