Ways to Save When Your Cash Flow Tells You to Buy


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Since moving to our new place, we’ve gotten the obligatory “How are you settling in?” question from everyone. To any outsider, we seem completely settled, but boy oh boy is it a long process, one that I think takes close to a year. We’re just focusing little by little on every aspect of settling in: our new home, Johnny’s new job, our (hopefully) new friends, and — of course — our new budget.

With this new move, we’re able to put a bit more into savings each month, thanks to shifting our budget around some and bringing in slightly more income than we did pre-move. So we’ve had to decide what to do with the extra money that’s coming in. It’s a good problem to have, right? And we feel very lucky to have it. At some point, most of us are faced with moments when we have a surplus of cash flow. Maybe you paid off your debt, and the money going toward it is finally freed up. Or maybe you got a promotion at your job (go you!), brought in some dough from an extra side gig, or started receiving a monthly stipend from your rich uncle (if so, we all hate you).

Whatever the case, what does one do with a surplus? I’ll be honest, that it’s rather tempting and very easy to just increase our standard of living a tad. Johnny and I have been surprised by just how easy it is to justify spending a little more on food, or clothes, or what-have-you because we know we now have a little more of a cushion than what we’d previously budgeted. Those “Should we buy it?” moments can easily become “Yes, and we’ll take another five!” moments.

But we’re sticking to our budgeting guns, and here’s how our extra monthly funds are being delegated:

More saving

“More doing. That’s the power of The Home Depot.” I watch too much TV. Rather than just keeping our extra savings in our money market account, we’re putting some away into a Roth IRA. We don’t have any huge upcoming expenses (like a car or a house), so we’d rather lock that money away and make it work a little harder. We’ve also given ourselves a goal for what we’d like to save by year’s end, and having it to work toward is really helping us to say “No way, Jose!” to extra spending.

More money down

Now that we have a little extra money at our disposal, we’ve been able to pay upfront for items we know we’ll be spending money on for the next 12 months, such as car insurance. By paying for all 12 months at once, we lose more money today, but we save in the long run. Before, we had a harder time seeing that much money leave our bank account in one fell swoop. If Johnny ever gets that rock climbing gym membership he’s been pining for (that’s pining, not pinning — he wanted me to clarify), we plan to pay for it upfront as well.

A few long-needed items

While we’re keeping our monthly spending about the same, we have needed a few items for a long time. The state of our kitchen knives is downright dangerous. It’s such a paradox to say that cutting with dull knives is more dangerous than sharp ones, but it’s true, people! My fingers are going to thank me when we finally splurge on a new knife set soon. We have a few other planned mini-splurges in mind, but we’re keeping it to one per month.

And as always, one of the biggest keys to keeping our surplus a surplus has been staying conscientious (thank goodness for spell check on that word) of every. single. dime. And that means we continue to enter each and every expense into our budget as soon as we spend it.

How do you combat inflating your spending when your cash flow increases? And don’t say by looking at H&M’s baby clothes online. I already tried that, and it didn’t help.

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17 Comments

  • Reply E.M. October 7, 2013 at 7:59 am

    I am a fan of more savings. If I get any sort of raise in the near future, it’s all going toward my student loans. After that, I plan to put it toward retirement savings and possibly start a house down-payment fund if we are in the right situation for that. I agree, though, that it can be tough to say no, because it feels like you can finally afford a few extras that you couldn’t before.

    • Reply Johnny October 7, 2013 at 11:45 pm

      Savings snowball — I like it! Move those extra bucks from one area of funding to the next. Joanna and I should probably sit down and actually plot out and prioritize where to put the few extra bucks instead of our general “savings fund.”

  • Reply jrm October 7, 2013 at 10:28 am

    I’m in a similar boat having recently moved and receiving a nice pay boost (much needed and appreciated). I’ve doubled my small remaining car loan debt and will have it paid off 6 months earlier (yay!). I’m also doing something similar to you as replenishing/buying some much needed things that were badly needed. Tires, a new mattress, professional shoes — no really,

    I’ve got a list worked out (love lists) of few more basics I need. After that I’m going to take the extra fund/former car payments and send it to a savings account that I contribute to directly via paycheck direct deposit. The savings account won’t be tied to my checking account. I figure by next August, I’ll need to re-evaluate my savings and thing about ways I can make the savings earn more interest/invest.

    • Reply Johnny October 7, 2013 at 11:47 pm

      Congrats on the move/raise! And ditto on the car loan repayment. Your “splurge” items all sound extremely practical and worthy of replenishment.

  • Reply rob October 7, 2013 at 11:41 am

    Well guys, when we were young, just starting out career wise and raising a family like yourselves, we also tended to keep our spending within already previously set budget limits (within reason). Whatever excess $$$ we saved was (back then) put into a house purchase account (initially) – which later turned into a mortgage prepayment account – and then, years later after the house was paid off, towards our investment accounts. Of course we also regularly made sure to put a little $ aside in savings towards the eventual need to maintain / replace things (like our car, clothes, etc).

    That all said, back in the day we also usually rented ponies instead of buying them for the kids! A cheaper solution plus it cut down on the poop maintenance chores! :-)

    • Reply Johnny October 7, 2013 at 11:51 pm

      Pony renting! Of course! I guess it’s smarter than leasing one. Thanks for the tip, Rob! Kidding aside, we need to do a better job of actually directing our savings to specific purposes (i.e., Vacations, clothes, etc.). Gotta give those dollars a name — even saved ones.

  • Reply Chris October 7, 2013 at 2:29 pm

    Whenever I get a raise at work I take the bi-monthly increase in my check and have HR direct deposit that extra $41.07 a month (made that up) into my secondary savings account. For unexpected income, like making $20 for removing spyware from a coworkers computer, I usually spend that on myself. If I was smarter I would put it into savings, but alas I am not perfect. Nor do I know the proper comma’ing of alas.

    Also found this quote that I thought was awesome. SO HERE YOU GO GUYS!

    “I need new haters. The old ones started to like me” – T-shirt in Tampa

    • Reply Johnny October 8, 2013 at 12:00 am

      That’s hardcore. And rad. That’s an awesome way to take that decision out of your hands. We think similarly on unexpected/side gig income. Sometimes we’ll save it, but often the only motivation for why we’re willing to pick up the extra work is because we know we spend it how we choose.

      So does that quote (which is awesome) mean you don’t hate us anymore?

  • Reply Anne October 7, 2013 at 4:03 pm

    I try to dedicate most of it to something else immediately, and spend some on “reward” type items like the new knives you need. If you’re not maxing your retirement accounts out (I know you mentioned Roths) that’s a good place to dedicate at least a portion of it.

    • Reply Johnny October 8, 2013 at 12:03 am

      Roth is our first priority, since we’ve neglected to start them up until now. But we’ve been matching our 401k’s, so we don’t feel too too guilty. And then every other month or so, we’ll start updating more “need”-type things that will likely last forever — like knives. And LEGOS. OK, not LEGOS. :)

  • Reply Michelle October 7, 2013 at 9:19 pm

    I received a small raise this year and am trying to budget based on the old salary. Happily, winter is coming and it shuts down a ton of my spending because I stay inside and read books all winter.

    • Reply Johnny October 8, 2013 at 12:06 am

      Good call. Our spending always drops during winter. Joanna reads books, I watch college football and basketball. And we wouldn’t have it any other way. Hopefully Utah’s powdery mountains don’t lure me to snowboard too much and break the personal spending bank.

  • Reply Kali @CommonSenseMillennial October 8, 2013 at 8:34 am

    Sounds like you guys are being really smart with your extra money! More saving is always the first thing we do when we find we have a surplus. If it’s a big surplus we then start looking at things we’ve been needing (or really, really wanting!) for a long time but have put off – so it sounds like we have a similar thought process! That’s awesome that you guys have found yourselves with a bit more money. Always a good situation to be in :)

  • Reply Linda October 8, 2013 at 8:40 pm

    >>It’s such a paradox to say that cutting with dull knives is more dangerous than sharp ones, but it’s true, people!

    Haha, nope, for me it’s the opposite for sure. I have solid statistics here from my recent experience, dull knives = 1 cut a year maybe, not serious. Sharp knives = 1 cut per week, at least. 😀

    Mostly from grabbing for utensils in the kitchen sink water and picking up the blade instead *oooouch* – which is from a long habit of owning dull/serrated knives…. If I owned and used a dishwasher it might be a different experience!

    • Reply Johnny October 14, 2013 at 1:44 am

      Our dishwasher keeps our “x # of Days Since Kitchen Stabbing” sign from constantly reading “0.” But yes, we’ll probably need to be careful during our transition to knives that actually cut things without applying 1000 lbs of pressure.

  • Reply Emily @ evolvingPF October 9, 2013 at 2:24 pm

    We just got our cost-of-living raises and reduced our monthly expenses slightly with a local move, so we are dealing with the same (good) issue! We put in place two of your suggestions. We increased our savings and giving rate (commensurate with our raises plus a bit more) and are putting more each month into a couple targeted savings accounts for fun purchases.

    • Reply Johnny October 14, 2013 at 1:45 am

      Awesome. And hooray for fun purchases. That’s why we’re doing all this budgeting crap anyway, right?

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