I realize that being reluctant to spend money isn’t the normal problem people have. This is especially true where I grew up: the USA. But I do have trouble spending money, my default desire it to save money.

The main reason I have the ability to have a digital nomad, long travel lifestyle now is not some incredible business bringing in lots of cash. It isn’t have made a huge fortune that I can now live on. It is mainly because I don’t need to spend a huge amount now. And I have saved up money by not spending a huge amount before. Investing that money well also helped.

But I do also have trouble due to my desire to not spend money even when I might like the result (when the cost just seems too high for what is offered). I have taken to a “reverse budget” where I have set money that I expect to spend. And I add to that balance each month and if it grows I have an increasing pile of money I am suppose to spend.

So when I think about getting a guide for a trip in China and I am put off by how much it costs, I can look at my balance and say if I have to spend that money there really isn’t anything I want to spend it on more than hiring a guide. So then I can spend money in the way that benefits me and I can escape the trap of saving more than really makes the most sense when you look at the overall picture.

Sunset from boat tour in Kuching, Borneo, Malaysia. I may well not have taken this evening boat tour if I didn’t have money I “had” to spend.

Some people will put some amount into a checking account each month to limit their spending to say $2,000. I do something similar but for the opposite purpose to segregate money to spend. I move the decision from whether I am better off saving or spending that money to this is the money that has already been allocated for spending, so now go spend it on whatever is the best use for it.

Being frugal has worked very well for me. It allows me to quit my full time job and go to work for myself while I travel. My model wouldn’t work if I hadn’t been frugal and wasn’t frugal now. But, most models are not perfect and my psychology leaves me caring more about saving money than buying whatever it is now. Overall that is good. But I felt I needed to push the balance a bit and this model has worked well.

I have built up a balance in that account (as even having it allocated to spending my personality still is reluctant to spend without good reason). But this psychological trick is useful in making me see the money as already allocated for spending and now I just need to decide what is the best way to spend what I already decided to spend.

Related: Personal Finance, Minimal Budgeting – Creating an Emergency Fund for Unexpected Expenses – Can I Afford That?