Which way do you spend, up or down? Between the science and the real-world chaos of managing money lies our attitude towards spending it–-we either spend up or we spend down. The impact of how we think about and use money is quite staggering as evidenced by the findings of the 2022 Fidelity Money Mindset Study referenced in the Follow the Science section on the homepage. The study supports the idea that separating your money into categories or buckets so you can see what is available to spend reduces stress and sets you up to be a better saver.

The solution isn’t just having more money. If we’re honest with ourselves, we know people are happy with very little money and people who are miserable with tons of money! Real financial peace is more about being free of the man with little to no debt. Financial wealth is a whole different subject better left to financial planners and investors. 4 Bite Budget is a system that will help with managing your money and debt with the goal of replacing stress with peace.

So, if our mindset towards money is important the answer to how you spend what you have Paramount to your success in having peace and even wealth financially. We all have different thresholds for savings, debt, risk and spending etc. Ultimately, we either spend up or we spend down.

Spending up is credit based–you spend up to a limit. That limit may be a budget amount you’ve you set, or it could be the credit limit of your card(s). This works well if you are disciplined with your money and stay within your budget. But if you are spending beyond your budget because you have credit available, you’re adding debt to your financial picture. Even worse, if you use one card to pay off another and another in a series of cash flow shuffling, you’re playing with house money and if the bank calls the debt do–-then what?

Spending down is debit based–you spend down from a limit. The limit being spent from is based on how much money you actually have. If you don’t use the bank’s money, they can’t charge you interest, and they can never take anything away from you! That’s empowering! Using a debit card means you are spending from an account you put money into, which prevents you from spending more than you budgeted. In financial terms this is called zero based budgeting–-what you spend is equal to what you earn. This isn’t always easy, but it’s the only way to get peace financially.