Spending money well is part of personal finance.

When I was first getting into the world of money, I read a lot of extreme frugality blogs, because it’s what I found first. That gave me the impression that spending money was Always Bad, and for a while I really leaned into that—check out my cringeworthy old posts if you don’t believe me.

Extreme frugality wasn’t sustainable, at least for me, but luckily it’s not the only way to approach spending when it comes to personal finance.

Spending money well will look different for everyone, but it means doing a few key things:

• Spending within your means, and not taking on credit card debt to fund your spending
• Balancing spending with your other financial goals, like saving for retirement and building an emergency fund
• Spending on the things that matter to you, and cutting back or compromising on the things that don’t

Those are sometimes easier said than done, because it means you know what’s coming in every month, where your money is actually going, and doing the work to understand how your spending actually makes you feel. But once you do that work, you can spend guilt-free and still hit your financial goals—and that’s worth a lot.

If I can recommend one thing to help you hit all these goals, it’s tracking your spending. Whether you do it in a spreadsheet or using software, or some combination of both, it’s the highest-impact thing I’ve ever done for my money, and it’s a key step in learning what spending well means for you.

Tools that can help you spend well