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Life Kit: How To Rein In Your Spending

DANIELLE KURTZLEBEN, HOST:

As vaccine rates increase, many Americans are increasing their spending, especially discretionary spending. Hiring is up at retail stores, restaurants and hotels. And after 16 months of on-and-off lockdowns, it's easy to feel like a kid in a candy store. For NPR's Life Kit, Lauren Migaki has advice on how to rein in that spending and stay on budget.

LAUREN MIGAKI, BYLINE: Tiffany Aliche had been working as a teacher for nearly 10 years when the school she worked at closed.

TIFFANY ALICHE: So I had no job. I had a mortgage that I could no longer pay. I took all the money out of my retirement account, sunk it into the house, still lost it to foreclosure.

MIGAKI: This was over a decade ago, during the Great Recession. A lot of folks lost their jobs. But Aliche had grown up with a dad who was an accountant and CFO. She had a savings account and prided herself on being good with money.

ALICHE: I'm 1 of 5 daughters, and so my dad was, by force, pretty frugal. Also, my parents were born and raised in Nigeria, so they also had this frugal mindset that often comes along with being an immigrant to a new country.

MIGAKI: Aliche ended up moving back in with her parents. She was in her 30s, sleeping in her childhood bedroom.

ALICHE: It was a really dark and hard time.

MIGAKI: She got back on her feet using the same budgeting and saving methods she learned growing up. Then, Tiffany Aliche's alter ego, The Budgetnista, was born. She took her decade of teaching skills and turned them towards financial literacy classes for adults. Earlier this year, she wrote a book called "Get Good With Money," which lays out her hard-won lessons about money, credit, saving and homeownership. One of her biggest tips - establish a budget. Stick to it, but make sure to work in a little fun.

ALICHE: Money is not just meant to be responsible with. You're supposed to enjoy money, too. It's a tool to make your life better.

MIGAKI: But, Aliche says, be thoughtful about where that 20 bucks goes. Choose something that's going to provide you lasting joy, not just clutter.

ALICHE: I have this little sticker on top of my computer that says need it, love it, like it, want it. And it's a reminder to me when I'm moseying on over to my Amazon account, is this a need, Tiffany The Budgetnista? And most importantly, is this a love?

MIGAKI: And when the metaphorical poop hits the financial fan, Aliche says, drop down to your noodle budget.

ALICHE: That's your ramen noodle budget. For some people, it's peanut butter and jelly budget. For some people, it's rice and beans, right?

MIGAKI: A no-frills budget can help you weather those times without digging into savings or ending up in debt. Finally, create a savings plan. Set up a system that automatically moves your money to your savings account. And try not to think of saving for big things like retirement as a chore.

ALICHE: So I have named my future self. Her name is Wanda (ph). Wanda is 70 years old. And I think to myself, it is literally my job now as Tiffany to take care of Wanda.

MIGAKI: Aliche says doing this makes saving for the future more fun, imagining her sassy future self lecturing her.

ALICHE: Oh, OK. So - oh. So Top Ramen, that's what I'm doing because you've decided that you want to go to Paris and put it on your credit card even though you know you don't have the money to pay it off.

MIGAKI: Aliche says look out for your Wanda the next time you're considering whether or not to pay for that fourth streaming service. Lauren Migaki, NPR News. Transcript provided by NPR, Copyright NPR.