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Unless you bought all your holiday presents early, you probably spent more money than usual in December. To recover from the holiday gift glut, you may want to consider starting 2015 with a “buy nothing month” so that you can pay off any remaining holiday debt, save money for a special purchase, or build your savings, in general.
What is a buy nothing month?
Just as straightforward as it sounds, a buy nothing month entails cutting nonessential spending out of your budget. You take care of your normal bills, such as your rent or mortgage, utilities, retirement contribution, and loan payments, but you avoid buying luxury items, such as clothes, spa visits, meals at restaurants, and gifts. Ask yourself, “If I lost my job tomorrow, what would I cut?” Then, don’t spend on those items for the month.
For non-fixed essentials, such as gas and groceries, create a budget for how much you’ll spend. Then, stick to it as closely as possible.
Why should you try a buy nothing month?
Do you often spend without thinking? Do you rationalize reasons to buy? A buy nothing month can help you become more mindful about your purchases. In fact, a spending fast that lasts over a longer period of time can help you accomplish several goals: You may use the money you save to pay off debt, go on a vacation, jump-start a retirement savings account, or simply provide you with a sense of how much you can save in one month.
Old habits may die hard, but even if you only try it once, a buy nothing month will help you discover your weak spots—the places where you find it incredibly difficult to avoid spending. For example, drinking coffee from the office coffee pot this month instead of purchasing a latte every morning will help you figure out if it’s possible to quit that costly habit.
While there are certain items that you will only give up during this particular month, the process of doing so may help you identify areas where you can make lasting changes to the amount you spend. Overall, this exercise should help you to distinguish between those items you actually need and those you just want.
Here are four suggestions to help you get through the month.
1. Start with the basics: Planning
As with any budgeting activity, you should first figure out how much you usually spend each month. Reviewing your monthly financial statements for non-essential items is an important step because it will help you anticipate what you might need to cut.
In attempting to give up a spending habit, understand what triggers that spending and replace it with a different activity. For example, if you typically go to a bar with coworkers after work, try filling that time by going for a long walk or calling a friend. If you habitually shop online before you go to bed, watch a TV show or read a book instead.
Menu planning can take time and effort, but if you eat out regularly, cooking at home will most certainly save money. To keep your grocery bill reasonable, only buy the ingredients you need for meals. An astronomical grocery bill can put a dent in your savings.
2. Cash is king
Many people find that paying with cash reduces their spending because they physically see the money leaving their wallet, unlike when they pay with a debit or credit card. If you leave your credit cards at home and take out your allotted, non-fixed budget in cash at the beginning of the month, you will be able to see how much you can spend on a weekly basis. If you run out of cash, the extra trip to the ATM may delay your impulse buys.
3. Dude, where’s my car?
Reducing your mileage will help you save on non-essential spending and help your car last longer. Take one trip for errands per week and try to carpool to events. If you live in a city, figure out if any of your activities are within walking distance, and plan ahead so that you will have time to walk. You may not be able to live without a car, but chances are you can do without it occasionally.
4. Challenge family and friends
Your no-spend month will be tough, especially if you are used to spending money with friends or family. Consider asking your coworkers, roommates, siblings, and friends to take the challenge with you. It may be easier to meet your goals with support, and you will be able to brainstorm free entertainment activities, such as hosting a game night or hiking as a group.
Slashing your budget – even for one month – can also limit your activities, so don’t be surprised if you find yourself with more time than usual. Take the opportunity to develop some free hobbies, such as reading books from the library or learning about DIY decorating.
You may also want to use the time to make some extra cash. For example, you could de-clutter your closet and donate clothes that you don’t wear or research ways to sell your DIY crafts. Finally, you can take some of your newfound free time to decide what you will do with all the money you’ll save from your no-spend month and to learn about other money-saving strategies for the months to come.
Now, it’s your turn. Will you try a buy nothing month, and what will you be giving up? Have you tried a buy nothing month? What did you learn?
Ilyce Glink is the author of over a dozen books, including the bestselling 100 Questions Every First-Time Home Buyer Should Ask and Buy, Close, Move In! Her nationally syndicated column, “Real Estate Matters,” appears in newspapers from coast-to-coast, and her Expert Real Estate Tips YouTube channel has nearly 4 million views. She is the managing editor of the Equifax Finance Blog, publisher of ThinkGlink.com, and owner of digital communications agency Think Glink Media. In addition to her WSB radio show and WGN radio contributions, she is also a frequent guest on National Public Radio. Ilyce is a frequent contributor to Yahoo and CBS News.
The information contained in this blog post is designed to generally educate and inform visitors to the Equifax Finance Blog. The blog posts do not give, and should not be assumed to provide, personalized tax, investment, real estate, legal, retirement, credit, personal financial, or other professional advice. Before making any financial decision, you should always consult with the appropriate professionals who can explain your options, rights, and legal responsibilities, and advise you on any tax, legal, credit, or business implications that may result from those decisions. The views and opinions expressed by the authors of blog posts are their own views and may not be the views or opinions of Equifax, Inc. and/or its affiliates.
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