Spent too much over the Holidays? Here’s your solution for getting your budget back on track, right?
While initial motivation to do this runs high, people jump off board fast due to the following reasons:
1. Feeling deprived. When you think of ‘doing without,’ the immediate worry is that you will feel deprived or have to struggle to survive. The feeling can be overwhelming. Like the dieter who has put themselves on a very strict diet, the temptation to binge is high.
2. Initial planning and preparation involved. To truly not spend any money for a month, you need to take the time to plan ahead. This includes any gifts, postage, children’s activities, traveling, and other events that may occur over the month. For some it involves meal planning and stocking up on supplies so they aren’t tempted to grab fast food or convenience items.
3. Situations crop up throughout the month, causing conflict with the rules. No matter how much you plan ahead, there always seem to be unexpected expenses. Maybe you had to work late and don’t have time to prepare dinner. Are you allowed to get something on the way home, just this once? Your child brings home a book fair flier and has her heart set on the latest novel that everyone else is going to be reading. A coworker is in the hospital, and the office is all chipping in to get them a card and flowers. The hot water heater began to leak and the technician sys it is urgent that it be replaced immediately. Your spouse got a flat tire on the way to work this morning. And that was just the first week …
4. It can become frustrating and tedious, making the end goal seem less important. As you try to stick to the rules, your motivation and initial thrill at finding this great idea begins to fade. Sure, you are saving money by not spending as much, and it is making you think about your spending habits every time you deny yourself, but it also is frustrating. You are starting to think you will need a therapist or support group by the end of the month.
5. If you slip and pull out the credit card, you may feel like you can’t do this and give up trying.
In my view, having a spending freeze can be very beneficial for changing your spending habits. It can also give your savings a boost or help you get out of a financial jam. But, if the focus becomes more about the rules than about what you are learning, then the most important benefits are lost.
Try a Category Spending Freeze
Where I differ from other advocates is I recommend starting with a Category Spending Freeze. To do this, you select a budget category that you want to focus on improving. Say you choose “Dining Out.” You will spend the month exploring other meal options — making food at home, taking lunch to work, trying out recipes — while reaping the savings from not Dining Out.
I think you can make more progress addressing a single category at a time, rather than going on a complete No Spend Month type of program. The biggest benefit is that you focus on changing your spending behavior in the problem category. You may choose to go back to eating out after the month is over, but you will be more likely to consider other options as well. So, the savings will continue in the future.
You are far more likely to stick with the plan for a month if you aren’t overwhelmed by following the rules, and not being able to get needed items in other categories. You’ll know that there is an end in sight, and you won’t feel as deprived.
You can even choose to add on another category once you have the experience of freezing one. For example, cut Dining Out one month and then add Entertainment the next, pushing yourself to come up with ways to have fun as a family for free. By keeping other options open, like buying groceries, you are training yourself to make food at home.
If you freeze Grocery spending, you will have to learn to stock items, plan meals ahead, and creatively use what you have. Think about where your own budget weaknesses are. Then try a specific budget category freeze to change your habits.
You can also freeze a wider category. If I feel I am getting too distracted by cute items in stores, and not curbing impulse buying, then I make that the focus (I may have a serious sock addiction). Instead of freezing all spending, I freeze spending on non-essential items, including decorative, craft supplies, personal products such as makeup or hair thingies. In those months that I have tried this, I learned to take a picture or make a list of any item I wanted. After each month, I revisited the idea of buying the items to see if I still felt it was something I really wanted or needed. My impulse buying is tied to my moods, so I learned to gauge my mood and stay out of certain stores during weaker moments. I also used online “virtual shopping” as an outlet, looking at things and putting them in a cart or saving them to a Pinterest board, without following through and buying.
If you want to try a No Spend Month, by budget category, here are some ideas to consider:
- dining out
- home improvement
- linens and decorative items
- personal care services (haircuts, nails and tanning)
- clothing and accessories
- services for your home (mowing or landscaping that you can do yourself)
- books and games
- music and apps
- craft supplies
- groceries (must have time to plan and stock up for month)
- pet extras (grooming, nails, treats you can do or make yourself)
- vehicle extras (wash, detail)
Have you tried a spending freeze? I’d love to hear how it went, and what you learned from the experience. What would you do differently? What category do you feel needs work in your budget?