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Last week I shared my idea for a no-spend month because February is my month to focus on using money wisely, in this case, not using it. The entire theme of my Year of Living Lovely is to focus on living a more intentional life. What could potentially be more intentional than our spending habits?
I felt that being more mindful of the how, where, when, what and why I spend my money is the first step to claiming control of my finances. To partake in the journey I had to first list out what I spend my hard earned cash on. Record your typical daily, weekly, and monthly purchases. (If you’re really ambitious, go over your debit and credit card statements for the whole year.) I listed my past month below. (When making your own list, you can get even more specific. For example: how many new clothing items do you buy in a month? What groceries do you buy every week? I didn’t want to bore my readers with a list of every item in my shopping cart or a breakdown of each expense.) To get really specific, pull out your last debit card statement and list each item you spent money on.
What
- Rent and rental insurance
- Vehicle insurance
- Gasoline
- Groceries (what kinds of things end up in my cart?)
- Mobile phone bill
- Occasional clothing purchases
- Payments to wedding vendors
- Vehicle maintenance
- College loan payment
- Lap top financing payment
- Travel magazines
- Books
- Mister’s vet bill and medicine (my cat)
- Pre-made lunches (Panera Bread, deli, etc.)
- Photographic prints for clients
- Wedding albums
Why
This part is important because it is very telling about not only what we spend our money on, but what we waste it on. Go down your list and put your reason for each expense and item. Things like rent are obvious: “I need shelter.” That one is a keeper. Books: “I love to read.” Reading is great, but do I really need to spend money on new books in order to read something great? The library and internet works well in most cases. This is where I can cut costs and by checking through each item on my list I can determine where I overspend. Some expenses are a once-in-a-while thing such as my cat’s vet bill and the new serpentine belt I had to put in my car. People spend money on what they find to be most valuable in their life. You may be surprised by what you value with your paycheck.
How
How do you spend your money? Online? Window shopping? Cash? Credit card? When we charge ourselves we do build up credit, but at what cost? You may want to examine how you spend your money to determine whether or not it impacts the amount you end up spending. For example, people tend to be more frugal when they pay with paper cash because they physically see how much they’re spending and with online shopping being so convenient, it is easy to over-shop.
Where
Where do you spend the most? Perhaps your largest expenditures are for housing costs like rent, heating, and electricity. Perhaps it is clothing, travel, or entertainment. Maybe it is one particular place such as a gym, the mall, or a specific store. How can you cut down spending in each of these categories? If your largest expense is for living costs, how can you shop around to get a better deal on your electricity costs? If it is at a place, can you limit your time at that temping location like that fast food joint you frequent several times a week? Price shopping or limiting your exposure to temping spending places like your favorite clothing store can save you money in the long run.
When
When do you spend the most of your money? When you’re feeling bad? On vacation? One weekends? During your lunch break? When you’re browsing online? Studying your habits and truly knowing them helps you to be more mindful of your choices and aware of your weaknesses. I noticed that when I feel sad, I find myself in a book store. I had to work hard to change that habit to something that was kinder on my wallet. In exchange, I wander to my local library or I read blog online instead.
Once you have your list you can create an action plan on how to spend less. Use your own list as a guide to decide where you need to focus your spending energy on. Where can you cut back? How can you cut back? Here are some simple tips to help you create your own action plan:
- Identify your weaknesses: books, clothes, entertainment, coffee-to-go, etc. Are some of those weaknesses impacting your finances? Would you rather use the money elsewhere?
- Avoid places where you have difficulty reigning in your self control.
- Go on an online shopping fast.
- Try using cash instead of debit/credit for a week and see what happens.
- Give yourself an allowance for spending.
- When do you overspend the most? Choose to do a free activity during the time you usually break down and shop.
- Feeling an impulse to spend just because? Try a distraction technique such as doing a favorite activity, listening to music, calling a friend to say hi, or meditating.
- Commit: Remember, this spending ban is only temporary. You can do this.
