This is the last post in a series on
budgeting, check out
the rules,
week 1,
week 2,
week 3, and
week 4. This post is longer than my usual posts, but it's a wrap-up.
What kind of sound does a credit card make when you swipe it? Well, that is a sound I have not heard in a month. This past month, I took on the personal challenge of significantly limiting my spending. I was inspired by the No Spend Month series on
Small Notebook and, allocating only $300 in cash to spend on anything for myself and the household, I wrapped my credit card in paper and sealed it with tape. My allocated budget included gas, food, clothing (of which I bought none), and entertainment (of which I had very little).
Here are 10 lessons I learned during No Spend Month:
Lesson #1:
Curbing your spending can require choosing between shopping close to home and traveling to find better deals. I live in a somewhat remote area – the nearest Trader Joe’s, Food 4 Less, or Target is 20-40 miles away. Each trip to “town” costs $5 to $10. When I run out of staple foods like eggs, milk, and bread, I pay 10% more to buy them in my town than in next town over. During No Spend Month, I opted to shop at the local grocery store rather than travel to town for just a few items.
Goal: Ultimately, I would rather take the bus, but where I live the public transportation system is pretty limited. The next best thing is to combine shopping and errands and to plan ahead.
Lesson #2:
Saving money sometimes requires choosing between supporting local businesses versus shopping at chain stores. During No Spend Month, I started window shopping for holiday presents. I prefer to buy gifts from the local stores – they have many unique handmade items (like purses, jewelry, and pottery), but the department stores have similar items for almost half the cost. I decided this year I will shop locally and opt for slightly smaller holiday gifts.
Goal: Support local vendors by purchasing items that are less expensive, such as flowers and produce at Farmer’s Markets.
Lesson #3:
Living on a budget can mean choosing between buying in bulk versus buying what you can afford. I found a great deal on a 24-pack of light bulbs, but even at a low price I only use a few light bulbs in my house per year. And, there are things I need more than light bulbs. There are lots of items that come cheaper in bulk, such as canned foods and toiletries, and if you can afford to buy them in bulk you can surely save several dollars. However, during No Spend Month, I opted to only buy what I needed for the month (and that did not include light bulbs).
Goal: Find a friend who is willing to split bulk items.
Lesson #4:
Organic and healthy foods cost more. It is clear why low-income families struggle with poor nutrition – healthy food is more expensive than processed food. It was tough to spend a few extra dollars on items that looked virtually the same, but I opted for the organic produce whenever there was an option.
Goal: Research which types of foods have the highest levels of pesticides. For example, peaches and apples rank highest, while onions and avocados rank lowest. Information is available at foodnews.org.
Lesson # 5:
Meat is expensive. Our family eats meat at every meal, and it is a significant portion of our grocery bill. I spent $25 on meat for one week (ham for breakfast, turkey for lunch, chicken and beef for dinner).
Goal: Try to find tasty, filling, less expensive alternatives to meat (any suggestions?).
Lesson #6:
Utilities and bills can take a large percentage of your budget. Even though I only spent $300 on groceries, gas, and personal items, our bills still totaled $450 (for water, trash, internet, cable, phone, gas and electric, not including our mortgage payment) for the month. I was proud to say I stuck to my budget, but the reality is that I didn’t cut back in many areas.
Goal: Find ways to reduce recurring bills. Many utility companies offer online programs that break down your bill to help you understand how you can cut costs.
Lesson #7:
Buying baby items, even secondhand, adds up. I found a great deal on a used high chair on craigslist. I know my parents would have gladly bought us a new high chair, but they wouldn’t consider a “used” high chair as a gift.
Goal: Ask my parents to consider contributing towards a baby fund, separate from a college fund, during birthdays and holidays. If you don’t have kids, consider setting up your own “fun money” account for graduations, birthdays, and holidays – just be sure to thank Aunt Betty for the DVD “she” bought you!
Lesson #8:
Use student loan money for being a student. I received a student loan earlier this year. Like many students, I used some of it to buy a couple new outfits. During No Spend Month, I had to purchase school supplies and pay fees. While I didn’t go over budget, it was still a reminder that those funds were designated for school related expenses.
Goal: Reserve designated funds for their purpose. Even if you aren’t a student, the same goes for an emergency fund or credit card – only use it for true “emergencies.”
Lesson #9:
A homemade sandwich is as good as one from the deli. One afternoon I had to ask my sister for a favor. Normally, I would have offered to buy her lunch, but instead I offered to make her a sandwich and bring it over.
Goal: Find more opportunities to use food and items I already have on hand.
Lesson #10:
Living on a tight budget leaves little room for error. It can be difficult to stretch every dollar. So many people are living from paycheck to paycheck, and a minor financial setback can be extremely stressful. When I had to make additional purchases that I had not anticipated, I became anxious about exceeding my monthly allocation. Luckily, this was only a personal challenge, but in many cases running out of money can mean there will be no meal on the table.
Goal: Be more patient and compassionate towards others. You never know another person’s personal circumstances.
For the past five years, my New Year's resolutions have been a variation of 1) lose 10 pounds, 2) save money, and 3) eat healthier. This year, I'm patting myself on the back and saying, "Job well done!" I think it's as good as it's going to get with these three old resolutions, and it's time to think more creatively.
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