No Spend Month: 30 days to a bigger bank account, part 1

This series, By Denise T., originally appeared on Middle Path Finance

Can you go a whole month without spending money on anything other than bare-bones necessities? I didn't think I could either, but last November I wanted to see if it was really possible. It turned out to be a transformative experience that not only boosted my savings account significantly by the end of the month, but also changed the way I relate to and handle my money ever since. These are tough times, especially for the young, semi-hip and artsy. We all need to whip our personal balance sheets into tip-top shape-- pay off debt, put some money in the bank that won't get swept away immediately by bills, and overall try our best to disaster-proof our finances. This is the first of a five part series about my No Spend Month. How we did it, how it impacted us. Hopefully, it will inspire you to do the same.

Part 1, Preparing for No Spend Month

My husband and I have declared November a no-spend month. 

We have budgeted $400 for the month of November. That's all we have to spend. This $400 has to cover everything that isn't a monthly recurring bill.

What doesn't count: utilities, student loan payment, monthly transfers into our emergency fund, 401k, and 529 plan. Baby formula is also exempt. The $400 must pay for everything else: food, gasoline, entertainment, clothes, parking, and anything else we would normally buy.

Considering we easily go through $2,000 a month, it's a steep decrease from what we are used to. 
Why are we doing this?

We've read a blog about a family of three that tried it, and another family that decided to spend nothing-- not even buy groceries-- for two months.  It inspired us to give it a whirl.

With all of the craziness lately on Wall Street, and watching the balances of our retirement accounts dwindle to less than half their value since September, we feel like it's high time we fattened up our emergency fund and learned to live leaner.

We also feel making a diligent, conscientious effort to stop spending might help us slow down, hop off of the consumption train and take a look at where the heck all of our money goes each month. We are generally good savers, but we could be doing so much better. And it seems like we've been spending more and more these past few months.

How will this work exactly? We've laid some ground rules that we hope will help us get the most out of our experience.

First, the $400 will be placed in cash in an envelope on the side of the fridge on Nov.1. We aren't allowed to use credit cards, no ATM withdrawals, and no cheating. This is easy to monitor online. This is the only realistic way we can stay on budget. 

Second, we need a carrot and a stick to help us stay focused. Otherwise, it would be too easy to say "Oh well" and give up.

The stick: For every dollar we spend over the $400 budget, an equal amount goes to a charity that we deplore, one that stands for everything we don't. The idea is to add an extra layer of "I don't want <insert group> to get any of my money, so I better stay on track." The carrot is dinner for two sans the baby at a fancy steakhouse near our house.

Third, we aren't allowed to front-load expenses in October. What is the point of not spending in November if you spend twice as much in October because you know you can't spend anything in November?

The only exception to the stock-up rule is groceries. I re-stocked the pantry with basics only-- nothing fancy-- such as beans, rice, cheese, etc. so that we would have the foundation for what I hope to be many home-cooked meals.

We will have to cook at home most of the month to make this work. We will also have to be incredibly fuel efficient in our vehicle use. We won't be able to drive as much and will certainly have to plan shopping trips so that all stops can be made on one trip. No more running to the store for one item.

We haven't forgotten Thanksgiving either, although it will pose less of a challenge this year. Our annual 1,000 mile drive to the in-laws house has been canceled. We just had a nice long visit with them, so we all agreed that we can pass on Thanksgiving. That does mean we will be cooking Thanksgiving dinner for the other side of the family, and paying for that will be a challenge.

Spending less is a big part of this plan, but we're also going to attack the expense side of the balance sheet. In a further effort to beef up our savings, I will also be examining all of our monthly bills and looking for ways to save. I already suspect our telephone and internet service will be changing post haste.

With the challenge about to begin, I thought I would be nervous about limiting our spending, but actually we are quite excited. I think we relish the challenge. And we suspect it might get us closer to the kind of life we'd like to be living. Of course, there's the risk that this could end in a spectacular disaster.

I plan to outline our progress, our failings, our triumphs and all the gory details once a week on this blog. Maybe I can inspire you to set out on your own month of crash dieting. Or, I might just scare you into being a spendthrift. Who can say.  You'll just have to check back here each week to find out how it turns out.

Comments

[Jeff Paul Internet Millions]

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