I originally posted this (well, something similar) on Monday, and will try to recreate it now. Who knows, maybe it will be better this time.
Once a year I engage in a practice I like to call Frugality Month. This started back in the mid-nineties after my divorce left me with a mortgage payment, a car payment, crippling credit card debt, and a low-paying job. Like many young people, I had been told that I should save money, but had never been taught to manage it. My parents were great money managers, but terrible teachers.
Anyway, after a particularly bad month I had to sell some jewelry and decorative objects to make my mortgage payment. That scared me, especially when I looked around my (jam-packed) house and decided that I just couldn’t bear to part with anything else, and had no idea how I would if I wanted to (this was before ebay). Oh, how times have changed!
I decided that day, which happened to be January 31st, that the only way I was going to get more money was to spend less money. In other words, live within my means. This sounds like old hat to us now, but this was 15 years ago and I’d never read a personal finance book in my life – were there any back then? I can’t remember. So Frugality Month started the next day – I ate out of my pantry and bought NOTHING that wasn’t absolutely necessary. At the end of the month I had a little cushion in my bank account and all my bills were paid.
I like to continue the practice, even though times have changed and I live well within my means, have no car payment or credit card debt, and have plenty to cover my mortgage and bills. It helps me refocus on my needs v. my wants, and my needs haven’t changed that much. I have to relax it a bit on the grocery front, since my partner and I agree that fresh produce is necessary for healthy meals. Also, now that it is no longer a necessity for financial survival, I can enjoy the process and make a leisurely analysis of my spending habits and where I can improve. I like to think of it as mindful spending – I generally don’t put a lot of restrictions on how or where I spend my disposable income, but I require myself to be aware of how I use my money and consider the consequences.
I would suggest a Frugality Month for anyone, or a Frugality Week if you find a whole month intimidating. A lot of personal finance writers recommend tracking your spending for a week or a month, writing down every penny you spend every day. Then take a look at where your money is going and figure out what you could cut out and how much you would save, and use that information to plan your budget. What a pain in the ass. Seriously. And at the end of that little experiment, that money is still spent. Gone.
I say, don’t spend it to begin with. Make a commitment not to spend on anything other than your bills, gas for the car or busfare, and minimal groceries. Carefully consider every penny BEFORE you spend it. Stay away from the places you know you have a weakness for. THEN, at the end of the week or month, look at the extra money in your account and actually SEE how much money you save not spending it on those things. Consider how your daily life and happiness were impacted by not spending, and be mindful of that as you budget or spend in the future.
I would love to hear the experience of even just one other person who tries this, and how it impacted their spending habits.
