I’m starting 2017 off with a bang. Or rather, a ban. A spending ban!
Throughout the entire first quarter of 2017 (January, February, March) i’ll be restricting my spending to necessities. Why on earth would I do this? How is it possible? I’m about to lay it out for you all (without giving away too many $ specifics) and I’ll be sure to check back at the end of the quarter to let you know how it all worked out with updated tips!
Why am I starting a spending ban?
I plan on buying a house this year. I’m participating in a grant and the money is available to me starting April 1st. Side note: If you’re interested in buying a home but you don’t think it’s something you can afford check into your community as many have first time home buyer programs. The way my grant works is that I save up a specific amount for 10 months and they quadruple it. You heard that right, quadruple. It ends up being around $9,400 that I can use towards closing costs, inspections, or even as a down payment if i’d like.
While that’s amazing, I still want to put down some of my own money on the house. I have a set goal that I want to have in my savings so that I can put a certain amount down and still have a safety net. Because I want to have a set dollar amount in my savings by the end of March, I need to put myself on a spending ban to get me up to where I want to be.
How I’m starting and how you can too!
First of all, set a dollar amount that’s doable.
You want to pick a goal that’s difficult but still attainable. The dollar amount will depend on you and your lifestyle so don’t get crazy and set a goal for 2 thousand if that’s not realistic. It’s important to set a challenging goal but it also needs to be something that’s doable. Go over your budget and see what you can realistically save if you don’t spend your money on inconsequential things like going to the movies.
Go through your budget and decide what is a necessary expense and what isn’t.
Obviously bills are non-negotiable. They have to be paid. Food needs to be eaten, and car expenses have to be taken care of. Basically everything else can go. I don’t need to go to Target, I don’t need to go out to eat, and I certainly don’t need to buy snacks or coffee at work. If you want to go a step further, cut out cable if you can. Check out your phone bill and see if you can change your plan. Turn your heat down. Every little bit can help you save a few bucks and over time that really adds up!
Set an allowance.
You can’t just not spend any money for three months. Dinner with friends will be tempting, a car will need an oil change and an ice cream might just be what the doctor ordered on a crappy day. Set up an allowance to account for those things. I already set aside $40 from each of my paychecks to go into a vacation account and I’ve decided that for the next three months i’ll be allowing myself to use that as my allowance. If I need a new toothbrush, a dinner with a friend or just really need to go to happy hour I can use my allowance and not feel guilty.
Cash is king.
Keeping your allowance in cash helps you to realize just how much you’re spending. I always keep a credit card on hand for emergencies but I leave the debit card at home. It’s too easy to swipe. I suggest taking your allowance out of the bank at the beginning of the month. You’ll know exactly how much you have to spend so you’ll end up being more frugal. Any extra at the end of the month can be deposited into your savings instead of rolling it over.
Keep the temptations away.
Lots of stores have sales right after the new year. Unsubscribe from emails, uninstall any shopping apps on your phone and don’t clip any coupons! Just because something is on sale doesn’t mean you’re saving money. If you weren’t going to buy it in the first place you aren’t saving anything. Use a holiday gift card to shop if it’s an absolute must. I don’t want to go three months without new makeup or clothes but I know I’ve got plenty of both.
Eye that checking account.
If you’re like me, you pay all of your bills online. To make things easier, add up what you need to have to pay your bills for the month and transfer the rest out into your savings. If you’re on a bi-weekly pay schedule figure out what bills get paid out of which check and transfer the extra to your savings accordingly. The less extra money you leave in your checking account the less likely you’ll be to spend it. If you can, setting up automatic transfers into your savings account will greatly help.
That’s it! For now anyways. Those are my basic tips on how to put yourself on a spending ban. As I go through these next three months i’ll be sure to update this post if necessary and come the beginning of April there will be a full report on how this worked out for me with updated tips on how to help you save some extra money!
Let me know in the comments if you’ve ever put yourself on a spending ban and how it worked for you!