As part of my self-directed and self-imposed self-improvement month, I am aiming to manage another no spend month. This is a follow on from a decision I made a couple of months ago regarding the amount of money we were wasting on stuff that didn’t really matter.
To be fair it isn’t a month where no money leaves our bank account bound for exotic destinations like the supermarket or the fruit and veg market. It’s a month where all unnecessary spending is stopped. Altogether.
Knowing human nature though, this idea of only all essentials being allowed to flutter out of the bank, is modified somewhat to ensure that there is no sense of deprivation. Deprivation is the enemy of staying on track and not going on a nasty pendulum swing from scrimping to splurging. So we have a few simple rules around those items that are, essentially, discretionary spending.
- A maximum grocery budget – cash only, no cards.
- A personal “sanity money” allocation. This is the anti-deprivation key.
- Any existing appointments are allowable, but no new ones to be made in the month.
These are the main rules, but there is plenty of scope for personalising. Depending on what I know is coming up, I also make allowances for any educational costs, and similar. I also allow for the use of existing gift vouchers, should we need any items that can be covered by them.
If the idea of working on your own financial fitness appeals to you, then you can set your own rules. Mine came about from seeing where the main areas of overspending were occurring. They also came about from the desire to not trudge through the next dozen years watching the mortgage slowly decreasing while I made our bankers a handy profit.
My trial month gave me something of a surprise. I thought I ‘knew’ what our maximum savings amount was going to be, based on many years experience of tracking, but following the basic rules proved me wrong by a fairly substantial amount. Then I extrapolated that unexpected result out to discover that we could, with no consideration made for the reducing interest as the balance shrinks, cut approximately two years off the length of our mortgage – and we all know that means some serious savings on interest.
So the race was on – could we live on 50% of our income and save the rest?
The answer was – yes. Yes, we pretty much could.
September will be my attempt to recreate that rather stunning result. Feel free to join me, the more the merrier.