Not Spending = Saving, right?
This is happening! I embarked on an Adventure in Austerity (not to be confused with a Spending Fast, which is a trademarked phrase created by the brilliant Anna Newell Jones of And Then We Saved)!
One of my New Year’s Resolutions this year was to reexamine my spending habits and jump-start my savings. I struggled with the decision to freeze my discretionary spending, because it’s hard. It means spending money only on essentials and exercising a lot of restraint. I realized it would be easier to start if I took a month to prepare by making a list of things I wanted (like new Chelsea boots and a harmonium) and upcoming expenses throughout the year (yoga insurance renewal, contacts). I evaluated the “wants” and chose a few things to purchase, and I planned out the upcoming expenses so I’d remember to budget for them. I think this really helped, and not just because I now have a nice pair of boots that I wear almost every day and a harmonium I play every night. The process of prioritizing and scheduling things out was useful.
Because I’ve been living partially on savings and my (very low interest) credit card for the last 5 months, my bank accounts are basically down to $0. I’m starting from scratch here, but that’s okay. I just got my first paycheck from my new full time job and I am so excited to put a big chunk of it into savings!
It also helped to set goals.
My Savings Goals
- Get my Emergency Savings back to $1000. It has pained me to watch this dwindle. I had to dip into it for essentials each month that I was underemployed, and at this point it is down to the minimum account balance requirement: $25. Ouch.
- Pay off credit card debt. At the moment, this is at an all-time, scary high of $2100. I didn’t touch the thing in February (another reason my Emergency Savings is gone). In the interest of full disclosure, I might make one final purchase on it before laying it to rest for the next 6 months: $200 plane tickets to Iceland. Which brings me to my next goal…
- Save up for birthday trip to Iceland. Yes, my priorities could be better. No, I am not going to reconsider. This, also, is happening.
- Build 3-6 months of Emergency Savings. This is 3-6 months of what I would need to live off of if I had absolutely no income. I’m estimating that 3 months would be about $4500.
- Build General Savings, or save up for more specific goals (buy a house?! Is that crazy?!).
- Don’t increase spending just because income has increased. In order to save money, I have to stick only to planned purchases. This means budgeting based on my anticipated needs rather than leaving in extra “just in case” cushioning. Living on less these last few months has helped me to trim some fat from my budget. For instance, I’ve reduced my food budget by nearly half since this time last year. I’ve also cut way back on miscellaneous personal items like toiletries, and I rarely buy clothes or home-goods. Now I have a better idea of what I need to budget for based on my needs, not my desires, and on m
- Set saving priorities–and get excited about them! See above for goals.
- Set spending priorities. Determine needs v. wants. I use the word “needs” loosely to define things I am not willing to part with, such as sewing club, acupuncture, and Netflix.
- Shop with intention. Have a plan! Make lists! Stay on task!
- Think before purchasing. Take a moment. Count to 10. Breathe deeply.
- Don’t shop when hungry or stressed.
- Make do and mend, reuse creatively, make things, use what you already have, borrow from friends, and find free things to do!
- Think of this as an ADVENTURE!
THIS IS HAPPENING! I started March 1st. I have paid for gas and my sewing classes (needs) but have refrained from buying some fantastic rayon-cotton blend jersey fabric that is on sale and would look gorgeous as a tee shirt dress, but that is categorically not a need. I have plenty of sewing projects lined up to keep me busy for months, and I already own the fabric! It’s the little victories, you guys.
How do you feel about saving? Is it easy or difficult, or have you never considered the fact that you’re 31 and have $40 in your Simple IRA account?!?!