With all the talk of fashion diets and shopping diets, I’ve been looking at my own saving efforts as a “spending diet.” Just like with a calorie/food diet, you cut back on indulgences for the sake of an ultimate goal. But on a spending diet, instead of losing weight, you gain more cash in your savings account!
My latest savings goal is to have hefty down payment for a new car in the spring, so I’ve been looking for ways to restrict my non-essential spending. Here’s my method: each pay period I take a small amount of cash out of my account for discretionary spending, forcing myself to live within my “cash-only” budget. Whatever is leftover in my account by next pay day goes into my savings account. This way, if I incur any emergencies (car repair or vet visit, for instance), the cash is available to me without having to tap into my savings (which always feels like a setback).
Photo by James Dempsey via Flickr
Forcing myself to spend less has led to some creative coping strategies — more cooking at home, driving less (and biking more) to run my errands, and finding inventive ways to entertain myself at home rather than going out.
And through my “diet” experiment, I’ve discovered several things I could easily live without. Allow me to share my “fatty foods” of finance:
- Morning coffee stop — Some people (me for instance) are in the habit of dropping a couple of bucks on a coffee on their way to work. Seems like a harmless indulgence, really. But when you only have a limited amount of money for extras for the week? Well, you may find yourself wanting to put those bucks — which add up — toward something more substantial.
- Landline — I really wasn’t using it that much anyway, and have hardly missed is at all. If you have a cell phone, just get in the habit of using it for all your calls! Or check out Skype if you really want a separate phone for home. Just link your Skype account to your home computer for your entire household to use. The cost of a Skype line is only a small portion of what you’re paying the phone company.
- Lunch out — Don’t get me wrong, getting out of the office is a great way to recharge and break up the day — and bond with your coworkers. But while the weather’s still nice, why not take your lunch to a park and get the same benefits with none of the expense? When I went back and really looked at my budget, cutting lunches out from 3 times a week to once a week put $100 a month back into my pocket.
- Cable TV — I can hear the gasps now at such a suggestion. TV has become such a part of our common language, that suggesting to cut it out is sort of like suggesting cutting out electricity. But trust me, a lot of entertainment value can be had from a subscription to Netflix or Blockbuster Online (a fraction of the cost of a monthly cable bill) and trips to the library for DVDs (and books! Remember books?) . If you’re serious about a saving goal, just try living without Cable for a couple of months. You’ll be surprised at what you can find online for free, and how enjoyable it can be to enjoy your family’s company without staring silently at a screen.
- Nights out — Instead of going to the movies, why not host a movie night at your house? Instead of going to a bar, host a board games or trivia night. Have your pals bring the beer. Or even if you buy some booze, it’s sure a lot cheaper to drink at home! For a few months, try to reserve “going out” only for special occasions, and reward yourself with a night on the town when you’ve reached your savings goal.
- Seasonal wardrobe updates — Yes, it’s fall and you want that cute new swing coat and some trendy boots with just the right heel! But as a savvy shopper, you also know that by February that same coat will be 75% off. They key word here is “want” — as opposed to “need.” Don’t let your savings account be a fashion victim. Be strong and hold out. Create a wardrobe budget and make the most of it by buying off season (for instance, fall is great time to get a killer deal on swim suits and summer dresses).
- Retail therapy — When you find yourself lusting over a spendy item, curb your urge to splurge by walking away and sleeping on it. Consider how many hours of work time it will cost to have that object of your desire, and see if you still think it’s worth it. And when you find yourself really in need of something, check out your local Freecycle network before you run out and buy it at top dollar. I’ve been fortunate enough to find free, gently used dogs crates, patio furniture, and blinds on Freecycle. I’ve even painted rooms in my house with donated paint!
There’s the diet plan, folks! If you’re looking to put away a couple hundred extra bucks a month, consider this list your money-minding menu! If you have a serious, pressing savings goal, you’ll surely find even more ways to cut back. And remember, just like the satisfaction that comes from shedding extra pounds, you’ll likely find the rewards of sticking with your plan well worth the sacrifice! And you may even adopt healthier long-term spending habits!
R. Rebecca Carter is a writer for Quicken Loans and writes about personal finance, FHA loans and home refinance. When she’s not balancing her checkbook or rearranging her 401k contributions, you can find her walking her dogs and planning her next budget vacation.