I don’t know about you, but I’ve got some big expenses here. New tires for my husbands car – $510. A new oven door, because our oven door glass shattered – $330. Carpentry repair for the stairs my dog broke – ???. Christmas is coming. And I want to cap off my kids college savings for the year. To help pay for these and still hit my goals, I’ve decided to try a “no spend” (really low spend) November. Who’s with me?
Sinking Funds vs Cash Flow
I’m fortunate that I have enough in savings to pay for these without an issue. I remember very well back when that wasn’t the case, though. Costs for new tires could wreck the whole budget for months. The oven door might need to stay unrepaired for a while waiting on enough money to fix it. And Christmas, despite coming at the same time every year, could be a real painful time. My husband has a large family, and all in all we get gifts for about fifteen people.
I’ve learned a lot over the years about managing budgets and irregular expenses. One of those sad parts of being an adult, especially an adult with a house and kids, is that you need to pay for things that you’d rather not.
I don’t particularly enjoy buying new tires, but I do enjoy my kids having a safe car ride. That oven door isn’t going to “bring me joy”, but having my door explode with shattered glass gives me a lot less joy. And there are a lot of things I’d rather buy than having to fix the stairs that my dog broke (?!?) but I also don’t want them to collapse. So these are things that need to be done.
Of course, there are expensive ways to do these things, and less expensive ways. We can shop for a good price on the tires, and when they accidentally replace the tires with the more expensive ones, insist on the ones with the better price (and surprisingly, be given the expensive ones at the cheaper price). We can replace the oven door for $300, instead of replacing the entire oven for $1,200. It’s a double oven, because the house we moved into twelve years ago had a double oven. Replacing it with a single oven would require remodeling the kitchen. And we can use an excellent carpenter who we’ve used before, to repair the stairs instead of replacing them entirely.
But once you’ve gotten a good price, the expenses still need to be paid. So how to do that?
These are expenses I classify as “expected unexpected” expenses. If you own a car or home, they will need repair. Just like pets will require occasional expensive care, you’ll sometimes need to replace your clothes, or your kids will sometimes need something (even if you don’t know what it is).
I typically handle “expected unexpected” expenses in the same way I do “expected occasional” ones (like Christmas and car taxes). I handle them through sinking funds.
What’s a sinking fund? It’s a special savings account where you set aside money regularly to save up for an irregular cost. Maybe you put aside $10 per week into a pet fund, $25 a week for Christmas, or $50 per paycheck for car repairs. The bottom line is that you put money automatically away regularly, so when you incur an expense, it doesn’t impact your monthly budget.
Paying from cash flow, on the other hand, means putting that item into your monthly budget. I do usually leave breathing room in my monthly budget for the unexpected, so I don’t have to touch my sinking funds. This allows them to continue to grow to be able to handle a more significant expense. And that’s why I’m doing a “No Spend November”.
What Does No Spend Mean?
No spend doesn’t literally mean I’m not going to spend anything. After all, we need to eat. Unfortunately my electric bill, phone bill, internet bill, oil bill, and mortgage all still need to be paid. I can’t just call them up and say I’ve decided to have a no spend month, so good luck!
Although that would be nice…
Instead it means being very intentional about what we’re spending, and reducing (mostly eliminating) optional expenses. No eating out – meals at home and packed lunches will be the plan. We won’t pay for weekend activities, instead seeking out fun and free things to do. No picking up clothes, shoes, etc. It’ll be a bare-bones month.
Even needed expenses will be reduced as much as possible. Food is a need, but there are ways to reduce the costs of food. Gas is a need because we need to go places and can’t walk, but we can reduce the amount of driving we do. A no spend month is also a good month to look at recurring bills and figure out if a better price is available elsewhere.
A no spend month is a good opportunity to look at your cell phone bill, cable, car insurance, etc. and shop around for a better price. If you can get a better price on a recurring expense, you’ll be able to capture those savings every month going forward.
Obviously a “no spend” month is better classified as a “no optional spend month”. But that’s not as catchy.
Top Tips For A Successful Month
If you’re interested in joining me this month, here’s my top eight tips to be successful:
- Make a budget. Hopefully you’ve always had a budget for your expenses, but if not, a no spend month is the time to make one. You’ll want to have a good handle on your “bare bones” expenses so you’ll know what you need to spend. Plus you’ll want to see if some of your “bare bones” expenses could be changed or reduced.
- Track everything. Even if you don’t usually budget, or track your expenses, I highly recommend doing so during a no spend challenge. Why? Well, how else will you know if you’re on track? Track everything you spend money on, even if it’s a $1 candy from the vending machine. You’ll want to look back at the end of the month to see how you did.
- Look for ways to make money. A no spend month is a great time to make some additional money. Why? It increases the gap between your income and expenses, meaning your savings at the end of the month will be larger. Take a look at your health insurance – do they offer any incentives you can get that you haven’t already? Is there something around the house you can sell? You want to end the month with as large a gap as possible.
- Look for ways to save money. Your fixed expenses aren’t always fixed. Yes, you have to pay the electric bill – but you can make sure to turn off the lights more often. Same with your water, and heat. You can negotiate or shop around your cell phone bill, internet, cable (if you still have it?), car insurance, home insurance, and so on. Take a look at each and every “fixed expense” and figure out how to bring it down.
- Figure out your exceptions ahead of time. Obviously I already said I’m paying for an oven door repair and carpentry. I’m also going to start Christmas shopping this month, and add to Nintendo Christmas World, but that money will come out of my Christmas Club sinking fund. If you decide to do a no spend month, but you already have some expenses you need to address, don’t be afraid to set guardrails on your experiment. In the end you’ll still be financially better off than you would otherwise.
- Don’t let mistakes derail you. Especially if it’s your first time through, you’re going to make mistakes. You pick up some mints at the gas station while you’re filling up. You buy a bottle of water because you forgot your refillable one at home. Or other mistakes. Don’t let it make you give up on the whole idea. Instead return it (if you can) and just move on.
- Try new things. This is a great month to try something new. Make bread at home. Go check out that free museum you’ve never been to. Create a fancy at-home meal for the cost of a fast food one. Invite friends over for a board game and potluck dinner. Challenge yourself to break out of that rut and comfort zone, and give something new a shot!
- Have fun with it! No need to sit at home in the dark and freezing cold, eating nothing but beans and rice all month. Get creative, seek out new ways to make and save money, and focus on the fact that you don’t need a money to have a good time.
Who’s With Me?
I’m going to check in every week this month to see how you’re doing. Want to join in my challenge? Let me know in the comments here, on Twitter, Facebook, or Instagram, and I’ll check in with you each week (linking to your site/social media handle if applicable). I’ll also talk about my successes – and failures! – as we go through the month. Make sure you’re following me on social media so we can do this together! Be sure to pin this for later if you don’t want to forget about the challenge.
Let’s have some fun with this! Happy Friday!
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