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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My 2003 car goes in for annual MOT test (I’m in the UK) and service next week. Driving an old car has advantages, particularly the fact that it isn’t depreciating any more, but the repair bills can be highly unpredictable!
That’s for sure! My car is approaching ten years old, and my husbands car isn’t getting any younger. So many car expenses! That’s why I have the car repair fund, in case we need a major repair on one of them
I can join for a “low spend”. I am already to committed to taking my MIL to dinner tomorrow, then I have a birthday part next week (have to buy a gift), and a lunch out with friends. I have to buy a tank of heating oil, oh, I am cooking Thanksgiving dinner! I am trying to keep all necessary expenses as low as possible, and I will not buy anything else other than what I mentioned above,
Love it! I think even if you have commitments that result in spending, doing a “low spend” month is valuable. At least for me, it makes me much more conscious of what I’m spending-and forces me to be creative!
I can join for a “low spend” month too! I did treat myself to a fancy face cream yesterday (before reading this post!) but that was paid for from an unexpected payout from an old bank account I had in 2012! I already have some social events booked in – meal out with friends tomorrow, hen (bachelorette) party mid-November, a Christening and a concert towards the end. So my “low spend” month will look like this – no spending on clothes (had my eye on a dress and some boots!), no spending at the shop on my lunch break, no spending on unnecessary toiletries and miscellaneous items at the supermarket.
I feel your pain with the car expenses! Mine is pretty new (2014) but that didn’t stop me popping a tyre and having to have an emergency replacement last month which is also the month my insurance is due – a crash last year, plus a new address plus extra mileage for a longer commute = an extra £200 on my policy and that’s after shopping around grrrrrrr……..
Ugh! Those car insurance costs can be a pain. Glad you’re joining in for a low spend month!
yep, UK insurance is such a pain. I hate the way they bump your premium up by way more than inflation every year just to see if they can get away with it (I got my house renewal quote through this morning grrrrr).
I also feel for you re the car crash. A number of years ago I had a car stolen 100 miles from where I live. It was on a multicar policy covering two cars. The year after they ramped up the premium on the remaining car. I told them that I could understand that if the car had been stolen from my house, that might cause them to reevaluate the risk, but that I couldn’t see how the theft of one car from a location I visited once a year if that could be in any way relevant to my future risk on the remaining car. “That’s just how the industry works” came the reply….
I can do no spend outside of my Thanksgiving Trip. But im going to budget for that to make it as cheap as possible!
Love it!
I’m in! I made $60 yesterday selling stuff I needed to clear out of the garage, so off to a good start.
That’s an awesome start! I’m going to spend time this weekend seeing if there’s anything I could sell.
This is a great idea, Liz! Unfortunately I won’t be joining you, because we have tons of planned expenses for the month (including eating out). BUT, I am going to try to keep my entertainment and extra expenses as low as I can (no random trips to Target, for example). And hopefully we can match last month’s grocery spending at right about $600 (super low for us). Great idea and good luck with your challenge!
That works too! Great ideas.
Will join in, because as the holidays ramp up, my impluse spending tends to ramp up as well. Setting out with a plan, tracking every day and forgiving myself if I slip up should make the difference. Our daughter comes to visit at the end of this month so I suspect there will be some eating out but will plan ahead for that. Anyway, just setting out to keep impulse spending in line will definitely help. Also, sometimes after a no (low) spend month, I really binge out the following month. I’d really like to maintain an even keel throughout this entire holiday season—kind of like dieting, don’t aim to lose a lot of weight during the holidays, maintain and don’t get out of control.
Love your blog!
Love it! And it’s true, you don’t want to trigger “binge spending”.
Great post! Hope to join you for a week or 2 this month.
Wonderful!
I love a good Low Spend month! I’ll bet you’ll see a heap of extra money at the end of the month.
🙂
That’s the plan!
I would like to say yes – I have a plan for minimal unbudgeted spending and hope I can be disciplined to see it through. Small question – if I budget $40 for something and only spend $30, do I spend the $10 as a treat to myself, pay toward debt or save to one of my many funds? I know the choice is mine, just wanted to get your thoughts.
Personally, I would put the money towards my next most important goal. I spend time each year setting annual goals and re-evaluating my long term goals so I have a clear vision for where any extra money should go. What’s your most important money related goal right now?
My most important goal at present is reducing and eliminating debt. I worry though that my austerity budget may be too painful to maintain, while I am learning to tighten my belt. I guess the idea for a treat would feel as if the ‘suffering’ was being lessened. It makes sense though to roll the extra cash into my priority area. I just noticed the lens I’m using – ‘”austerity”, “painful”, “suffering”. First I need to fix my mindset! Hah! *lightbulb emoji Thanks for listening.
The mindset is the most important part. Hopefully you can find a way to make it a fun challenge for yourself, instead of feeling like it’s a pain you need to endure. That’s the perspective I like to remind myself to take, and I’ve found it helps quite a bit. Best of luck to you! 😃