We talk about a lot of ways to save money and get the best deal on Frugal Rules, but the absolute best way to save your money is to stop spending it period, ala a self-instituted spending freeze.
Some of us struggle to control our spending on big ticket items like TVs, shoes or designer clothes; others of us battle impulse purchases daily. But how many of us realize how much money we spend every day on little things.
An infographic with data released by The Credit Examiner indicates that around 52 percent of Americans spend more than they earn and the average American spends $1.33 for every dollar they earn. Out of the 52 percent who tend to overspend, only around 13.5 percent adjust their spending the following month to get back on track.
No matter what your spending habits are or even if you just want to save more money, having a spending freeze can be very beneficial to your financial situation.
I tend to have no spend weeks or no spend weekends when I need to reset my finances or reign in my spending. If you’re planning on carrying out a spending freeze, here are five ways to make sure it’s successful.
1. Find the ‘Why’ for Your Spending Freeze
Whether you’re planning to go on a spending freeze for a day, three days, or a week, you need to determine what you hope to get out of it first.
Do you want to save an extra $200 this month, pay off your credit card debt faster, budget better for the holidays or practice being more content with what you have?
No matter what your reason is, you should use it to structure your spending freeze. For example, if you set a goal to pay an extra $200 on your credit card balance this month, you can use that goal to stay motivated when you’re tempted to spend extra money on a nice dinner or an expensive weekend outing.
2. Give Yourself a Reasonable Time Frame
If you want your spending freeze to be successful, it’s best to start out with a time frame that you are comfortable with. While I like to do no spend weeks, I probably wouldn’t make it if I had to do a no spend month. I probably wouldn’t be able to have a successful no spend week during the week of my son’s birthday either since we like to do fun things as a family to celebrate, which might end up costing extra money.
For me, it’s better to budget for special events and holidays ahead of time instead of trying to freeze my spending during that time. However, a spending freeze before the holiday season might do wonders for your finances.
If it’s your first spending freeze, you might want to start out slow and only commit to one day or try to last through the weekend and engage in free activities instead. The choice is up to you but don’t try to stop spending for ten days when you prefer to only do five days because it could backfire and cause you to spend even more money after your spending freeze, which will defeat the purpose.
3. Figure Out Which Spending Categories You’ll Freeze
Some people get confused when I say spending freeze or no spend week because they wonder what the ‘rules’ are. It’s funny, because the rules are up to you. As long as you’re saving money and refraining from spending, there’s no right or wrong way to do a spending freeze. Sometimes, it can even help you see where you’re spending too much money, especially if you combine your freeze with the aid of a free online expense tracking tool like Personal Capital. You could emerge from your spend with new, healthy financial habits.
Depending on your dedication and how many limitations you set for yourself, the results of your spending freeze may vary but it’s the same way with dieting and exercise. If you commit to improving your health by eating nutritious food and exercising four days per week, you’ll probably see some great results after a while.
If you commit to a stricter low sugar/low carb diet plan and take group fitness classes with a certified trainer five days per week, your results might be even better.
When I’m planning a full on no spend week, I usually only do my regular grocery shopping twice a month and only spend on money on required expenses that might pop up during the week like bills, rent, insurance etc. I may also pay for fuel for my car since I do a little driving throughout the week. Otherwise, I don’t spend any money. If you live on a budget this should be relatively simple to do as you should already have the funds allocated for those expenses.
4. Eat Through Your Cabinets
If you like dining out, one of the hardest challenges may be giving it up during your spending freeze. One solution you can try is eating through your cabinets.
Unless you’re a hardcore minimalist who doesn’t waste any food, odds are, you have some food items in your pantry that you’ve either forgotten about or avoided on purpose, especially if you don’t meal plan.
I’m definitely guilty of saying there is nothing to eat in the house (usually when I’d prefer restaurant food) even though there is quite a bit of food in my cabinets and refrigerator that I can piece together to make a meal.
Currently I’ve got rice, beans, pasta and baking ingredients in my kitchen cabinets along with chicken in my freezer which is plenty to make a meal and even some dessert without spending any extra money at the grocery store.
Another thing you can do to create delicious meals from the food you already have is to Google all the food and ingredients you have and type the word ‘recipe’ right after it to see if any interesting recipes come up that you can prepare.
I did this once after not knowing what to do with some chicken, beans, bell peppers and spices I had lying around and a Brazilian stew recipe popped up so I prepared it and my family loved it.
5. Get Creative
Finally, getting creative is key when trying to have a successful spending freeze. Going on a spending freeze forces you to be creative and work with what you have. Just because you can’t spend money doesn’t mean you can’t have any fun or do the things you need to do around the house.
You can look for free events and entertainment in your area, watch tutorials and learn how to fix things on your own, try out new recipes, make gifts and more.
When done right, a spending freeze can help you save quite a bit of money, especially if you do it often. Plus, the creative ideas and solutions you come up with during the time will continue to be more financially stable and help you be more content with what you have for years to follow.
Have you ever done a spending freeze? What would your time frame be if you had to do one? What’s one thing you like to spend on that would be a challenge to give up?