When it comes to money management, one of the biggest hangups that most folks deal with is saving money. But I don’t just mean saving money on your grocery purchases, I’m talking about saving real cash in a real savings account. According to a 2014 study, most American families only have about $788 in their checking account and even less in their savings account.
So, it comes as no surprise that most folks want to know how to beef up their savings accounts in order to be prepared for an emergency or even just to save up for a vacation or something else big – like retirement.
And one of the easiest and quickest ways to get a starter emergency fund started is by going on a No Spend Month. But here’s the thing, a No Spend Month isn’t exactly the easiest thing to just make happen. Here’s how to make it a reality and get the most out of your No Spend Month.
First, what is a No Spend Month?
Okay, so first things first – what the heck is a No Spend Month? It’s a month where you spend no other money – outside your bills (like rent/mortgage, utilities, debt payments) and your transportation and groceries. So here’s how it looks – you’ll still pay all your bills, buy groceries, and put gas in your car/pay bus fare but you’ll avoid purchasing a RedBull while in the gas station. You’ll avoid ordering a pizza out and you’ll avoid going on adventures that cost money…for an entire month.
Not going to lie, this is a challenge but it’s one that if you complete it and you actively put all the money you save in a savings account, you’ll come out way ahead. In fact, one of my clients managed to sock away over $1,500 by doing this for just 30 days.
Think about it…you could have over a $1,000 in a starter emergency fund in 30 days! That’s pretty incredible!
How to get started
First you’ll have to create a budget. You have to know how much money you spend every month and you must make sure you have all your bills accounted for. If you’ve never created a budget before, head here to grab my best-selling budget workbook for free and get started creating your budget.
Once you have your budget in place, you’ll have to make sure you have a plan for where you’re going to put your savings. If you already have an existing savings account you can use that or you can pull out the cash to set aside until the month is over and then open up a savings account to deposit the money in.
Make sure you make a list of everything you plan to spend money on and make sure you and your spouse both agree on the list. For example, my husband is a smoker and so expecting him to suddenly stop to make our No Spend Month possible was just unrealistic. So my husband’s cigarettes where accounted for in our budget and on our list of “approved things to buy” during our No Spend Month.
Things to keep in mind
The first couple of times we attempted a No Spend Month ended up as failures because we failed to plan accordingly. So before you pick a month to be your No Spend Month, really review the month. Think about what all you have going on in the upcoming month – are their birthdays, holidays, back-to-school, anything else?
The reason this is important is because if you’re not careful, you’ll decide to do your No Spend Month only to realize that you’re youngest child’s birthday is that month and therefore you’ll want to spend money on their gift or party. So a little planning can make the world of difference – pick a month where much isn’t going on.
- Make a plan for the money (savings account, cash under the mattress, etc.)
- Use cash (put your debt card in a drawer and make a point to use only cash to avoid overspending)
- Decide what you can buy (this where you list the stuff that your family wants/needs to buy – like my husband’s cigarettes)
- Do not spend money on anything that has not been agreed upon.
- Do not be tempted to stock up on things the month before – defeats the whole purpose.
Will this really work?
Yes, it does work! But it is hard – this makes justifying purchases really hard because you’ve agreed to not spending money which makes it difficult because sometimes wants can feel so much like a need. But if you stick to the plan, you’ll have more money than you though possible saved up in your emergency fund and you’ll have a better understanding of where your money is going every month!
Here’s how to make sure you’re successful
Tell everyone that you’re on the No Spend Month. I know this will be hard but it’s easier than trying to keep it a secret. You can just say, “hey, sorry we can’t meet y’all for dinner tonight. We’re working on a savings goal so we gave up spending money this month to make it happen. We’d love to meet up next month though! When’s good for y’all?”
Make a plan to use up what is in your pantry/fridge/freezer during your No Spend Month. This is the perfect time to eat up all those things that have been sitting in your kitchen just a tad bit too long and would probably continue to sit there until way past their prime.
Make a list of fun free stuff to do with your kids – I literally keep a spreadsheet of ideas that helps me to pick something fun and free to do with my three little kids. By having a list made out beforehand, it’ll make those days where you’re bored or tired and don’t want to use brain power so much easier to decide on what to do.
Also, if you need more ideas on a No Spend Month, grab Living Well and Spending Zero – one of my favorite books on making a No Spend Month a reality!
***Update 10/4/17 I just heard about about CIT Bank now offering a savings account with a 1.35% APY! That’s the highest I’ve ever heard about! I have no idea how long they’ll offer this but wanted to let y’all know in case you needed a great savings account to set up – check out CIT Bank’s account here for details.
What advice can you offer to someone considering a No Spend Month or Spending Freeze? How have you been able to save a $1,000 in a month? Share your tips!
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