Every year, after the holidays are finally over, I go on a 30-day spending detox.
I do it for three reasons: First, it’s an excellent way to boost my bank account. Second, it resets my money mindset for the New Year, forcing me to use what I have. Third, it commands the same discipline that my January fitness routine requires — and that means I’m going to improve both my physical and financial fitness at the same time.
Turning the taps off when it comes to spending can save you hundreds, sometimes thousands, of dollars. That money can be used for important things like saving up for a trip, paying off debt, or my personal favourite, investing for your retirement.
Interested in the challenge? There are three rules:
1) Stop spending money on anything that’s not essential
2) Set up regular e-transfers into your savings account daily or weekly
3) Pay your normal bills and budgeted expenses like rent or groceries
Not sure where to start? Here are some tips to get going:
Eat at home and pack your lunch. Meals out are a major budget killer. Make your own food daily. This means you’ll need to be more thoughtful in your meal planning and go to the grocery store with a list that you can actually stick to.
Use up what’s in your pantry and fridge. We all have a can of lentils, a package of pasta or a rutabaga that’s been pushed way to the back. Dig all that food out and look up recipes that use those ingredients.
Inventory your household supplies before buying another package of toothpaste or container of laundry detergent. Use up your stockpile of household supplies — soap, toothbrushes, deodorant, paper towel, cleaning supplies and more.
Cancel unnecessary subscriptions that automatically hit your bank account or credit card. Sure, it’s nice to have multiple streaming services for shows and music and fitness motivation. But chances are you don’t need them all. Subscription costs can be small, but when you add them all up, they can total hundreds of dollars a month.
Get fit at the same time. Use up your gym membership or class passes. Follow free YouTube workouts. And, if you happen to live in a condo with a gym, use it.
Create new outfits from your current wardrobe. This is a great month to pull everything out of your closet, purge what you don’t need, and find ways to pair new styles with classic favourites.
Entertain yourself for free. I know it’s cold, but it’s still a great time to bundle up and get outdoors. Head out for walks, runs, hikes and bikes. Cruise through local festivals. If you have kids, go to the local library for free programs. Host meals rather than go out with friends and ask your guests to bring a dish like dessert.
Calculate your savings and e-transfer them into your savings account.
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When I do the 30-day no-spending challenge, I save about $25 per day, which adds to $750 throughout the month. Because I don’t pay banking fees to transfer money from my chequing to my savings, I e-transfer whatever I save into my savings account every day. You can do the same. Add up what you would have normally spent, $5 on coffee and $15 on a lunch, for example, and transfer that money into your savings.
When the 30 days of no-spending are up, you’re going to have a nice stash of savings which can be used for upcoming travel, for a rainy day or for your RRSPs. You might also discover a few new opportunities to permanently improve your spending habits. But whatever you do, avoid squandering your new hard-earned savings. Be thoughtful about what the money is going to be used for.