You're familiar with month-long challenges designed to improve your wellness in some way, whether it's reaching a goal, creating a new habit or breaking a bad one. Maybe, despite your best intentions, you've even failed at a few (30 days of squats – why?).
Well, we’ve got a challenge to help you with your financial wellness this year and we're calling it "no-spend January". The premise is simple – go on a discretionary spending diet for the month, gain awareness of your finances and hopefully some extra money by the end. And to increase your chances of success, here are some tips to make this "new year, new (financial) you" stick.
Set a goal
Before you jump on the challenge bandwagon, stop and consider why you're doing it. Are you trying to pay down debt? Save for a big purchase? Adjust your spending habits? These are all good reasons to participate in no-spend January but clarifying your goal upfront will set you up for real success.
Every time you're faced with a spending decision, ask yourself if the purchase helps your progress towards your goal. Hint: often the answer will be no, and that split-second question is all you need to remind yourself to say no.
Decide what's non-negotiable
So, you've decided to embark on a spending freeze, and you've set a goal. Now it's time to take the first step to prevent a spending relapse (spendlapse?) by being realistic about what you can and cannot go without.
Can't give up your daily latte? Don't. Aren't willing to sacrifice your weekend binge-streaming? You can keep Netflix.
It's okay to continue spending on the things that are important to you but it's all a compromise. Laying out your non-negotiables helps you identify where you have opportunities to cut back. For example, if you're committed to your Starbucks habit, then give up eating out for lunch.
Pro tip: try to limit yourself to three non-negotiables – staying focused on your goal will help!
One of the easiest ways to stop yourself from spending money hastily is to be prepared. This is especially helpful when it comes to meals. Food costs are rising and spending money at restaurants or on delivery (we see you Skip the Dishes) is expensive.
Here are some tips for preparing your pantry and avoiding a last-minute swipe:
- Stock up on basic meal staples, like breakfast items, spices, rice, pasta and frozen veggies.
- Look up fun new recipes (Pinterest here we come) and meal plan for a week.
- Set aside time once a week to purchase any fresh ingredients you need.
- Repeat steps 2 & 3.
Another helpful tip is to pre-pay for expenses you can calculate for the month. Going back to the latte example, if you know you're going to buy one per workday (20 in the month), then you can purchase a gift card for the amount you'll need to last a month ($100 at $5/latte). Since you'll only have that $100 to spend, it'll be easier to avoid impulse purchasing, say a muffin, because that would mean sacrificing a day's worth of coffee (not worth it).
Remember those non-negotiables you laid out? Maintaining your social life is important because your friends and family often act as a support system, plus you won't feel like you're missing out on the things you'd normally do (FOMO not required).
Instead of having social time default to paid activities, why not check out what free events are happening in/around your community. Visit your city or community's website for links to different activities, or see what's coming up on Servus's events calendar. When it comes to social gatherings that center around meals (aka the best kind), hosting a potluck is a trusty go-to, rather than paying to dine out.
Have a plan for what's leftover
By the end of January (if all goes well), you'll have a tidy little sum of money sitting unused in your chequing account. Don't miss out on the chance to make the most of it! Check out some saving or investing options and put your money to work earning interest (or earning you a chance to win $1 million in The Servus Big Share™ Contest).
No-spend January doesn't have to end on February 1. Take the tips that work best for you and carry them forward year-round.