Take a Spending Holiday
Posted by John Draper | Filed under Good ideas
Simplification is all the rage. And a good thing too. With the economic situation as it is, we had better learn to take pleasure from the simple things if we want to a) survive, b) keep our sense of balance, and c) be able to sleep at night.
Before the advent of retirement savings plans, government pensions and a social safety net, most people had to save without incentive by living modestly. Frivolous, uncontrolled spending was virtually unheard of because the risks were so huge. If you go into homes that are 60 years old, the cupboards are tiny. That’s because nobody had much stuff. Kids slept two or more to a room, sometimes to a bed. (Warm and cozy, eh?) And people made do with just one or two of anything.
So, how many different pots do you have in your kitchen? How many pairs of shoes do you own? What about sweaters, t-shirts, pants, skirts, bottles of perfume, ties, scarves, purses, face creams? How about CDs and DVDs? What about sound devices like radios, stereos, ipods? How many telephones are there in your house? How many TVs? How many tools, hair clips, sets of dishes?
How much of your life’s energy have you converted into STUFF?
Never mind beating yourself up for past spending. That’s a waste too…of energy. But think about what you’ve been spending, and what you might need that money for in the future – like food or medical care. Think about how much you already have and whether you actually have to spend any more money for while. If you decide not, then maybe it’s time for a Spending Holiday.
Figure out what it takes to live modestly for a month. You’ll need to cover your regular bills like mortgage or rent, utilities, car payment, gas for work, food. Once you think you’ve got the bare bones covered… the BARE BONES people… then look at how much cash you think you’ll have to spend (since many bills come right out of your account.) Planning to spend $600 this month on everything from groceries to gas to your sister birthday present? Cut that in half and challenge yourself to live on less.
Before you throw your hands up and say, “Ridiculous” just try it. There’s no failure here. It’s an experiment. It’s to see if it can be done. After all, even if you miss by $150, you’ve still spent much less than you thought was possible. Hit the mark and you’ve experienced living modestly and saving money at the same time. Double Whammy!
How much could you save every year if you decided to live modestly? How much less crap would you have? How much happier could you be?
Save just $200 a month by living modestly, put it in an RRSP earning an average of 5%, reinvest your tax refund, and in 25 years you’ll have $90,000. Save $300 a month and you’d have $134,000. Save $500 a month and you’d have $224,000. OMG!
Living modestly usually means battling the motivators to spend: advertising, friends and their new acquisitions, the mall. It often means taking a little more time to find what you need, and really really really wanting it before you buy it. And it means being willing to accept that what you already have is good enough.
So, here’s the challenge, set yourself a period of time during which you’ll take a Spending Holiday. Do you think you can last six months? Three? One? Whatever you believe will get you thinking, make a commitment to yourself to Not Spend Anything. Then report back on how long you lasted. You won’t get any boos or hisses from us. Just attaboys for trying and for being willing to share your stories. I’ll post again in a week or so to remind y’all to fill us in on how your Spending Holiday is going.
November 4, 2008 at 7:56 am
My budget is getting pared down all the time, but I take this one on Gail! I like challenges! I’ve designated days devoted to not spending money (thanks to saving 4 later for that tip). It makes me sit down and decided the 5 W’s. (who am I spending on, what am I spending on, where am I spending my money, when am I spending my money and why am I buying that item? I still slip from time to time, but I’m getting better, and I’m teaching at the same time.
November 4, 2008 at 9:25 am
What a coincidence. I gave myself a similar challenge for the month of November after I read in the local paper (by the way I am living in Singapore) a month ago about how a family of five (Dad is the only one working) survived on S$300 on food for the whole family. That is not a lot of money for food and I was thinking about it for several days, wondering how they managed. I was also very embarassed cuz I easily spend that same amount on one meal out with family and friends and here is a family living on that same amount each month. So what I have done is roped in the family and we gave ourselves a budget of S$300 for food. It meant cutting down on things and I am using some of the tips I picked up from the show and your site (e.g. grocery shopping with a list – instead of going to the supermarket with no idea what I am going to get, writing down everything that we spend etc). It is very tough (and it’s only Day 4) but it makes us THINK before we spend – is it a NEED or WANT? Is it a MUST HAVE or GOOD TO HAVE? Will be interesting to see how it goes at the end of the month
)
November 4, 2008 at 11:02 am
Liz in Singapore – good for you! My suggestion is to chop from your grocery budget everything you can make yourself – like cereal (make homemade granola) bread and all baked goods (muffins, cookies, pizza dough, pita bread, bread rolls), snacks, (like salsa, hummus, guacamole, trail mix), desserts and sweets, even yogurt. And find a way to make meals out of cheap products – I”m sure this is different in Singapore than here, but if you plan meals around what is plentiful you can really stretch your dollars. GOod luck!
November 4, 2008 at 11:08 am
oh what a great challenge!
google “the compact” a group who has pledged not to buy anything new for a year.
November 4, 2008 at 11:13 am
This is very timely for me, Gail, as I decided at the end of October to dedicate November as a month of ‘no unnecessary spending’. I set myself some rules to follow and am looking forwad to this challenge. Challenging myself to 6 months or 1 year was just too daunting for me so I am starting with one month and will hopefully extend that to another month, and another, and another.
November 4, 2008 at 11:35 am
Yesterday, I was thinking of suggesting that for building an emergency fund and deciding what is 3-months’ worth of essential expenses!
November 4, 2008 at 12:45 pm
Gail – please don’t shoot me but if everyone stops spending our economy will grind to a halt and we’ll all be unemployed. Stop spending irresponsibly seems a more appropriate message — but if you just won that $40M lotto 6/49 jackpot I don’t think there’s a problem with a little spending. Just my two cents (does that count as spending? )
November 4, 2008 at 1:21 pm
I have done this before, for a month, and did quite well, so I’m going to try this starting in the new year and give myself a 3-month time frame! Up to that point, I can shave my budget, but starting January 1 NO unnecessary spending!
I’ve said it now
November 4, 2008 at 1:22 pm
I have done this before, for a month, and did quite well, so I’m going to try this starting in the new year and give myself a 3-month time frame! Up to that point, I can shave my budget, but starting January 1 NO unnecessary spending!
November 4, 2008 at 2:08 pm
Great challenge Gail. I decided a couple of years ago that I wanted to live more simply. A memorable activity was removing from my bedroom every item that I didn’t love. The shift to simple living has been transformative. Not only is my pocketbook more robust but I am definitely happier and healthier. I don’t think we realize in this culture how much energy we waste on stuff and how that drains us.
November 4, 2008 at 2:51 pm
Just cut my food budget by 33% and am looking forward to the challenge. Thanks for the idea. btw, my mother has made the same but in her food budget and found she spent less than her lesser amount was! Time to get the sale flyers out and the cookbooks to plan and scheme. I’ve also been making double meals (stews, soups) and putting the second meal in the freezer … now where to get a great deal on another freezer?????
November 4, 2008 at 3:08 pm
How about 1 day of not spending. Buy Nothing Day is on November 28.Check out Adbusters.
November 4, 2008 at 3:22 pm
Hey Geoff you have a good point!
I was just thinking about that the other day. Me and my husband have been working to cut costs but we were saying the government must hate people like us. They want people to get out of the house, eat at a restaurant; drive to places and buy gas; go to Costco and go crazy on buying stuff you don’t need, etc. But personally I don’t see a lot of people cutting back – at least not here in Vancouver BC. There is just too many people who spend spend spend and will not cut back. So don’t worry, I think most there is a balance of savers and spenders… in fact more spenders than savers.
November 4, 2008 at 3:54 pm
@ Sarah — thanks but it’s not the government (per se) that wants/needs people out spending — it’s the restaurant owner, the mall, costco, etc. My only point is that “spending” in and of itself is not a bad thing. “spending” + “irresponsibly”, “spending” + “500% of monthly income”, etc are bad things. I’m not going to feel too bad for buying a candy bar on my way to a second job, for instance and the concept of not buying anything for a fixed period of time seems weird to me. However, the concept of never buying anything I can’t afford seems rational, that’s all.
November 4, 2008 at 4:33 pm
Love this post! So inspiring!
I have to remind myself now and again that I shouldn’t be comparing our stuff to their stuff(neighbor, whomever) as I really don’t know what issues or lack of emotional strength or whatever someone may be dealing with when they’re buying scads of stuff and having the latest whatever. It’s too easy to assume that they’re great at budgeting and can AFFORD what they’ve just bought. Sometimes people shop for what they’re lacking internally and it just doesn’t work so they buy, buy, buy some more.
Great reminder that we can always pare down what we have and we are so thankful for what we do have. Being thankful is key to living with less.
November 4, 2008 at 4:43 pm
Timely challenge Gail. I got jars out on the weekend (a first) and decided to give it a try for November. I’m hoping it will snowball through the coming year.
I applaud those who have decluttered and live more simply. In my mind I know this is how I want to be. In my heart, as a sentimental fool having grown up with my Mom’s antiques, it’s hard for me to get rid of my inheritance. However, I have given myself one year to go through everything and decrease what I have, only keeping things I really, really love. I don’t think a year is too long – after all, it took me over a year to go through my parent’s house the first time for two sales. And my guilt for that is still strong.
Geoff, I hear what you say. Responsible and saved for spending is the key.
November 4, 2008 at 4:50 pm
Catherine, I can identify with how difficult it is to let gor of your parents thing. I lost both of my parents within a two year time frame and my sisters and I cared for them both until their gentle passing. It coforts me at time to know that the love and memories I have are in my heart and mind and will always be there. It allows me to get rid of stuff that ways me down and keep my focus on positive living. The greatest treasure my parents gave me was to empower me to know that I can do anything I put my mind to. Trust me a few treasures to keep are much better they weighing yourself down with things that clutter your life and mind. Others are so blessed by the things we can no longer keep as well let the love continue.
November 4, 2008 at 6:13 pm
I live this way, in general. It gets to be a comfortable habit. But I think it would be hard on anyone with a family (I’m single). The only concession I make is that any friends can show up for a meal.
When it comes to things that I want, the rule is this: Everything comes on sale eventually. Put aside the money, and eventually you’ll see it for 40% off. If I still want it by then, I’ll buy it.
And yes, some of my friends do tell me that if everyone was like me, the economy would grind to a halt. It tends to be the most flagrant credit users that do that, though.
November 4, 2008 at 6:35 pm
if the economy would come to a grinding halt if we all stopped spending then something serious needs to be done about the unsustainablity of the products out there and the exploitation of the workers who manufacture the cheap goods we buy. the earth simply cant support us making and buying new things all the time. I think a spending holiday is a great idea for many reasons beyond personal finance
November 4, 2008 at 6:51 pm
We need to change the basis of our economy from consumer spending to real innovation and creativity. I hope everyone stops spending mindlessly, the consumption hamster wheel collapses and the whole paradigm shifts.
November 4, 2008 at 7:24 pm
Great challenge! I have put my own spin on it by giving myself a weekly allowance of $20/day. I can do whatever I want with that $20, and it includes all of my variable spending like groceries, transportation, etc. Whatever is left at the end of the day, I put into an “Extra” envelope/jar. At the end of the week, I put that extra money back onto my credit card with the highest interest rate (of course). Great idea though!
November 4, 2008 at 7:25 pm
Very interesting post.. What’s wrong with buying “STUFF” if you can afford it (pay cash and have no debt, put money away for savings, emergency fund etc..) – this is why i work so hard… it’s to give my family a better life, and have the opportunity to do things / go places and use STUFF. For me personally, i would much rather buy a nice pair of shoes/ or a visit to Harry Rosen than to put that xtra money away – as shallow as it might sound – but i have no regret / no guilt.
November 4, 2008 at 8:21 pm
Interesting experiment and one I intend to try this month.
Sam, I would venture to guess that part of the experiment (maybe a possible answer to your question “what is wrong with buying stuff?”) is to see if you do feel deprived if you don’t get your Harry Rosen shopping . Spending money on experiences with your family is one thing, but we have all grown so accustomed to expressing everything through material goods. What happens if we avoid that for a certain period of time? Does it makes us feel less happy or fulfilled?
I think that’s maybe the most important part of the whole idea.
I’m not saying this in judgement at all, by the way. I have plenty of frivolous spending habits myself. I am personally interested to see how I react to doing without them for a month.
And Gail, good timing.
This might be just the antidote I need to the nausea of excessive Xmas consumerism that has already started in every store.
November 4, 2008 at 10:32 pm
I saw the best billboard this afternoon that I thought you would all appreciate, and it seems timely to share, given this post. It said “Saving. It’s the new Spending”. (It was an ad for one of the high interest account banks).
November 4, 2008 at 11:11 pm
I don’t think I’m quite ready to not spend anything, I just did my first budget last week (thanks to your inspiration)!
But You inspired me to a goal of not spending anything on my greatest weakness for 6 months. My greatest weakness is craft supplies: scrapbooking stuff, yarn, fabric. I have a storage room full of the stuff. So no more. I’ll start for 6month, I have enough projects on the go to last me that long and maybe after 6 months I’ll keep going. Got to use the supplies up somehow, right?
November 5, 2008 at 1:12 am
Well this challenge has come in a timely manner. We just sat down and looked at our bad spending habits and have decided to start on a budget. But the problem is, and I don’t know if it’s us but we are already behind in a budget because it is the 4th, we get paid on the 1st…bills come out, spending happens so now we have less to live on until the “budget plan” (which looks great on paper) can happen Dec 1st. So we must curb our spending so that come Dec 1st we are not in the red and in that vicious circle again. Will let you know….
November 5, 2008 at 10:08 am
to Sky – I agree with you. I knit quite a bit, so any time there was a sale on yarn, I bought bags and bags. I stopped buying yarn 2 years ago, with the thought that until all the yarn I have has been knitted up, I will not buy another ball of yarn. My husband is very good, because I have asked him to keep me on track should I forget. So far I am doing very good! Thanks!
November 5, 2008 at 12:54 pm
N and Sky-
Ha ha! So funny!
The knitter’s stash totally got me, too!
It’s ridiculous – you think you’re being so frugal because you buy the yarn on sale for some fabulous project and it then joins the queue of other fabulous projects. I did the same thing, N: no more yarn (no matter how beautiful it is or how much of a deal it is) until I’ve finished everything I’ve started! And I also had a few knitty nights with friends where we did yarn swaps for other projects – that way we didn’t have to spend anything to have fun with the latest patterns.
Another thing I made myself do? I tracked the knitting spending over a year and made myself tally up the number. I was shocked at how much I had spent on this quiet, modest little hobby. The morale of the story is that even knitting needs a budget!
November 5, 2008 at 1:51 pm
Mountain Girl – haha I enjoyed your in put very much. oooh we knitters are strange creatures! Honestly, I have caught myself holding up balls of yarn to my cheeks cause they are sooooo lushious and delicious…. and… they…. are…. on…. sale!!!! That is where husband races up to me and bursts my bubble of all I could do with that yarn! Just like you, once I started to track my yarn spending, I almost fainted! And also the fact that, there were bags of yarn in every one’s closets and drawers – my teen son would often let out a ‘what the ….. MOTHER! there are fuzzy red balls next to my socks! Oh well, we have been Gailalized! haha Thanks
November 6, 2008 at 9:11 am
I must say, I HATE ’stuff’. It takes over my house, it exhausts me trying to clean it and in the end, most of it does not bring me any happiness at all.
My mom on the other hand, loves stuff, and when she has enough stuff for herself, she gets us more stuff. Christmas is the worst and I dread it. I have been on her for years that if she chooses to spend the amount she does (which I figure is around $500 on my daughter alone) to buy a savings bond, even just $100, but she refuses. I have always said, she does not need a Barbie, toy, CD for long, but she will be going to post secondary school in X amount of years and will appreciate the extra money then (6 years now!!!) I even picked up the brochure for the savings bonds. (luckily for my husband and I the last 2 years has been cash to be used on/in the house~new carpets one year, new washer and dryer another… this year is carpet for the basement if they do it again)
My brother recently announced that he and his wife are expecting (to my excitement of becoming a first time AUNTIE!). My mom was disgusted that I had none of my baby equipment left other than my stroller~which I have offered. My daughter is almost 12 years old and we have known that we will not be having any more children for a long long time now.
Sorry, this has become a rant. I have taken a spending holiday, my purchases have been ‘as needed’ for a while now (and when I have to buy, I try to look used a lot of the time) but I am overcome with the ’stuff’ that makes its way into my house that I am not even buying.
November 6, 2008 at 10:38 am
To Lindsay – I had a similar problem with my mother in law. Rant away lady – cause it is so frustrating!
What if you told her to buy one gift for your daughter and put the rest of the money in a savings bond for her education – and really harping on how hard times are and not knowing if you will be able to fully fund your daughter’s college tuition and also that you really really what to give your daughter a head start in life, by graduating with no education debt.
My mother in law got the message after I started to sell and donate her stuff to charity – she got mad. I told her that it makes my family and I feel better that someone in need would appriciate it and use it more than us hording it in our closet. Now she does not give us anything – once in a while she will hand my son some money to use or save as he pleases. You could try this stratagy.
Congratuations on becoming an auntie! I just became an auntie and love every minute of it! Thanks!
November 6, 2008 at 3:18 pm
The trick to saving on groceries is buy in bulk whenever the item goes on sale. For example, 99 cent/pound for turkey is a good deal, considering the different combinations you can have such as pâtés, hot chicken, ‘chicken’ fried rice, soup, sandwiches etc. When lean ground beef goes on sale, I buy a lot and make delicious chilis, meatball stews, meatloafs or stuffed peppers/tomatoes. Learn to love legumes. They are good proteins and cost a fraction of what meat would cost.
Make a lot so you can freeze a couple of meals. Not only does it save money, it also saves time.
November 6, 2008 at 5:27 pm
@ Lindsay. I’m a new mom and I’ve been an Auntie for 4 years. I’ve learned that babies don’t need STUFF, they need LOVE! Child experts agree too. It’s not about having oodles of toys with bells and whistles but rather it’s about having quality time with parents and caregivers who are full of love and attention. That’s the best way for kids to grow and develop.
I’ve been dropping that hint to all the grandparents because our tiny apartment really can’t handle a lot of baby STUFF.
My nieces are so young that they don’t notice that they are “missing” a birthday present from their auntie. Instead, I give their parents money for their RESPs. It’s all good.
November 6, 2008 at 9:03 pm
Thanks again Gail for the great advice. I managed to save $30.43 this week already, and put it onto my VISA. I probably wouldn’t have thought about doing this otherwise!
November 29, 2008 at 10:37 pm
It’s weird to me when people ‘check up’ on gifts they gave you previously. I was raised to believe that once you were given a gift it was yours to do what you want with — cherish, sell, burn, whatever!
When people check up it’s a sign that they actually gave the thing to themselves on some level, not you. I used to feel guilty about getting rid of things, but after years of guilt trips from the inlaws I now just holler things like “Yep!!! Sold it!!! Thanks!!!” When they ‘check up’. Lo and behold, I started hearing about how the “kids have too many things — we’ll just give you passes to the pool/ skating/ movies” —- hahhahahahahhaaa!