Want to make a small change that can have a big impact on your finances? Want a quick win that will get you closer to your financial goals? That’s what we’re going to do today.
If you’ve already set your six-month goal that we talked about in Day 1 of the challenge, then it’s time to start making some progress!
If you missed Day 1 or haven’t written down your goal yet, go back and check out the Day 1 post and video.
Today, in Day 2 of the Frugal Fresh Start Challenge we’re all choosing something– just one thing– to cut out of our budgets for the duration of the challenge to get a jumpstart on our goal!
Even before we get into tracking spending, budgeting, or reducing expenses, I’m pretty sure most all of us can think of a couple of areas right off the bat that we could trim down or eliminate completely. Now is the time!
Maybe gourmet coffee is your guilty pleasure. Maybe you eat out too often. Maybe browsing Amazon inevitably results in unnecessary spending.
In case you’re drawing a blank, here are some possibilities:
- Cut out fast food
- Cancel cable
- Spend $0 on entertainment
- Cut out meat
- Give up treats (for me this would be the hardest one on the list)
- Spend $0 on clothes
- Cancel your gym membership and run instead
- Stay out of Target (or whatever your shopping weakness is)
Just choose one. You don’t have to commit to dropping the expense forever, just for the month of the Frugal Fresh Start Challenge. You can do this!!
If cutting something out completely is overwhelming, make specific limitations on how you will cut back. For example, if you eat out most nights, cut back to only eating out twice a week.
Calculate Your Savings
Do a little multiplication to figure out how much your initial sacrifice will save you this month. How about if you cut the expense for the whole year? Seeing how much your sacrifice is saving you can really motivate you to keep it up.
For example, if you stop by Starbucks on your way to work five days a week and spend $3 a day, you will save $15 a week or $60 a month by ditching the Starbucks habit. A $3 per weekday habit will save you more than $700 over the course of a year! And I’m pretty sure that’s a very conservative estimate on the price of, well, anything at Starbucks (Can you tell I’m not a coffee-drinker?!). Think of what else you could do with that money!
If you have a weakness for a certain website or store, do you know how much you spend there in a typical month? Maybe you always find yourself leaving Target or Costco with a bunch of things you hadn’t planned on buying. Take a look at the last two or three months and see how much you have spent. Average those months together to get an idea of how much you will save by swearing off that shopping temptation for the month.
Attitude is Everything
As the month goes on and you start to feel the pain of the expense you amputated from your budget, remember that you chose to cut this expense. No one made you do it.
Instead of turning down your friend by saying “Sorry, I can’t eat out this month,” consider being pro-active and taking ownership of your choice. You could say, “I’ve decided not to spend money eating out this month” or “I have an awesome financial goal I’m working toward this month, so I’m not spending money on restaurants.”
No one wants to feel like the victim of their budget. Reminding yourself that you are making a choice to improve your financial situation and reach your goals will help you stay positive and feel empowered.
Challenge– Day 2
Choose an expense to cut right now. It doesn’t have to be a lifetime commitment, just for the month. We would love to hear what you chose to cut down in the comments. You might inspire someone else to do the dame!