One helpful budget challenge is to focus on an area of your regular spending and vow to not spend any money for a month in that area. Read on to learn more.
Nearly 80% of Americans have debt which proves how important budgeting is.
It’s overwhelming watching your money diminish after paying bills, rent, and other necessities. But a great way to pull the reins on your spending is to do a budget challenge.
If you’re keen to try one but aren’t sure where to begin, you’ve come to the right place. Here’s how to do a budget challenge.
The Rules
If you’re unsure how to budget, start with the challenge. The point of this is to help you reset after a vacation or if you’ve spent your emergency fund on fixing your boiler.
There are essential rules to follow so you can control your expenses. For instance, you only shop for your needs and not wants.
You can only spend on your mortgage or rent, utilities, insurance, groceries, gas, and internet or phone bills. The best ways to the budget are by cutting out clothes shopping, eating out, coffees, and hair or nail services. Basically, anything that’s non-essential.
Further, you must consider your own calendar before you begin. Avoid vacation time or when a lot of birthdays or special events are coming up otherwise it’ll tempt you to spend.
How to Do a Budget Challenge
When you know how to budget, it’ll make your life stress-free so you can focus on other areas. Plus, the challenge will highlight where to cut your budget as it’s often small purchases like daily coffee that add up.
Here’s what to do.
Understand Your Spending
Before you learn how to cut expenses, it’s important to understand your spending. For instance, consider your habits because once you understand the psychology behind it, it’ll help you break the cycle.
Further, decision fatigue is when you’re tired at the end of the day making it easier to forget logic and go out for drinks. Once you understand this, you can prepare yourself to make the right decisions later in the day.
You must also take care of your body and mind during the no-spend month. Otherwise, stress and sleep deprivation can stop you from making the right financial decisions.
Outline Your Rules
To make the challenge effective, write down your rules and post them on your fridge as a reminder. Consider exceptions such as buying fresh produce or milk. Make a list of what’s acceptable and what isn’t so it’s easier to stick to the challenge.
You must also discuss the budget challenge with your family otherwise it’s pointless. Once everyone knows the rules, it’ll be easier to do.
Stock up on Necessities
You must stock up on essential items before starting the challenge. Make sure you have food in the freezer and check your toiletries, cosmetics, and pantry so you’re fully stocked.
Don’t leave it during the month as you may be tempted during your extra shopping trips.
Tell Friends About the Challenge
Don’t be embarrassed about doing the budget challenge. Instead, tell everyone so they know you can’t splurge on eating out or going for drinks. Let your friends be your encouragement buddies so you can have a successful no-spend month.
If you’re looking for inspiration, browse hashtags like “#debtfreecommunity” and “#nospendmonth” on Instagram so you can see what people are doing and how they’re doing it.
Throw a Pantry Party
A fantastic way to have fun during your budget challenge is to throw a pantry party. Not only do you save money but it means you can use up all the items that get pushed to the back and forgotten about.
So, raid your pantry and make a dish that you can share with your friends and family. You can only use the food you have, no cheating!
Research Free Entertainment
The weekends are when you’re most tempted to go to the movies or shopping. Because these activities are banned for a month, research free events in your city.
You can also host a movie night, have a family game night, or go to the park for a picnic.
Catch Up On Errands
Now you have time to do household chores. For instance, clean out your garage and organize your items. You can then donate, throw away, and sell old items online for extra cash.
You can also deep-clean the bathroom and kitchen. Got pets? Then use this helpful guide so you can reduce dog shedding in your home.
Hide Your Credit or Debit Cards
Risk temptation by hiding your credit or debit cards. Never keep them on you as it’s easy to spend. Instead, stuff envelopes with cash so you can monitor and control how much you’re spending on groceries and gas.
You should also unsubscribe to your favorite retailers and disable credit card auto-fills on shopping sites. If you’re a shopaholic, list your frequently used e-commerce websites and post it next to your monitor so you don’t go on them.
Move Your Money
Put a chunk of money into a separate savings account so you don’t spend it. Then once the month is over, you can keep adding to it and re-build your emergency fund.
No matter how you do your budget challenge, it’s important to change your spending habits so you don’t run into future problems.
That’s How to Do a Budget Challenge
Now you know how to do a successful budget challenge for a month. It’s difficult at first but when you stick to it, you can make amendments to your spending habits to help you and your family.
Get creative with your meals, host movie nights, and tell your friends so they can encourage you. Good luck!
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