Many of you know that I just wrapped up a financial fast for the month of January. I wanted to share my results from the fast and the lessons I’ve learned about my finances thus far.
Disclaimer: This excludes bills, groceries, and items that I paid in January with money that was previously set aside. This is exclusively my spending money for the month.
I spent a total of $359. In the breakdown below you can see I cheated a little by eating out, but having to change my name on my passport is what really threw me off. By comparison, my typical “play money” budget is $900 per month. That means I reduced my spending by $540 or 60% this month. That savings went towards additional student loan funds.
How & Why I Spend
I compared January to the previous two months and noticed that my biggest spending categories are going out with friends, self-care expenses such as mani-pedis, and services that help me maximize my time, like house cleaners and prepared meals. I’m not a huge shopper so this didn’t really surprise me.
I’m not tied to things, and have a very ‘less is more’ lifestyle. I usually favor experiences and enjoying free time over physical items, so it makes sense that my spending is mostly in those areas. This made me think back to my first job out of college, when I was making $28,000 a year. I was incredibly resourceful in finding free events for my friends and I, and I always did my own hair, nails, etc. I used to think that I’d spend money on things much more “when I made it”. Now I realize that I just don’t have the desire for much.
I know many people are the opposite; my husband is for example. The man’s closet would put most boutiques to shame. At the end of the day, you have to know yourself, understand your triggers, and figure out how to keep your spending in check. For me, that meant reverting back to some of those old habits.
The fast was much easier this year with many of my circle on board. It helped that everyone around me respected and supported what I was doing. Even those who weren’t fasting, were considerate enough not to tempt me by inviting me out. This leads me to my next lesson:
If your friends can’t help you reach your financial goals, get new friends.
I used the results from last month to adjust my budget going forward. I found the areas where I have room to trim some fat without constricting myself significantly. At some point I got comfortable and gave myself a raise; I’m going to scale that back a bit. For this year, I’m going to cut my spending budget by 20% and focus more on my debt and investing. I encourage you to do analyze your budget and find your own fat to trim this year.
Giving yourself a raise is one of the biggest traps that people tend to fall into. You get a new job that comes with a nice raise, or start making some money in your small business, and you increase your lifestyle accordingly. If you keep up that habit, you’ll always be hustling to keep up your lifestyle versus freeing up money to invest.