I challenged myself in June to limit myself on unnecessary spending. This included things such as eating out, buying stuff that I don’t really need, and limiting entertainment expenses by utilizing things that I already have available to me. But, I wasn’t too strict on myself and I feel like I could have definitely done better.
I still bought lunch for a coworker, I also bought lunch for a couple of friends who I haven’t seen in 3 years, and Amanda and I went out to have dinner with some friends one weekend. That was pretty much the extent of my unnecessary spending, though. I think that challenging yourself to a month of really tracking your expenses and keeping them as low as possible is a great learning process and would probably be eye-opening for many people.
Non-Discretionary & Essential Expenses
A lot of money is spent on things that we need to sustain our current obligations such as housing and utilities, insurance premiums, debt payments, gas for our vehicles, and other recurring payments such as a gym membership. You’d probably be surprised to see how much of your paycheck goes towards those costs alone. However, depending on how good (or bad) you are with your budget, you might be spending even more on things that you don’t necessarily need. There are a ton of categories that people spend money on to sustain a certain lifestyle that we could probably cut down on if we really wanted to (or needed to).
Controllable & Non-Essential Expenses
Besides those basic expenses listed above, think of all the controllable and non-essential expenses that you spend money on: groceries, household goods, eating out, subscription services, entertainment, clothing, etc. The list goes on. Yes, we need some of these things, but we can control the amount that we spend on them. Some of them we don’t need at all, but we want them.
My Results
In June, I was able to save 48% of my take-home pay (the amount deposited into my bank account), or 31% of my gross pay (not including 401(k) contributions). And I could have easily saved more. My goal for July will be to save the same amount, if not more. Although I’ve already budgeted for it, this will help ease my mind with a vacation coming up in August.
Another Challenge
As I was writing this, I actually stumbled upon a similar challenge that my friend, Justin Castelli, has placed upon himself for the month of July. It sounds like Justin is going to try to be much more strict with his spending than I was and I’m going to be following along at his blog, All About Your Benjamins.
Challenge yourself this month. See how much you can get by on by only spending on the “basics”. It’s a great learning experience and you’ll likely end up saving a good amount as well.
