As a young professional in the financial planning industry, I find myself conflicted: I’m well aware of what it takes to build a financially comfortable future, but I enjoy my little luxuries. Three months ago I challenged myself to tackle one bad spending habit per month. In August I gave up take-away coffee. In September I said no to shopping. And in October I opted for an all-cash “going out” budget. Here’s how I did!
August is my birthday month. I’m happy to announce that I didn’t purchase any coffee in August. I did, however, enjoy my free birthday beverage from Starbucks. Ironically, one of my birthday gifts was a Starbucks gift card, but, in the spirit of the challenge, I didn’t use it until the Pumpkin Spice Latte returned to the menu on September 1st!
August’s challenge brought new opportunities. I drank coffee from the office pot for the first time. During long afternoons I opted for water. I even lost a few pounds, thanks to cutting out the high-calorie lattes. August’s challenge saved me $24.58.
September is a tough month to avoid shopping malls. Summer clothes go on sale and new fall fashions begin to appear. Since I couldn’t purchase new clothes, I had to shop my closet! I found myself wearing pieces I normally neglected and making new outfits. And when I ran out of my pricy foundation I avoided splurging on a new one by asking a Sephora associate for samples.
Halfway through the month I started to enjoy the challenge. Holding on to the money I’d worked so hard for felt great. That high helped keep me on track for the rest of the month. September’s challenge saved me $129.50!
In college I used cash only at the bars. Since graduating, I dropped that habit. But I picked it back up for the month of October. I allocated $200 for entertainment expenses – specifically transportation and alcohol. I easily stayed within this budget and found, to my surprise, that more than half of my entertainment expenses were for Uber rides.
I didn’t save money on October’s challenge, but it made me incredibly conscious of how I spend my money on a night out. It also challenged me to fit my outings within my budget rather than whipping out my debit card to pay for any extras. I plan to continue using cash for these expenses going forward.
Whether it’s a $5 latte every Monday or a mini shopping spree every payday, once you’ve created spending habits, they can become mindless. Before you know it, your budget is off the rails and you haven’t saved for the future.
This budget challenge made me cognizant of where my money was going on a micro level. I challenge each of you to find the ways that your budget gets off track and work on tackling those bad spending habits. Your future self will thank you!