Week One: Spending Freeze
We’re kick-starting the first week of the Forget the Joneses project with a complete spending freeze. To put it simply: no more spending. You’re not allowed to spend money on anything that isn’t absolutely 100% necessary.
Think of it as “Mommysavers Survivor” except the only prize at the end of the game is the money you’ve saved. Use up the food you have in your cupboards. Your grocery budget is now limited to what you must buy (milk and toilet paper, for example). You'll have to "rough it" by watching what's on TV instead of spending $1 at Redbox.
This phase is not a long-term lifestyle by any means. The main goals of the spending freeze are to get you accustomed to using up what you have, making do without, reinforcing the difference between needs and wants and to stay out of the stores. If you’re struggling with debt or up for a bigger challenge, try to extend your spending freeze to a full THREE WEEKS. Why? Research shows it takes approximately 21 days to make something a habit.
During these three weeks we’ll be practicing the following skills:
Questioning the Difference Between Wants and Needs
During your spending freeze you will need to question the difference between wants and needs. Some things will be clearer than others. Yes, chances are you need gas to get to work. No, you don’t need a new necklace to match the sweater you got for Christmas.
… But what about the things that aren’t so obvious? Do you really need to birthday card for you brother-in-law, or can you make one? Do you really need to get your hair colored? Those gray areas (pun intended) are where your challenges lie. Try to anticipate the decisions you’ll have to make in the next three weeks. Are you going to be invited out to lunch? If your child needs money for school lunch, will you have him brown-bag it instead? What will you do?
Learning to be Resourceful
Waste Not, Want Not. You may be familiar with this phrase if you had a parent or grandparent who lived through the great depression or experienced war rationing. Prior generations demonstrated that philosophy numerous ways and learned to be resourceful with what they had. But in today’s world of abundance, why would we want to live that way?
There is a creative side that gets tapped into when you have to make do with what you have. It forces you to look see what you have in a new light. You’re forced to use your imagination. You see the something’s hidden potential. You’ll also experience more satisfaction when creating something out of nothing. There’s another great byproduct: you save lots and lots of money!
Imagination and creativity are both traits that everyone has. Like with most skills, they get better with practice. Unfortunately, the “quick fix” of being able to run out to the store to buy whatever we need can smother our resourcefulness. The best way to get back in touch with your creative side is to put it into practice each and every day. Once honed, this skill can apply it to other areas of your life: your career, your hobbies, and even your relationships.
Practice Delay of Gratification
There are always a million things that come up on your way to achieving your goals that could distract you. Learning to just say no when you can't afford something is a skill that requires practice, but can be learned.
Financial self control isn’t just a skill reserved for those without a lot of money. In fact, if you haven’t mastered this skill early on in your financial journey your problems are likely to only get bigger when more money comes your way. It’s a big reason why people who suddenly come into a lot of cash find themselves bankrupt a few years later. They haven't learned impulse control and how to wait for the things they want. Their pocketbooks may have expanded, but their temptations also get bigger. Since they've never mastered the skill of delay of gratification they will always have problems with money.
There are all sorts of hidden benefits from delaying gratification. Food tastes better when you’ve waited for it. Buying a piece of furniture feels more rewarding when you’ve saved for it rather than put it on plastic. Relaxing in the evening feels better after putting in a hard day’s work. In short: when you’ve earned something, you derive more pleasure from it.
The harder you work for something, the higher you tend to value it. Quick-fixes are rarely satisfying (think fast-food, shoddy repair jobs, etc.). Imagine your child comes to you asking for a new bike. She’s old enough to earn the money herself by saving birthday money, babysitting, or doing other odd jobs. Do you think she’ll take better care of the bike if she earns the money for it herself, or it is simply given to her?
Delay of gratification is an extremely important thing to put into practice when you have children. It’s one of the biggest indicators of success in life, so begin helping them practice at an early age. Here’s an interesting article on delay of gratification:
One Marshmallow, Or Two?
Once you start seeing the connection with delay of gratification and increased satisfaction and enjoyment, you’re more willing to exercise that skill and put it into practice on a daily basis. It will not only improve your financial life, but every other area of your life as well.
Day One Assignment: Create an "Approved Spending" List
Write down all the things you think you will need to purchase this week (you'll want to either start a
Mommysavers blog or a special FTJ Notebook). You are only allowed to purchase the bare-bones minimum, things you cannot get by without. This isn’t the time to hit the Target clearance rack (you can do without gift wrap for next Christmas) or to stock up on kids’ clothing for next fall (chances are they’ll have enough anyway). This is a time for you stay out of the stores and to question what is truly a necessity.
Now get going… write down everything that is on your “approved” spending list for the first week. As things come up, decide whether or not they're really necessary. You may unexpectedly run out of deodorant on Thursday. It’s OK to add it to your approved list when the need arises (or, you may decide to really challenge yourself and make a homemade version to get you through).
By participating in the spending freeze, hopefully many of you will learn that you can get by (and be content) with less in order to achieve your goals. Spending less is often a challenge, but it isn't a prison sentence. If you look at it in a positive way, it can be fun as well as rewarding.
You're not going to be perfect. You will be tested. Sometimes you'll be strong, other times you won't. The Spending Freeze is more about the process rather than how much you can "be good" or how well you can "stick to the rules". Some of you won't spend a dime, but may not learn much. Other members will be tested - and fail - but really learn a lot.
It's what you learn from your own personal journey that matters most.
Assignment #1: Spending Freeze + Approved Spending List
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