Monday, 14 December 2020

A few months ago, as my mathematically inclined husband reviewed our monthly budget at our kitchen table, he lamented that we had yet again failed to adequately save money. 

Despite compulsively jotting down our expenses on a spreadsheet stuck to our refrigerator, we had managed to stay within our allotted budgets but somehow not add much money to our savings.

“Where did all of our money go?" I asked him. It took us another month before we could actually answer that question.

Here's how we cleaned up our cash flow with a month-long financial "diet." Getting started

Different advisors recommend different methods and lengths of time for financial dieting, and strategies can range from eliminating activities like drinking at bars and eating out to prohibiting the use of credit cards. For us, we simply cut out all expenditures other than fixed expenses, like rent and daycare, and absolute necessities, like food and medicine.

 

As we normally track our expenses monthly, we decided to keep our "diet" to a month as well. This proved a great model, as it allowed us to see the impact of our financial reset by comparing our results to those from prior months.

Identifying leaks

 

My husband always teases that I am the family's resident "shopper," but we were both made aware of how much he shops during the first week of our diet. Since the outbreak of the COVID-19 pandemic, he has turned to online shopping—and in particular websites like Amazon—to quickly get items that he might otherwise purchase at specialty shops.

 

Perhaps unsurprisingly, his happy clicking was negatively impacting our savings. So, for the month of our diet, we discussed at length how much we really needed something before he bought it. A new car seat for our growing toddler easily made the cut; a milk frother that he had eyed in the online electronics aisle did not.   

11/23/2020                              How one couple tripled their savings by putting their finances on a “diet” : Contently

https://contently.com/stories/267237                                                                                                 2/4

As we drastically cut our overall expenses, we became increasingly aware of recurring charges, too. We kept subscriptions only to services we frequently use,

like Netflix, and eliminated all others.

 

Shopping less, trading more

During the second week of our diet, our 17-month-old had a growth spurt and was desperately in need of new clothes. As I could not buy her clothes, I turned to friends and neighbors for hand-me-downs. A simple request for unwanted items in her size resulted in four bags of like-new secondhand clothes for her to wear.

When friends and neighbors did not have items we needed, we turned to groups like Buy Nothing—a global network of hyper-local communities that give and trade goods and services, rather than buy them. By using these same networks, we were also able to give away unwanted items to others who could use them, helping others in turn as well as freeing up needed space in our apartment.

Finding joy in saving

 

At the onset of our "diet," my husband and I speculated about the things we thought we would miss while dieting—good liquor for him, shoe shopping for me

—and were surprised by how much we enjoyed buying less and saving more. Not

only did we come to better appreciate our current possessions, but we learned that there were many expenses we simply did not miss.

Case in point: take-out food. Rather than ordering from restaurants, we challenged ourselves to try new recipes. In addition to expanding our culinary repertoire, we were also able to share the joy of cooking delicious meals as a family with our toddler, who proved to be a very enthusiastic sous chef.

Tracking results

Like any diet, it was not always easy to stick to our financial cleanse. To reduce my temptation to shop, for example, I had to stay off of social media, and especially Instagram, for most of the month. At the same time, my husband motivated us to stay on track by sharing weekly updates about the amount of money we had saved.

 

Our growing bank account encouraged us to keep to course. And, by the end of

our "diet," we had tripled our monthly savings.


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