Experiment: The $0 Challenge

18 Oct
2009

(I know some people are uncomfortable talking about finances and money and if so, you may want to skip this post and any subsequent posts.)

So I’ve been spending a lot of time lately at my personal finances lately. Trying to figure out what my weak points are and where my strong points exist in my personal financial economy. I’m not going to lie – it’s been a little tight these last few months. Unexpected expenses… expected expenses that were more than assumed… spending habits that aren’t flexible… it’s been adding up. In a really bad way.

Part of my problem is I don’t have a set budget from the onset. My habit – one that I’ve only recently started getting into again – is to “post-budget,” as I call it. I take all the information from my online bank account: credit card, debit card, etc and pull those numbers down into a spreadsheet where I break all my purchases into categories. Eating out, grocery shopping, sports, alcohol, travel, cabs, cell phone, personal/beauty, etc. Then I take a look at these numbers and try to figure out where the bleeding is. Where I need to put pressure to stem the flow.

It helps in that I know I eat out a lot. (I buy a lot of food in general.) I like to shop. My alcohol spending is below where I assume other people’s spending is. This helps me try to adjust my behaviour. But adjust to what? I’m not really aware of how much I should be spending – or can afford to spend in a month on anything. This is a big, red flag to me and something I plan on addressing in the long-term.

But for now, I want to focus a little more short-term. I know I am heading to Montreal this weekend to see a very old and dear friend. And I want to make sure the cash flow is there so I can have fun and not be horribly embarrassed that I can’t afford to go out with him. Thus, I am challenging myself to a  4-day $0 Challenge. From Monday morning until Friday morning, I want to see if I can go without spending a single dollar. Not even a cent.

I asked Twitter 30 minutes ago:

Going to try to spend $0 from Monday am to Friday am. Think it’s possible?

The answers I received?

No! Because if it is possible, I’ll have to stop making excuses.

You will fail.

Sure, it’s possible to spend $0 if you’ve prepared for it the week before :)

No. ;-P

No

No! (Prove me wrong.)

Definitely not positive (not to confuse that with non-supportive). But it comforts me, in a way, to know I am not the only one dealing with this issue. And as we all know, it’s never really the big purchases that do us in, but the small, every day ones. Especially for me.

So, how am I going to do this? Read on…

1. No More Bought Breakfast, Lunch, or Dinner.

This is going to be the hardest one, for me, I think. Because boy, oh boy, do I love to buy food. Om nom nom. Especially because I’m tired in the morning, so have no energy to make breakfast. Then I’m lazy at lunch so will not bring a lunch. Then I’m in a rush for dinner so it’s easier to get something quick and easy than make dinner. Always with the excuses.

This is going to be hard for me, yes, but even more difficult this week, as I have social obligations every night – meaning my ability to go home and cook a meal are going to be severely limited.

To address this: Planning is of the upmost importance here. I know am going to be busy so I will have to make sure I have meals to cover breakfast, lunch and dinner for the next four days. Luckily, I bought some pasta and pasta sauce on Saturday and made a huuuuge pot of pasta. I now have ready made meals on-hand, in the fridge and freezer. No more excuses!

I also plan on making my lunch and dinner the night before and have it ready to grab in the morning when I am bleary eyed and sleepy. Doing this the night before will ensure my tiredness will not be able to be the excuse.

Finally, I love myself some Diet Coke. And our office has a Coke machine where I tend to spend $1 a day getting my fix on. That’s $5 a week or $20 a month of over-spending. If I took the time to actually go buy a 12-pack of Diet Coke at Sobeys of Loblaws, those packs only run about $5 at most. Right there, I would save $0.59 a day. It’s super small, yes, but honestly? There’s no reason for me not to do this. Now, I say this, and am lazy so I will not be heading out to a grocery store tonight. BUT! I did just buy myself 4 Diet Cokes at the convenience store just so I can ensure I will get my jolt every day, without spending any money in the pre-determined challenge period. At least I planned for that… right?

2. Suck it up, Buttercup.

Another problem with me is that I tend to bring food with me to work, and then not eat it in favour of going out. Why would I want this ratty old, kind of warm sandwich when I can have a hot delicious wrap? Screw you, homemade food, I’m going out! This results in a lot of unnecessary money being spent AND a lot of wasted food. It’s horribly bad how much food tends to go to waste when I am around.

To address this: I will just suck it up! And hope that the pride of actually eating my homemade lunch will overpower the loss of deliciousness I could have from the hot wrap down the street. Mmm, tasty…? Secondly, I’ll try my best to ensure that my lunch is somewhat appealing for me this week. A little creativity, and a little tempting my tastebuds could go a long way…

3. Avoid Impulse Purchases.

Seriously.

I went into Shopper’s on Saturday with the clear objective of getting 1. Shampoo, 2. Conditioner and 3. Kleenex. Somehow I walked out having spent $97 – and I forgot the Kleenex! Aaargh! (To defend myself, I actually ended up buying a bunch of groceries at the store so it wasn’t like I just spent $100 on beauty items. But still.)

To address this: Do. Not. Walk. Into. Any. Store.

Got that, Brooks. No stores. None. Not even just for a look. Hey, remember that time you decided to pop into a super sweet boutique with nothing you could afford with the clear goal of “touching only!”? And how you somehow walked out with a $70 purse? Remember that? THAT WAS WRONG OF YOU. YOU WERE A BAD PERSON THAT DAY.

Ok, now every once in a while is fine. And I can be good about letting the guilt of an unplanned and expensive purchase override my desires for a new shiny object. But for this challenge? Don’t even tempt yourself, mmk?

4. Be a Social Debbie Downer.

Yep. It’s true: Hang out with friends and you invariably spend money. The group mentality works well here. I know I have plans this week where I will be tempted to grab a beer with friends, or join in on some food. And again with the small purchases! I buy a beer or two every night of the week, as a social norm when hanging out with friends and suddenly I’ve spent $70 on beers in a 5 day period. That is insane!

To address this: I could be socially awkward and explain that I’m doing this weird $0 challenge. Or I could make people uncomfortable and say I can’t afford to buy even one beer (and make myself uncomfortable in the process -”Oh god! they’re judging my lack of ability to handle my own finances properly! What will they think of me!?”). Or I could just say, “I’m fine with water, thanks.” Or claim I’m on a diet. Or whatever.

I’m not sure which route I’ll choose. But I do know that I will stick to this challenge, even if it makes me a minor social weirdo for the night. I’m fine with that. And hey, readers, if you have any suggestions, let me know! (Note: No suggestions on how to get friends to buy me drinks; I’ll just feel horribly guilty if they do that!)

So! These are my tips to get me started. I start tomorrow bright and early. I have my breakfast already in my head. I know what I will make for lunch and what I’ll have for dinner. I’m curious to see how I’ll fare. The Queen of Spending is stepping down from her throne and going out to hang out with the villagers.

I’ll update this blog with any rants, raves, catastrophes or if it’s entirely uneventful, the outcome. Stay tuned!

  • Caitlin
    You're about to visit the house of the $0 challenge, so don't stress about being judged about finances. I currently have no job, thus no income, and I *STILL* took out $40 this week for SHIT. So I feel your pain, especially in the food arena. Mike is big into casseroles, but I was brought up as a child spoiled with delicacies like curries and steaks and fresh produce every day, and the word "casserole" was pretty much blasphemy at the Sparks' table. It's very elitist and finicky of me, I know, but the fact is I "don't do leftovers". I'm getting better, but it means every other day is shitty day in the food world of Caitlin. Oh how much of my bank account goes to food... doesn't help that one of my fiercest hobbies is cooking, and not just peasant food, but complete roast dinners and meals found in the Gordon Ramsey cooking-to-impress-the-damn-Queen-of-England cook book. Le sigh.
  • most of my money goes into butter and dresses.

    i'm actually gonna check that now, but it's probably true!!!
  • Emma,

    I think what your doing is admirable. Many people in their 20s struggle with finances. And I think your bang on with your analysis that its the little things that kill us. Social stuff does hurt too. Going out for lunch every day only costs 8 bucks but it adds up fast when you are tight on money.

    Now I am not a tightwad (at least I don't think so) but have always been good at saving money. Saved up $4000 for university working part time in HS. Paid off $7000 in student loans in 19 months. I am not trying to brag, I mention it to lend credibility to my personal finance success.

    Here are a few organizational budgeting tips I use so that I am not "coasting" into payweek, time after time.

    1. Turn everything into a little game. Remember when Principal Skinner was trapped in his garage and he made a game of bouncing the basketball in an hour to keep his sanity. Well I approach spending and saving the same way. Save money and plan it out. Then try to beat it, when you do, reward yourself. I like to think of my bills and debt in terms of tetris. The more i pay down bills and debt the more money I have leftover. Plow down your debt/expenses like getting "tetris" in Tetris. Now video games work for me, something else will work for you, ie soccer.

    2. Plan out paydays and your fixed bills. I know the last thing you want to do on payday is pay bills but I find this is the best way to manage your money. Pay your bills first, then what is leftover is for spending / personal. I get paid every 2nd friday. The first reminder i have on my BB and outlook is "bill payments". Unless you make commission your payday is the same amount every two weeks (this actually helps when budgeting). Setup meetings in your calendar for each payday. That way outlook reminds you to pay your bills. In these meetings put your fixed expenses like rent, electricity etc and also put debt payments (student loan, credit card, even RRSP payments). Then align your bill payments for each paycheck based on the due dates. If power is due at the end of the month make sure you have electricity payment in your "2nd paycheck". That way you can analyze each upcoming payday, the bills that are due and how much "leftover" you have for groceries and personal. Once done paying bills, plan your next paycheck. Once you get good at this. You will start paying your bills early to get more "leftover" amount for the next paycheck. So figure out what is reasonable for a two week period for leftover. ie 100 dollars for groceries. 50 micellaneous (shampoo, toothpaste, toilet paper). 50 for personal and try to stick to your leftover.

    3. Credit cards and debit cards. Ahhhh the most evil thing our 20 somethings struggle with, credit cards. I know this may sound weird at first but here's what i do. Use your credit card only for big purchases. (flights, home renos, mattress, furniture etc). I know it sounds weird cuz you think of the interest rate but hear me out. Big purchases mean lots of reward points but it also means you think about it a lot more. Which means your more likely to pay it down in big chunks. ie tetris. If you do make big purchases with credit card. Try to pay off at least 50% of it right away. Then put the rest in your "bill payment reminders" as VISA $100, MC $100 etc. the reminders will help you to make big chunk payments. Use your debit card for small purchases and everyday stuff. Your debit card is "real" money. Once its gone its gone (also dont get overdraft on your checking account). So use your debit card for small purchases. And then when your out, you no your out of "leftover". And can better budget your money next time.

    4. Social stuff. Well buying beer after work is tough but unfortunately getting your finances in order sometimes means being hermit for certain periods. Cut back on social outings that are "one or two beer nights". I know it sounds odd, but budgeting for a big night on the town (ie birthday) is alot easier than 20 bucks a day on "that one beer after work". Also, if you have a cool apartment or house. Use it. Make your place THE place to hangout with friends. That way you save on money ie going out for food. You then save on transportation and food becomes cheaper. ie have potlucks or have friends over and order pizza but everyone chips in. Rockband and beers saves so much money its silly. That and its a kick ass time. Also if you are aboozehound like I am, buy in bulk. I love my GIN so I always buy quarts or 40s. I don't drink it all in one night but a 40 can last a couple weeks if its that "one drink" you have when you get home to relax. See tasty gin and tonic after work cost you 1-2 bucks instead of 6.50.

    5. Think of saving / paying off your debts as a game. Hey didn't he already say that. Well I did but its worth repeating. When paying down my student loans, all I thought of was, man won't he be awesome when I don't have to make loan payments. Imagine what I can spend that money on. Thinking like that helped me pay it down faster. And as it got lower I started making larger and larger payments. Larger and larger payments showed up in my "bill payment" reminders but also let me budget less because I was making larger debt payments. And the allure of that "extra money" was motivation to keep me going.

    Anyway that is my rant. Hope it helps.

    Thanks,
  • Over time I've determined it's easier and more accurate to retroactively analyze how much you spend in an average week, then adjust your fixed expenses to accommodate that. I find there is only so much you can cut back on before you start impacting your social life or your food intake, and really, fixed expenses are 75% of my costs anyways. I'm not saving much money by eating a $3 wrap at home, as opposed to a $6 wrap out.

    The big things are alcohol, buying combo meals (I only ever get the sandwich, no extras, no drink), and impulse consumer purchases. But even those only add up to about $150 a month, not much compared to your rent, utilities and any interest on debt.
  • Gem
    Emma! I hate it when I go out with friends with the intent of spending no money, and people spend the entire night convincing me to buy something. If I were you, I'd stick to your guns. Tell them you just weren't planning on spending any money that night, and if they really push, tell them about the challenge.
  • Helder - I know exactly what you mean. The only way to ensure I don't spend any money at all is to stay at home and hide under my blankets. It's crazy how easy it is to part with your hard-earned cash.

    I'm always up for Rock Band! And yeah, it definitely does help when others are either in the same social situation or willing to accomodate your budget!
  • Coincidentally I've been going through a smilier challenge over the last couple of weeks.

    Creating a budget and trying to stick to it. Not easy. It seems I spend $20 just stepping foot out the door.

    Being a home body, as lame as it sounds is part of it . The social challenges I find are the hardest. Drinks after work, etc.

    I do find however, if you can encourage get togethers such as movie nights or just chilling with friends at home(s) can go along way as far as savings on entertainment goes.

    Rock band party anyone?
  • Haha Devin - just got back from the store. I should be more than stocked up now ;)
  • Devin
    All I can say is that I REALLY hope you got groceries before starting this 4 day challenge lol, otherwise it's going to be a hungry four days!
  • Absolutely agree Kevin. And I think this is part of the budget flag I mentioned briefly - in order to make reasoned changes in my habits that don't cause me to break one day under pressure, I need to know what the goal I am working towards is. I think I'll probably be addressing this in a post at some point.

    For now, I just want to see if I can do a four day "boot camp"-style purge of my spending habits! I like to challenge myself.
  • I think you have great intentions with buying nothing for 4 days but I think your post points toward a bigger change in your spending habits, making small gradual changes. I see it like if you were to do a diet. If you cut yourself off completely from the nice things you're going to go overboard when you give yourself a break. If you make small cutbacks its a lot less painful and probably better in the long run.
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