Thursday, February 18, 2010
Money Mindfulness Bootcamp: A Week Long Spending Challenge for You
I just finished a five day "Blogging Bootcamp" with Leo Babauta, the founder and writer for the wildly successful blog, Zen Habits. Leo is one guy who practices what he preaches. In spite of his success, he lives very simply and spends very little money on material things. He focuses his energy and money on truly valuable things like serving others through his blogs, raising six kids and being a good husband, and living mindfully and creatively. He has been able to completely pay off his debt and now can enjoy some of the non-material things that money can buy, like travel and helping other people.
He said something the other day in the Bootcamp about asking yourself every time you start to buy something, "Do I really need this?" Is it completely necessary to spend this money on this thing? So for those of you who enjoy tackling a challenge, I've got one for you. Starting today, begin a Money Mindfulness Bootcamp. Why would you want to do this? Well, for two reasons. First, you will save some money and discover just how much you spend on mindless stuff. Secondly, you might discover some pleasure in living simpler and having less. Here's how it will work:
1. Mental Preparation
So if you're going to do this, you need to prepare yourself mentally. For the next seven days, you won't be living the lifestyle you have been living up until this moment. This Money Mindfulness Bootcamp will be an exercise in financial and emotional dieting. But there will be positive results in the end if you stick it out.
2. Get A Savings Jar
Get a jar for savings. Pull out any one, five and ten dollar bills you have in your wallet and put them in the jar. You can keep any twenties or higher, but once you break those bills, put the ones, fives and tens in the jar. You can keep getting twenties from a cash machine if necessary. But you can only keep twenties or higher in your wallet.
3. Start With Meals
Go through your pantry and refrigerator to take inventory of what you have in stock right now. Using the food you have in the house, write a menu for breakfast, lunch, dinner and snacks for the next seven days. If you don't have enough food in the house for seven days, plan menus using very simple, inexpensive, but nutritious ingredients that you can purchase. Go buy those ingredients at the grocery store, purchasing store brand items if possible. Do not purchase any other items except what is on your list. Now, calculate your average weekly grocery bill. From that number, subtract the cost of the groceries you just bought. Write down the remaining number and shove that piece of paper in the savings jar.
4. Credit Cards
Unless it's an absolute emergency, do not use a credit card during this week. An emergency is a hospital visit, a flat tire, or a hold-up at gun point. Not too many robbers take credit cards anyway.
5. No Starbucks, No Fast Food
Sorry. Make coffee at home. Pack your lunch. If you regularly purchase coffee or fast food during the week, calculate about how much you spend on those purchases per week. Write that number down and put it in the jar.
6. Dinners Out, Entertainment
For the next seven days, you must not eat dinner out. Every meal must be either eaten or prepared at home. Any entertainment must be free. So no movies, concerts, or other activities that cost money unless you have already paid for them. Spend some time finding free ways to have fun. Do some research. There are great web sites about cost-free fun. Consider spending time in nature, playing games with your family, reading, exercising, or doing creative projects. Or use the time to clean, reorganize, and pull out useless stuff to sell or give away.
7. Spend Mindfully
Any time during the week you start to pull out your wallet to buy something, ask yourself, "Do I really need this?" You probably don't, but if it is something you absolutely do need, ask yourself if it can wait until next week. If you don't buy it or you delay buying it, write down the cost of this thing and put the paper in the jar.
8. What You'll Be Buying
Not much. You can pay necessary bills. You may need a few groceries. You may need to pay for parking and gas, although you might find alternatives to driving. Cancel any lawn or housekeeping services for the week. Your kids may have events or activities to attend that cost money. If they are optional, bag them. Wherever you cut back, write down the savings and put it in the jar.
9. Add Up The Savings
At the end of day seven, sit down with your family and open the jar. Add up the money that you saved by creating your own Money Mindfulness Bootcamp. Write a check for the total amount and put it in your savings account, along with the cash in the jar. Pretty amazing, huh?! (This is a great opportunity to talk with your kids about saving and spending.)
10. Make It A Habit
Consider participating in a Money Mindfulness Bootcamp once a month or at least once a quarter. In between, stay mindful about your spending. Keep asking yourself, "Do I really need this?" Keep a running total of your savings from each Bootcamp and total it up at the end of a year.
I'd love to hear back from you about your success with this challenge and how much you saved!