Earlier this summer, I joined an online Bible study group that read the book 7: An Experimental Mutiny Against Excess. I read the book along with a few ladybloggers I already knew (Kathleen, Stephany, and Kerri) and a few other girls who I met through the group. It was really fun to have weekly discussion questions to think and respond to, courtesy of Kathleen, and I’m looking forward to doing another one soon.
The book is basically one of those memoirs that involves the author writing about a short-term experiement, ala The Happiness Project or The Year of Biblical Living. In this case, the author, Jen Hatmaker, decides to spend 7 months (a very Biblical number) foregoing certain privileges of white, middle-class materialistic culture. Each month is broken down into a particular topic: Food. Clothes. Spending. Media. Possessions. Waste. Stress.
Jen limits waste and materialism by focusing on only using a few items each month. In the Food month, she only eats seven different foods. In Clothes, she only wears seven items of clothes. In Spending, she can only spend money in seven places.
As I continued to read her experiment, I was intrigued by the prospect of living with much less than I was used to. It seemed to me that I do spend an unnecessary amount of money on things that I don’t really need simply because I can or want. I have spent so much money over the years on Starbucks or eating out because we “don’t feel like” cooking or a new T-shirt or skirt when I have plenty to wear at home. We have so much money trickling out of our wallets in these small transactions that when it comes to a huge purchase, like furniture or a weekend vacation, we have to throw it on our credit cards because we can’t afford it. This is no way to live.
When I finally finished the book, I realized that while our own experiment might look differently than Jen’s, it was absolutely vital that we come up with a plan of action to change our spending habits. We are facing with a difficult financial situation right now because I’m not working full-time, and the money I do make ebbs and flows with my work hours and freelance assignments. I started reading no-spend blogs, articles on personal finance and examining what we could do to eliminate some of the wasteful spending in our lives without completely going crazy.
Starting today, September 1st and ending next year, on August 31st, Erik and I will embark on a new way of living. The Twelve is not a no-spend year. Obviously, we have to spend money in order to survive! Likewise, we also don’t want to get so frustrated and crazy that we completely give up mid-way, or even earlier, and thus lose whatever progress we made.
The main purpose of the year is to make sure we are aware of all the places we are spending our money, to be focused on spending money primarily for needs, and to be more cognizant and conservative when it comes to spending money on wants. For instance, with a cap on spending for social activities, I plan to spend more time looking for cheap or free activities so that we can really get the most bang for our buck!
The following is a list of places that we need to spend money at every month and which we will not limit ourselves in our spending.
- Internet (we don’t have cable)
- Drug Store
- Fitness Expenses
- Medical Expenses
Some places are relatively stable. Rent, insurance, our Internet, and even laundry don’t fluctuate too much month after month. Others, like our electricity or gas, might fluctuate month after month, but those fluctuates cannot really be helped. They are what they are.
A few places, like groceries and drug stores, are places that we need to go, but also feel that we are not likely to go overboard in spending money. I’m not a big make-up person, so I’m not worried that I will go overboard spending money at a drug store.
We also want to be flexible with the money we spend on groceries because we plan on hosting more people at our apartment and want to be flexible on how much money we spend. Eating out is always more expensive than grocery shopping, and so we want to make sure we don’t feel that we are limited there since we will already feel deprived by not being able to eat out.
We debated quite a bit about where we wanted our fitness expenses to go. On one hand, it isn’t really necessary day-to-day, but yet it keeps us healthy both in the short and long-term. We felt that we couldn’t narrow it down to a particular sport either, since running might not be something we continue to do throughout the winter. Although it might be helpful to have some kind of budget or spending limit on fitness expenses, at the end of the day, with me working at the local running store, I think we’re going to cut down on it as much as can be expected. We already don’t spend a ton on sports, and I don’t expect it to increase outrageously over the next year. And if it does, well, I consider fitness to be money well spent.
Edit: Meg brought up a very good point that we hadn’t included debt payments in The Twelve! It honestly just slipped our minds because we were so focused on places we spend our money on! We switched in debt and placed pet expenses below.
We realize that since this is a year-long project, if we completely forgo certain things, we will be completely miserable.
- Five special occasions: Erik’s birthday, my birthday, dateaversary, wedding anniversary and Valentine’s Day
- One date night a month each ($80 max)
- One group outing a month ($80 max)
- One night with friends a month each ($40 max)
- $240 each for hair cuts
- $240 each for gifts for each other
- Previously scheduled travel plans (Wineglass marathon, Minnesota wedding)
- Pet expenses
- Giving-related expenses: church, gifts, charity, Junior League dues
- One unplanned discretionary item, approved by both spouses
- Clothing as needed (not wanted) and approved by both spouses (for instance, socks, underwear, etc.)
The Exception list are places that we either 1) need to go, but not regularly (such as repairs) or 2) want to go, but either not regularly (like anniversaries) or with spending maximums (like date nights). One thing we added late in the game is #11. Erik felt that we couldn’t accurately predict everything we might need to spend money on over the course of the year, so it’s kind of our “get out of jail free” card. In the event that both of us feel we absolutely need something, we can spend money on it, but we both have to agree on it. And of course, we have to be able to afford it. (A trip to Italy does not count.)
Edit: As mentioned above, we put pet expenses into the Exceptions, because honestly Natasha hardly costs us any money. We buy her cat food and litter at the grocery store. While we do trim her nails at Petco, it’s only once every couple of months so it’s a fairly cheap and irregular purchase. We rolled the post office into giving-related expenses because we hardly ever go to the post office, and most things we ship are gifts!
We both think of The Twelve as a kind of contract for the next year. Something by which we will guide our spending, but gives us the flexibility to take care of our needs at the same time. Time and again we have created and then abandoned budgets because they were too difficult to work with. Although there will be a lot of denial (no Pumpkin Spice Lattes for me), I also know that there are a lot of opportunities to still do things and of course, there is a time limit. All this comes to an end next August, when we can reflect and decide how to proceed.
Erik and I thoroughly pored over the list and we think we’ve adequately accounted for most situations that we face. There were a few places we thought about including, like Target, but I came to the conclusion that Target was not really a need, and would suffice as a place to purchase an item on our Exception list, such as a gift or socks, so it didn’t really require its own line.
Hopefully, with these guidelines, we’ll be able to save quite a money to put toward our debt, emergency fund and savings toward fun things like travel. Some of it will also likely just stay in our checking account for purchases for the next month, since our spending will still fluctuate.
On the first day of each month, I’ll post a recap of the previous month and share any tricks, tips or lifehacks that we learn for how to get by on focused spending.
Have any questions? Feel free to ask in the comments or send me an email and I’ll address them in an upcoming post!