As I mentioned in my spending and savings plan post, I will feel free to spend money on anything in my list of “needs.” So here it is!
- Gas for cars (Connor and I both commute 35+ miles a day and one of us drives 2 1/2 hours to the other one’s city each weekend)
- Prescriptions and medical care as needed
- Dog food and vet visits, occasional grooming (I’m not so good at cutting dog nails)
- Regular car maintenance, registration, insurance
- Personal care (makeup, hair care, soap etc., only when something runs completely out, and I will look for a coupon first)
- Professional license and organization yearly fees
- Household cleaning maintenance (trying to make do with what I already have, only buy when something runs completely out, and look for coupons)
And some exceptions:
- Anything related to the wedding until June (it’s already pretty low budget, and we’re currently spending below our planned expenses)
- Other job-related necessities
And anything not on this list will count towards my $100 spending allowance for each month. So far, I’ve done really well this month. Only spent $3.50 on non-needs in the first 10 days!
I originally came across the idea of abstainers vs. moderators on Gretchen Rubin’s blog The Happiness Project. Understanding this distinction has really helped me in setting goals for myself that are realistic. The idea is that some people are moderators; when project.com/happiness_project/2012/10/back-by-popular-demand-are-you-an-abstainer-or-a-moderator/” they are making a change, such as giving up soda or swearing off trashy gossip websites (both things I’ve tried to do), they are most successful when allowed to indulge every once in a while in the temptation for a Coke or a time-wasting celebrity news story. When a moderator tries to deny herself that pleasure forever, she is much more likely to lapse and fail at the new lifestyle change. Abstainers, on the other hand, are more likely to succeed when they give up something altogether. When an abstainer tries that soda “just this once,” it is much harder to go back to her goal.
According to Gretchen,
You’re a moderator if you…
– find that occasional indulgence heightens your pleasure–and strengthens your resolve
– get panicky at the thought of “never” getting or doing something
You’re an abstainer if you…
– have trouble stopping something once you’ve started
– aren’t tempted by things that you’ve decided are off-limits
I know that I am an abstainer. I found it less tempting to completely give up soda and sugary drinks for an entire month than to try to limit myself by having one only when I’m out to dinner, or only once a week. As another example, I can easily stop myself from buying Oreos at the grocery store, but if there is a package at home, I devour them in two days, unable to eat them only in moderation.
Once I realized this fact about myself, I’ve been more successful when making changes in my lifestyle (although not all have been successful). I also applied this to my new spending and savings plan. I believe that by limiting myself to a strict limit for spending will be more effective for me than trying to stay within a budgeted amount for a variety of different categories. By not allowing myself a miscellaneous/entertainment category to justify unneeded purchases, I will be more likely to stay within my spending goals.
That’s what (I think) will work best for me. For the moderators out there, it may be more effective to allow some indulgences in your monthly budget. You can read even more about abstainers and moderators here.
I know that in order to meet my new savings and spending goals, I need a clear plan. But I also knew that I needed something very simple, (because I won’t follow through with anything that takes a lot of time or effort) and with strict guidelines (so that I can’t talk myself into anything that would be counterproductive). So, based on The Spending Diet from Anna at And Then We Saved, here is my savings plan for 2013.
- Spending: Make a list of Needs. These are things like rent, food, dog care, and other necessities. If something is on the Need list, I will spend money on it. I will set aside $100 each month to spend on non-needs. When the $100 is gone for the month, there will be no more spending on non-needs.
- Savings: I have automatically set up so that 10% of my income goes to our Emergency Fund (until we have 6 months worth of living expenses), 10% goes to retirement investments, and 10% goes to a long-term savings goal — right now, that’s our wedding savings account, and once that is done, we will start saving for a new car.
- Any unexpected income goes to pay off loans.
- At the end of the month, add total income and subtract total spending. Anything left over is an extra loan payment.
And that’s it. Simple, straightforward, no ambiguity (I hope). I’ve gotten my fiance to agree to commit to this for the next 6 months, and we’ll evaluate how successful we’ve been and how deprived we’ve felt from spending. I hope to follow this for at least the rest of 2013, and I’ll be writing about my successes and my trials here!