One thing that often works considerably to help get control of your immediate finances is to stop spending. Yes, that sounds impossible, but working toward Financial Freedom With A Spending Freeze is in fact quite doable for many people. We are often surprised at how much we spend unnecessarily over the course of a week, month or even year when we look at it closely.
How necessary are your daily Starbucks coffee drive thru dates? Let’s look at this. Let’s say you go to Starbucks every day and spend $5 that equals out to be $25 per week, $100 per month! That is a electricity bill!
Two years or so ago, our family participated in a spending freeze. I won’t lie–it was VERY hard to do. However, it made us realize that it could be worse. We could be in a situation where our income was SO limited that we wouldn’t have a choice but to not spend money on “extras”.
Here is how we planned our spending freeze:
How to save money with a spending freeze
1. Set a time frame goal. For some it may be important to do a spend freeze for a short period of time first, then gradually work up to longer times. Set a time frame of one week, one month or one year. Get serious about your financial freedom goals by being realistic about what you can afford to do in this spend freeze. You will have to make allowances for some expenses, but that is in our next step.
2. Create a list of allowable expenses. It is expected that you will continue paying bills like your rent/mortgage, vehicle payments, insurances, debt payments, etc. A spend freeze is more about using what you have on hand, and not buying anything unnecessary.
Things commonly given up in a spend freeze:
- Groceries. (This is usually for shorter times like one week or one month where you use what you have on hand in your pantry, freezer and refrigerator.)
- Eating Out, Movies and other outside entertainment
- New Clothing, shoes or accessories
3. Get creative. To save money with a spending freeze this will often leave you with needs or desires that result in frustrations because you aren’t allowed to simply go and purchase something. A special dress for an event can be handled by upcycling something you already own, or borrowing from a friend. That craving for your favorite takeout can be handled by experimenting in the kitchen with the stockpile of food you have in your pantry. It can also teach you things you should keep on hand at all times like various foods, entertainment options like games and movies, or a spare fancy dress for the occasional last minute event.
4. Review the results. At the end of your spend freeze take the time to look at your budget and how you managed. Evaluate your increase in income, and how you managed the spend freeze. Where there particular items you had a harder time giving up like your morning coffee run, or the Thursday night pizza on the way home from ball practice? Perhaps you can learn to create these things for yourself at home to avoid those expenses in the future.
A spend freeze to help you rid yourself of debt, as well as save for your financial goals is a great experiment in will power and determination. Individuals who can successfully complete a spend freeze often find themselves able to dedicate even more time and money toward their financial freedom goals. Those who struggle a lot with a spend freeze may still need to deal with reasons why they are in debt in the first place.