Welcome to Week 1 of the $1000 Money Saving Challenge!
This year, I am running this challenge for Thanksgiving 2020. It begins on September 1st and goes until Tuesday, November 22nd, 2020. In the next 12 weeks, we will not just save for $1000 but we are also going to find the reasons to be thankful for. If you have not yet signed up for this challenge, please sign up first and download the $1000 Savings Challenge Printable to get started.
This week I will write about how to change the way you look at your income and expenses.
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Table of Contents
The goal for Week 1
This week’s Saving Goal: $65
This week’s saving balance: $65
Quick Action for Week 1
Let’s get started.
Quick Win Action –
- Take 5 minutes, locate and open your wallet. If you have $65 in cash there, take it out of the wallet and store it in a dedicated Thanksgiving Challenge Jar! If you do not carry cash in your wallet like most of us, take 5 minutes, login to your bank, and transfer $65 to your savings account set for “ Thanksgiving 2020 Money Saving”. Do not dip into this account for the next 12 weeks.
- Tick mark the space next to week 1 on your printable. You are done for the week
You must have also received additional money saving tips in the email if you joined this challenge.
For now, let us explore the main topic of this week.
Get to know your numbers well
Most of you know your income, if you have a set salary that you earn from your job(s). So you are good. But do you know your monthly expenses? Use this simple income and expense tracker.
This will be handy for next 12 weeks. So take 3 prints of this printable for September, October and November.
If you look at the number of times you had variable miscellaneous expenses in the past few months, you will see a room for savings. We will try to first get rid of these miscellaneous expenses during this week.
But, if your income varies every month, getting your numbers on this paper might be a little harder.
Do not fret, you have a full week to get an estimate of your average monthly income and expenses.
- Gather all your bank statements and credit card statements. Start putting the numbers in this sheet.
- While going through your expenses, put them under 2 main simple categories- Fixed and Variable expenses. There are very few avenues to control fixed expenses but we will tackle the variable expenses first in this week.
- Any expense that is not an essential need is a variable expense. Other essentials such as home, essential travel, insurance, basic food, basic utilities such as electricity, water, heat, sewer, and mortgage(s) are fixed expenses.
- Within variable expenses, try to keep the categories narrow. I have provided a few examples in this list. It helps to know that apart from essential clothing, education, health, everything else is either incidental or miscellaneous.
- Now, ask yourself and your family participating in this savings challenge- Is there any expense you can get rid of this week? The take out lunch, the morning coffee, that app you purchased last year and paying for every single month? Are you going to hit the bar on your way out of work?
If you look at the number of times you had these miscellaneous expenses in the past few months, you will see a room for savings.
Increase the gap between income and expenses
When you want to quickly save money, most of you will agree that there are only 2 things you can do.
- Increase your income
- Reduce your expenses
But, there is no point in doing just one of these two things. If you just increase your income and also increase your expenses in that proportion, just becasue now you can afford to, you did not make any lasting change. If you keep reducing your expenses, there is only so much you can save- thanks to increasing cost of living.
[bctt tweet=”The most important rule for saving money without going into additional debt is to increase the gap between income and expenses.” username=”@debtfreelife101″]
We will talk about increasing income in next few weeks.
But this week, let us start with reducing some common sources of expenses.
Pack your meals for work and school
If you are like most Americans, you are spending at least 5 days a week outside home, either at work or in school.
In recent epidemic, most of us are working from home and studying at home. Most restaurants and coffee shops are still closed. Super bad for the economy, but this is your chance to cook at home for all your meals.
Those of you who love cooking meals for your family, you will love this tip. Just be mindful of not wasting food by trying new recipes that your family do not like or appreciate. Stick with what you and your family loves to eat and cook only that much.
If cooking everyday is hard for you, keep a list of your family’s favorite meals. Learn how to cook a few of these meals at home. Cook at least 2-3 meals from this list in bulk and freeze them.
If you do not enjoy cooking, please at least try to learn basic cooking.
In this pandemic, you must have realized that Cooking is an essential life skill. Everyone of us must know at least basic cooking. Start with simple recipes like pasta, oatmeal, simple one pan lasagna, rice, fish and egg recipes. You can source a few basic food ingredients at local grocery store and set aside few hours every week to save money and time. You will reap more benefits than just saving money. Your health gets better, your mind feels calm and more importantly you learn the mist important survival skill in the process.
Tip- Create a simple menu plan to organize your weekly meals. Stick with this menu plan and buy only the ingredients you need for making meals listed in this plan.
Let me know how your week goes in the comments below.
Postpone non-essential purchases for a week
Is there anything that you are planning to purchase this week? A new book, a new video game, a new clothing item or quick take out menu? If you are, just postpone it for a week. Write it on your wish-list.
Don’t forget to write down the price of this item. Keep tracking the price of this item in the coming weeks. You will see the price fluctuating.
Don’t worry about that coupon offer or sale notification in your email or phone. It will still be there a couple of weeks down the line. If not, you will get the best deal during Thanksgiving or Black Friday sale. For now, turn off unimportant marketing and promotional email and text notifications. It will get easier to save money as we progress further when sale notifications do not try to grab your attention.
If you are willing to wait a few weeks or months for this item is clearly your want/ a desire. But it’s not urgent and definitely not essential. But if it’s something important for you or your work, note it down in the needs vs wants tracker. Don’t forget to add the value of the item or a service.
Congratulations you just saved a few bucks by practicing delayed gratification. Your wallet or bank account is happy!
Replace one expensive service/ item with an alternative economical option
Think of at least one expensive service or an item you or your family members purchase frequently. Is there any better economical alternative for it?
How much money you can save by just switching to that alternative?
For us, it’s my cell phone bill. I used to own an unlimited data plan from my cell phone service provider. I paid consistently for this unlimited plan for year and never really bothered looking at my data consumption. When we started this challenge years ago, I finally looked for ways to reduce my monthly cell phone bill. Surprisingly, I never used more than 1 GB in a month.
I never play games on my phone, neither download music or ebooks or podcasts. Most time, I am on WiFi.
But my family members use the data extensively for streaming videos, playing games. Even they do not use unlimited data. Ever wonder what’s the actual cost of unlimited data plan? This article talks about the hype of Unlimited plans.
So, I decided to quit the unlimited data plan and switched to Ting. Now I just pay $16 a month for basic cell phone service. the best part is they do not do plans. You pay for what you use. Check out their rates here.
Share your wins!
I added this week 1 checklist and a few additional tips on the blog as well as Facebook Page . Like the post, and share what is one thing you noticed you can live without this week? Could you postpone any non-essential purchases this week? How does that make you feel? We all are finding new ways to save and earn our money and time back back during pandemic. Share and cheer each other on so that by the end of this you will have made the necessary changes with our collective support.
Well, that’s it for today.
Next Sunday, you will receive the next lesson in the email. It will teach you all about how to build money saving habits. Stay tuned!
Until then, if you have any questions, feel free to hit reply under this post- I’d love to hear your feedback!
Also, please SHARE the challenge with your friends who you think might need this. No shame in this money game!