A spending freeze is a great way to save money. Moreover, it shows you areas for continued savings over time. However, you can’t just stop spending money all together. At least, most of us can’t. Therefore, you have to implement some rules to stick while on spending freeze.
What Is a Spending Freeze
A spending freeze means that you stop spending money for a set period of time. A thirty-day spending freeze is a really smart time frame. It allows you to significantly cut back spending, saving a lot of money quickly. That said, you can set your spending freeze for any amount of time from just one day to a whole quarter if you’re ambitious. One week or one month can set you up for better success, though.
5 Rules to Stick to While on a Spending Freeze
Here are some of the rules to stick while on spending freeze:
1. Exclude Fixed Expenses
There are certain things you don’t want to stop paying. For example, you must continue to pay your rent, utilities, and minimum credit card payments. After all, you don’t want to create problems for yourself. Therefore, exclude these types of expenses from your spending freeze.
2. Set A Goal For Your Savings
It’s easier to stick to a spending freeze if you have a goal in mind. Therefore, you should explore your income, budget, and spending. This gives you a general idea of how much you expect to save in the spending freeze time frame. In addition to a dollar amount, set a specific goal for that money. You might use it to pay down debt, start an emergency fund, buy a special gift, etc. If you know why you’re not spending in the short-term, it helps you stick to the plan.
3. Define Wants vs. Needs
A spending freeze is all about not spending at all on your wants. However, you do still have to spend money on your needs. For example, you still need to eat. First, define your wants vs. your needs. Make a list of your needs. Then figure out the least amount you can budget to spend on them.
For example, you need to eat. What’s the lowest amount of money you can spend during the spending freeze to meet that need? If you already have food in your freezer and pantry, then you may not need to spend much at all. On the other hand, you might slash your food budget, spending only within the new limit.
Medical prescriptions, gas for your car, and pet food are a few examples of things you might need. Ask yourself, though, do you NEED them? Can you walk or bike instead of driving your car? Spend on your needs but only the minimum amount required to meet those needs.
4. Avoid The Shopping Spree
Many people go on a shopping spree just before or after the spending freeze. This defeats the purpose. Create a hard and fast rule that you’ll implement normal spending in the days and weeks before and after any spending freeze.
5. Keep a Journal
Use this to track your spending urges. Every time you want to spend, write an entry about why. This often deters necessary spending. If you do spend during the spending freeze, note how much you spent, on what, and why. A spending freeze isn’t just about saving money for that short time period. Instead, it’s about learning where you can scale back on unnecessary spending all of the time. The journal will help immensely towards this end.
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