smart spending

Jump-start savings with no-spend month

Like standing on your head

"Anyone can do anything for 30 days," says Liz Pulliam Weston, author of "Easy Money: How to Simplify Your Finances and Get What You Want Out of Life."

She estimates the 30-day spending crash diet can save families an average of $400 and put them in a better position should a job loss or other calamity occur. "If you do this, you have taught yourself what your (financial) weakness are, and you have already experienced the difference between a need and a want," Weston says.

If you want to try your hand at 30 days of super-frugality, there are several ways to structure your month of not spending.

  • Set a dollar figure for spending for the month and stick to it.
  • Cut out all luxuries without setting a dollar limit
  • Combine a 30-day short-term spending diet with an effort to boost your income.

Setting a monthly limit

Like the Meeks family, you could give yourself a set budget for the month, and then try to fit all household purchases into that budget. Recurring monthly bills such as your mortgage, student loan, car payments, utility bills and credit card bills are excluded from this amount.

Joy Pedersen Harkins, a new mom in central California, limited her spending to $300 last November. This covered gas, groceries, eating out, clothing, entertainment, as well as any extras. To help her stick to her budget, Harkins paid cash for everything and wrapped her credit card in tape so she couldn't use it.

The limited budget approach can require creativity. Harkins spent only $1 on entertainment for the entire month: on four Oprah's "O" magazines she found at a thrift store. Her biggest budget-buster was meat from the grocery store. If she decides to do this again, Harkins plans to look for lower cost alternatives to meat to stretch her grocery dollars.

Cut all luxuries

The second approach to the 30-day spending fast is to forgo the set-dollar-amount budget and simply cut out all luxuries instead. In this case, money can only be spent on necessities.

That is how Shannon S. structured her month. "The only things we were allowed to spend on were milk and eggs from a local farmer every week, rent, utilities, gas and anything (needed for) an emergency," she says. "There was to be no other spending. We did not do any shopping -- grocery, merchandise or otherwise."

Weston and her family bought only necessities in January 2006. "It showed me there were things I was spending money on that I didn't need to."

For instance, previously if she had 15 minutes between meetings she would fill the time by buying a coffee. And though she rarely bought new clothes for herself, Weston didn't think twice about outfitting her toddler daughter with new duds. "It surprised me how much of my spending was automatic."

The key to making the second option effective is to dig deep to determine what is a luxury and what is truly a necessity, says Harrine Freeman, author of "How to Get Out of Debt: Get An 'A' Credit Rating for FREE."

This will vary from family to family but, in general, recurring bills, gas and groceries would be considered necessities while lattes, restaurant meals, and new shoes would definitely be off-limits.

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Just don't fool yourself: Even groceries can be a luxury item. "You don't have to eat steak and drink bottled water," Freeman says. "There is nothing wrong with casseroles and tap water. So many people have forgotten what it really means to live frugally, like our parents and grandparents did. All of those little things add up."

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