Are “Buy Nothing” Weeks/Months/Years Constructive Exercises Or Short Term Fixes?
Posted on June 29, 2007
I have seen many blogs and personal finance writers covering people doing a “Buy Nothing” period of time. It is often a week or month long, but I have seen as long as a year. The criteria ranges from insanely strict (no electricity and toliet paper or same dress for a year) to liberal (no spending on anything unnecessary but gas, food, electricity are okay). “The point [of buy nothing periods] wasn’t just to save money. It was also a way of examining our relationship with money,” noted personal finance author Liz Pulliam Weston.
The “Buy Nothing” concept is a good exercise in restraint and self discipline but how much does it curb long term spending? Without a solid budget the person may quickly resort back to the previous spending levels, even rewarding themselves extravagantly for a task completed successfully. The focus of improving your personal finance track record should revolve around tasks that will have lasting effects including:
- Evaluate spending levels. Track where you are currently spending money.
- Stop creating new debt. Curb unnecessary expenses and eliminate using credit cards.
- Categorize spending. This should break down expenses into wants and needs with priorities attached to each.
- Create a budget. After you evaluate where your money the next step is to create a budget to eliminate debt. Even if you do not create a formal budget try to stick to the 60% solution. The 60% solution attempts to keep committed expenses at or below 60% of gross income.
- Eliminate debt. Begin paying down credit cards with highest interest rate first.
- Establish emergency fund. You will never get out of debt if you have to rely on credit cards in emergency situations. Unexpected expenses constantly pop up so you have to be prepared for them. Check this emergency fund archive post for references of how to create an emergency fund.
- Increase income. If necessary get a part time job, work overtime, or apply for higher paying jobs that you may qualify for.
While I agree challenging yourself with a “Buy Nothing” period is a great way to examine your personal relationship with money, ensure you have addressed the above principles to make debt elimination a long term solution.
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6 Responses to “Are “Buy Nothing” Weeks/Months/Years Constructive Exercises Or Short Term Fixes?”
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I really enjoyed this post, since I have just stared a “buy nothing” year (in Iraq) because I was in so much debt. It can be very liberating to watch your debt disappear so quickly. Sometimes its rough giving up so much to be out of debt…
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