A spending freeze is just that – not spending any disposable income for a day, a week, two weeks or longer. A spending freeze can help you learn how you have been spending (or wasting) money in the past, and add extra money to your savings account once you’re done. If the thought of not spending any money for a week or longer seems like too much, consider this: it is easier to work through a spending freeze voluntarily, rather than living through one forced by lack of emergency funds.
Before you start a spending freeze, there are a few things you should do first.
Spot Check Your Finances- Make sure the payments you do make, utilities, ect., are the best deal possible. Devote some time to shopping auto insurance discounts, trim your cable TV costs, and ask about any savings or budget plans offered by your utility companies. Review statements for unnecessary fees, and reconsider all ot the monthly auto-pays you have in place. Eliminate services you don’t use any more, or that are just not worth the money.
Update Your Monthly Budget and Savings Goal- Set a goal to save a specific amount and have a definite plan for the money once it is saved. Update your monthly budget to determine how much you expect to save during your freeze. Then, write down your plan for the money you’ll save during your freeze. Temptation to spend will be easier to face if you can picture paying off the credit card balance, making a healthy deposit to your savings, or paying for that small home improvement project with cash.
Stock Up and Prepare- Make sure you have basics on hand to last through your freeze – running out to the store for toothpaste or laundry soap will be hard to avoid if you run out, defeating the purpose of your freeze. Take a complete inventory of your pantry, freezer and fridge and plan meals around what you already have. Grocery shop ahead of time – and plan some flexibility for days that don’t go according to plan, to prevent last minute pizza orders because your planned dinner that day just did not work out.
Have you ever used a spending freeze to save money? What did you learn from your freeze? What is the longest time you have gone on a spending freeze?