We all tend to spend more than usual around the holidays. You may have heard about the idea of planning for a no-spend January as a way to offset an over-spend December. It’s a great idea in principle, but the key to making it happen is “planning.” Without a plan, you may find the idea is impossible to achieve. Use these budgeting tips to help you create a plan that fits your life.
Think You Don’t Spend That Much During the Holidays?
As a child, I can recall my parents saying they typically paid off all of their holiday spending by April of the next year. Of course, they had six kids, so maybe that accounts for both the higher spending during the holidays and the longer pay-off timeframe. However, even though the average size of an American family has decreased since those days, Americans have not slowed down on their holiday spending. In fact, the National Retail Federation’s annual consumer spending survey estimates that:
…Americans plan to spend an average of $1,047.83 this year, up 4 percent from last year ($1,007.24).
NRF 2019 Holiday Forecast
That tidy sum is an average, so it would seem that many of us do not spend our holiday months (typically, November and December) in a frugal mindset. And frugal-mindedness may be the antithesis of the holiday spirit of gift giving and spending time with loved ones, especially when it means traveling far to do so.
Creating a no-spend January plan can be a great way for you to embrace the best that the spirit of the holidays has to offer, while also letting you brace for the sting you know will be coming in the New Year when the bills arrive.
Even if you are frugal year-round, you may still want to give a no-spend January a try. Creating your own plan may help you achieve other financial goals you have in mind for next year.
Caveat to a No-Spend January
Before you start implementing the steps for your no-spend plan, keep in mind the month does not have to be January. Maybe you roll right into the New Year with lots of unavoidable expenses. Maybe the effects of Seasonal Affective Disorder (SAD) hit you in January, or you deal with them throughout the winter months. Choosing a month later in spring may be better for you for any number of reasons, as you endeavor to right your budgetary applecart.
Steps to a Successful No-Spend Month
Here is an important tip as you follow these steps: don’t think of the plan you create as “punishment” for overspending. If calling it a no-spend plan sounds punitive to you, think of it instead as an essentials-only plan. This is about finding ways to keep expenses to the basics for one month to balance against the extra expenses you incur around the holidays every year!
Follow these four steps to ensure your January is a successful no-spend month and get your New Year back on sturdy financial footing.
1. Prepare Your Plan Now
The holidays are busy—nevertheless, now is the time to sit down and prepare your plan. Create a list or spreadsheet (or use a budgeting app) and include all of the bills and expenses you expect to have in January. Check last January’s bank statement to help you better account for everything. Add the best estimates you can for the cost of each item, and be sure to include monthly cost for groceries, gas, medical, and so on.
Next, think about any upcoming events you may have expenses for, such as birthdays, entertainment and dining-out plans, travel for yourself or the kids, and so on. Account for them as best you can. Include and set aside money for surprises or spontaneous occasions as well, because we all have at least one of those in any given month.
Add up the totals and compare against your income for the month. What’s left? Can you save all of it?
Decide what portion, if not all of it, that you want to save—that’s the goal to set.
2. Communicate About Your Plan
Don’t keep your plan a secret. Talk to your family about what you want to do. You can also involve them in creating the plan and even setting the goal for the month. If you don’t plan to use your savings goal to pay off the holiday bill, discuss what other ideas might make sense for the savings. Maybe you start a travel savings plans, deposit it in a college fund, or use it for home repairs. Whatever you decide to do with those savings, it just feels more rewarding to share in successfully reaching a goal.
No one at home on your side with this budgeting idea? Do it anyway and talk to your friends about it. Maybe you can find a friend who wants to give it a try. The key to success with your plan is not to try to do it all on your own.
3. Plan Meals for the Month
How much did you include for one month’s worth of groceries? You can spend less than what you’ve budgeted when you meal plan. Potentially, you can then set aside those savings as part of your goal, too. Here’s how:
Most families have go-to meals—the ones everyone likes for dinner--so map out the month. Fill out gaps in the calendar with new meals ideas. Get family members involved in the search for recipes. Then map out the rest of the month with those new recipes to try. You may end up with more go-to meals that everyone likes, and you’ve mixed it up a bit while encouraging everyone to try new things.
Make a Calendar
Put the meal plan on a calendar in your kitchen so everyone can see what’s for dinner. Each week, create a grocery list and buy only what you need for those meals. (Want to encourage budget consciousness in your kids? Add the estimated cost for dinner each night to the calendar, too—they’ll better understand the cost of the foods they consume and it’s another way to get them to participate in your plan.)
Shop in Bulk
With the calendar mapped, inventory all of the essentials you will need to cook and bake the dishes in your meal plan. Think olive oil, eggs, spices, and so on. Figure out which items are running low, or that you will need for recipes. Add them to each week’s grocery list.
You also need to plan what you will need for breakfast, lunch, and healthy snacks for everyone. Buying in bulk can help you save, especially on lunch items and snack foods.
Do your kids love cereal for breakfast? Figure out how many boxes you need each week and be sure to buy a variety. Nothing blows a budget quite like boredom. Whatever your breakfast menu looks like, add those items to the weekly grocery list.
Another great way to save on lunches is to make enough, or a little extra, in every weekday dinner meal you plan for the month. Leftovers will taste even better when you calculate how much you will save by not buying lunch during the workweek.
Finally, the term “groceries” refers to more than just food. Inventory what you have to determine what you will need for the month for toiletries, personal care, and paper products. Again, buy in bulk when you can at the beginning of the month, but only buy those items you know you will need before the end of the month.
4. Plan for Free Fun
What monthly expenses in your no-spend budget can you say no to? And what events can you just not ignore or skip during the month?
As you consider both those questions, keep in mind that for some things, you can find fun, free ideas that make great substitutes, possibly even for those “can’t ignore” events you have to plan. You just have invest a bit of time to research free activities to do instead—when that makes sense, of course. You cannot skip birthdays, for example, but maybe you can search for ideas on creating an awesome birthday party at home that helps to keep your expenses down.
If you have visitors coming or kids to engage on weekends, there are plenty of resources to help you find free stuff to do. Check local websites or pick up a newspaper and look for upcoming free events. Contact your local tourist bureau to get information on free tours, festivals, and current events. You can also google your town’s name and the words “free activities” to discover ideas that are free and fun.
Try these other ideas to help you and your family fill your no-spend month with free fun:
- Spend time with nature; take a scenic walk or visit a botanical garden.
- Catch a sunrise and a sunset. Try doing both in same day.
- Look for walking tours, visit [free] local museums or art galleries.
- Take a day out to tackle an organizing project at home, like cleaning out a closet.
- Binge on movie or television shows.
- Plan a day off from cell phones, internet, and email
- Play card or board games, or do a puzzle
- Catch up on reading. Go to the library and check out a stack of books, audiobooks, and DVDs Many libraries also let you download books and audiobooks and stream movies.
- Learn how to DIY a no- or low-cost home improvement project you've wanted to do, or try one of these ideas. Your local library is also a great, free resource for DIY learning.
Remember to include in family members or your friends in plans and ideation – you may find out about things they want to do that you didn’t know.
A Tip for Year-Round Budget Protection
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