Challenge Your Budget Cutting Skills

Saving money. It is something that tops countless numbers of New Year's Resolutions lists around the world. As a new year begins, many people are looking for ways to trim the fat from their budgets. We are happy to throw down the gauntlet with ten financial challenges to help you cut back on your spending or enhance your ability to save.

Save $2,023 in 2023

Having a savings goal is a good thing. With this theme, you can have a new one each year. By saving the year in dollars, you can go from one year to the next with a savings goal at hand. For 2023, that goal involves depositing a specific amount of money in your savings account each week to add up to a total of $2,023 for the year. To be successful, for each of the 52 weeks in the year, deposit $38.91 in your savings account. If you do that, you will reach your goal with a few cents to spare. In 2024, saving $38.93 will put you over the top of your annual goal.

Monthly Savings Theme

With this savings theme, you tackle a specific area of your budget each month and find savings in each. For example, in the first month, it might be your monthly grocery bill. In the second, it could be transportation costs. In the third, entertainment expenses. Each month, your budget focus will change as you focus on finding ways to cut costs in a new budget category. Of course, for this to be a genuinely productive challenge, you will need to maintain the changes you make in your spending habits and carry them forward each subsequent month.

365 “Less Things” Challenge

This challenge is about minimizing your lifestyle. It involves getting rid of 365 things in your home. One for each day of the year. Every day, look for one thing you do not need or use and get rid of it. The key is that you don't replace these unnecessary things. You remove them freeing up space in your home and reducing clutter in your life. Now, this challenge will not impact the bottom line of your budget. However, decluttering your life may help you avoid making future purchases of unnecessary items.

Try the Store Brand

While there may be some products where the brand name is king, there are store brands out there that can take the place of others and enable you to enjoy substantial savings. With this challenge then, you will try a different store brand product each week and see how it compares to the name brand you have always purchased. From laundry detergent to packaged cheese, to canned veggies, to plastic trash bags, to snack foods, there are alternative products out there that can deliver the quality you seek at a better price point. Give them a try!

Lower (or Raise) Your Thermostat

Depending on where you live and the season of the year, the dollars you spend heating and cooling your home can have a measurable impact on your budget. With this budget challenge, when heating your home, you will lower your thermostat by one degree to help you save big on your heating bill throughout the winter. Reverse the challenge in the summer and raise your thermostat by one degree while running the air conditioner. If one degree does not make any difference to you, try two. Maybe you will save even more.

Pack Your Lunch

Switching from buying your lunch near the office to bringing a packed lunch to work each day can save you significant amounts of money. Think of it, the average lunch purchase costs somewhere in the neighborhood of $11. That's $55 per week. At 52 weeks per year, you could save up to $2,860 per year by packing your lunch. Even if you only pack your lunch four days a week, allowing yourself a once per week splurge, you would save quite a bit of money. Plus, you would also save on gas as well since you are not leaving the office for your lunch!

Use the Library

If you have not been to the library in a while, you have been missing out. No longer is it a quiet refuge for dusty old books. At your local library, you can find a wealth of media to enjoy and countless learning opportunities for yourself and your family. Libraries today offer free access to a wide variety of media including:

  • DVDs
  • Books
  • CDs
  • Audiobooks
  • Magazines
  • Newspapers

That makes your local library a valuable free alternative to streaming movie rentals or other media purchases. Many libraries today even offer electronic services where you can check out eBooks and audiobooks online. You don't even have to go inside!

Libraries also host educational events, meetups, and more. Most of these meetings are free or at a low cost allowing you to get even more from the use of your local library.

"No Spend" Days

Some people call them "spending fasts" and other names. The key is that you go for a designated period: a day, a weekend, a week, or even a month (for the truly brave) without spending money. This exercise is not just about not spending money. It's also about learning to appreciate things that are free. It encourages you to take advantage of things like your public library, free entertainment events around town, or neighborhood parks instead of spending money on 'stuff.'

The 10x10 Challenge

The 10 by 10 challenge is one that encourages thriftier habits and saving. While it doesn't directly put cash into your pocket, it does show you how to do more with less. The challenge is for you to select 10 clothing items that you can mix and match into creating 10 different outfits. For the next 10 days, you are only allowed to wear only those 10 clothing items. The challenge teaches you that you can do more with less and don't need as many clothing items as you might think.

$5 Savings Challenge

This one is interesting because it doesn't rely on a weekly or monthly deposit. It does rely on the regular use of cash for transactions, however. It works like this. Whenever you find yourself with a $5 bill, you put it into your piggy bank instead of spending it. If you frequently shop with cash, the savings can quickly add up.

So which one of these budgeting challenging tips are you going to implement? Perhaps all?

Information presented in the Northwest Financial Wellness Center is provided for educational purposes only and is not related to actual Northwest products or services. Northwest makes no representations as to the accuracy, completeness or specific suitability of any information presented. Information provided should not be relied on or interpreted as accounting, financial planning, investment, legal or tax advice. Northwest recommends you consult a professional for any specific guidance you are seeking.