January Budget Diet

December is a month for both gluttonous eating AND gluttonous spending. For me, December was rough financially. With a big vacation, Christmas and having to unexpectedly purchase a new vehicle, it’s been financially stressful to say the least. Fortunately, I’m a good saver and have a rainy-day fund I am able to tap into in cases of emergency, which I have unfortunately been doing. So this January I am implementing a plan to replenish that fund. To fortify my funds and get back to my financially healthy happy place. 

This is my January Budget Diet plan

Cut out all unnecessary spending

So, on the surface this is pretty vague, which is why I created some parameters. Below is a list of necessary and unnecessary spending:

Necessary:

  • Groceries (including one bottle of wine)

  • Pet food

  • Utilities

  • Mortgage

  • Transportation: car payment, car insurance, and light rail pass

  • One meal out per week

  • One coffee out per week

Unnecessary:

  • Going out to eat when I could be preparing food at home

  • Random trips to Target

  • Buying books from Amazon

The unnecessary bucket is pretty simple. I want to focus on meal planning and not allow myself to simply dismiss the food I brought with me to work in favor of something tastier that costs $10 a pop. I want to make sure that the dinners and lunches I make are compelling enough that I don't default to going or to eat. Same goes for coffee. If I am catching up with friends I haven’t seen in awhile, then grabbing a cup of coffee is perfectly fine. If I am buying a cup of coffee each morning at work out of habit, but not out of necessity, then that’s not fine. With most changes in life, this is going to require quite a bit of planning and organizing so I know when I can treat myself.  

Audit my recurring payments

I am a fan of the self-audit. And before January begins I want to specifically audit my automatic purchases - what’s coming out of my bank account automatically each month? Am I spending my money in ways that make sense? Are they necessary expenditures? By this I mean both legally (paying back student loans) and personally.

While I need to do a deeper dive into my expenses, there are two things off the top of my head I know is spend money on automatically each month. My:

It’s the end of the year and I am sure many of you are thinking about your New Year’s resolutions. About eating healthier now that the holiday season is coming to a close. And you are thinking of ways to live a healthier lifestyle. You may even be in the market for a gym membership.

Here's what I know: I don't use gym memberships. I want to be the person that can consistently go to the gym. I like the feel of it. I even like the smell of a good gym. The amenities are shiny and it seems like such a fun way to spend your time. But I don't stick to it. So, in acceptance of this, I've just cancelled a membership to a local gym chain. It's the second gym I've quit in the past couple of years. Discontinuing my membership will save me nearly $100 a month. That savings is bound to add up quickly.

The other recurring item I have is my Ipsy bag. Ipsy is one of those monthly subscription boxes that sends makeup, face products, nail polish. It’s a lot of  fun, and at $10/month it isn't a high ticket item per say, but it is something to take a look at. After mulling over the cost/benefit of continuing the box, for me, it’s worth it. Once a month there is a little present in the mail for me to unwrap. I love seeing the fun pink packaging and it's worth the minimal cost.

Pay off debt

Before January I resolve to pay off the debt that is the low hanging fruit. For me, it was the last payment of my student loans (woot!) and paying off my Macy's credit card.

Having bought a house earlier this year, I opened a new credit card to help with the cost of a new couch. While I could have kept paying the minimum payment required, I opted to start the new year with a clean slate. I'm fortunate to have the luxury to do so.

You might have some low hanging fruit of your own. Those credit cards or student loans that are almost paid off. If you have something you can pay off, I highly recommend it. It's freeing and for me, I feel like I can check off a box from the mental spreadsheet I carry with me constantly.

In summary

I'll be sure to report back how well I adhere to my plan at the end of January. To make this plan work I will need to be thoughtful in my meal planning and preparation. Will need to see if there are any other recurring payments that I'm forgetting, and will see if there any other outstanding debts that would be paid off.

So what do you say? Want to start the new year on a diet?