Although I have been retired for three years, I still function in vacation mode during the summer months. I like to meet my friends for lunch and dinners at outside cafes a few times a week, and I also take more day trips and vacations during this time. Eight of my friends and family members have their birthdays during the summer months. It is the most expensive time of the year for me.
When I was working, I would designate September or October as a low-budget month. This bare-bones plan would reduce my expenses significantly and help compensate for my high-spending summer behavior. While I cut back significantly on my food and clothing purchases, I never felt deprived or resentful. I have continued this practice in retirement and planned additional low-budget months in January and April.
While it may be more challenging for households teeming with school-age children, adults can successfully plan and implement at least one low-budget month a year. Consider the following suggestions:
- Select the most appropriate month for your household. Whenever possible, stay away from months containing multiple birthdays, major holidays, and special occasions such as weddings, reunions, and anniversaries.
- Sit down and have a family meeting before the beginning of low-budget month. Explain the purpose of low budget for your family. You may be trying to recover from a major expenditure or save for next year’s vacation. Expect some resistance from adolescent children. If they are uncooperative, ask them to come up with alternative ways of generating money. They could get part-time jobs, tutor younger children, or run errands for neighbors. Be firm and stress the fact that you will be staying on low budget for only one month.
- Create a low budget for the month by carefully examining each item in your usual budget. Identify which items you could do without for a month. Consider not buying any new clothes or going out to restaurants. Then look at categories you can spend less on and reduce the amount. Invite the children to cut back on one or two frills. Take this opportunity to teach them the difference between needs and wants.
- Visit grandparents and other older relatives. Many of them lived through WWII and developed ingenious ways of stretching dollars. They wasted almost nothing, bought locally, recycled, and grew their own vegetables. Listen to their suggestions and decide which ones could be adapted in your household.
- Plan ahead and ensure that you have at least two family outings each week. Check the community, school, and public library calendars for the month. Take note of any plays, art exhibits, bazaars, parades, and athletic events.
- Encourage the children to think outside the box and come up with their own low-cost and no-cost outdoor activities for the month. Pull out the board games and have a family game night a few times during the month.
- Clean out closets, basements, and garages. Before throwing anything out, decide whether it can be fixed or recycled. Encourage adolescent girls to create new outfits by mixing and matching clothes from the back of their closets.
- Alternatively, you could decide to have a garage sale and split the proceeds among all family members. This could easily become a month-long activity for your family.
- Be flexible. From time to time, houses need new roofs, the car breaks down, the plumbing backs up, and the water heater breaks. While it is difficult to plan ahead for these irregular expenses, do not become discouraged and abandon the low budget. Most service companies give their customers 30 days to pay their bills. If you are dealing with an individual, negotiate payment terms. In the future, allocate a set amount of money each month for these irregular expenses.
Each family member will be challenged during the first low-budget month, but the lessons learned will be invaluable ones, especially for the children. They will develop more respect for you and for money as they learn how to make do with what they already possess. Financial writer and television personality Dave Ramsey said it best when he said, “God’s and Grandma’s way of handling money works. Wealth building isn’t rocket science. The principles are simple, time-proven, and effective. In a nutshell, ‘spend less and invest more’ is a five-word financial strategy that every person over the age of five can comprehend.”