Last month, my wife and I had a “no-money weekend.”
The rules were simple: survive from Friday night through Sunday night without spending a dime. Of course, there were some lingering questions. Did driving count as spending if we were going to a free event? What about gift cards — could we use those? (Hint: No.) This sums up a lot of truths about money: the concepts are simple, but the execution is complicated.
In the end, we did it. We took our daughter to a new bike path, and got creative with dinners, cleaning out the fridge for a stir fry. When it was time to relax, I dug up some beers our friends had left: Yuengling and Coors light, instead of buying the hoppy stuff I have a weakness for.
My wife and I were cheapskates already, so the idea of a “no-money weekend” was less of a stretch for us than it might be for others. We’ve built our frugality habits for years, and we live in Rhode Island, not Manhattan.
But even with those advantages, I had the nagging feeling that we weren’t really succeeding with our plan. It came and went over the weekend, a voice in my head murmuring: “You know – there is no such thing as a no-money weekend.”
And that voice was right.
Maybe if we lived on a homestead in the backwoods of Alaska, we could spend no money for a few days. But if you own a refrigerator you’re spending money while you sleep.
I started thinking about all the ways that money trickles silently out of my bank account without passing through my wallet. After I tallied ours up, it was bigger than our discretionary budget.
That’s probably true of most of us, and it’s a good lesson: if you want to save, start with the spending you don’t see.
Here’s a tally of money we actually spent during our “no-money weekend”. For monthly expenses, I took the total and multiplied by 2/30 to get the cost of two days of spending.
|Electricity and Gas||$12.25|
This is how most money leaves our lives, as a kind of financial background noise, which, like the hum of an air vent, we rarely notice.
My family spends roughly $80 per day automatically. And while it’s a little depressing to know that we can never actually spend “no money,” $80 is not so bad by American standards.
I’m particularly proud of my wife’s ninja-like grocery shopping ($14 per day for a family of three). We don’t have car payments or student loans anymore, we don’t rent a boat slip or a storage space. But this $165.34 is much more than we’d spend going out, and if we had to tighten our belts, it’s the first place we’d start cutting.
Let’s talk for a second about why saving is important. (I’m not just doing it for my health.)
If you don’t save, you can’t invest. Your savings won’t be enough to survive in retirement, but they might be if you grow them. Because your assets are a bathtub. The faucet pours water in. That’s your income. On the other side, water drains out. Those are your expenses. When you retire, the faucet turns off, but no one plugs the drain, so you’d better have a full tub.
As an exercise, try to measure your involuntary spending. Use my list and add anything else you can think of.
Once you’re done, imagine yourself sitting silently in a corner of your room. You’re not consuming anything personally. You’re not going anywhere. You’re not shopping online.
But your refrigerator is humming in the kitchen, a dehumidifier whirs in the basement. You’re paying car insurance and other automotive fees whether you drive or not. Try to come up with an estimate of your daily “background” spending. Do you hear that? That’s your savings – and future investments – dripping away.
Now do something about it.
<em> The views expressed herein are not intended to serve as a forecast, a guarantee of future results, investment recommendations or an offer to buy or sell securities by <a href=”http://www.futureadvisor.org”>FutureAdvisor</a>. Differences in account size, timing of transactions and market conditions prevailing at the time of investment may lead to different results, and clients may lose money. Past performance is not indicative of future results.</em>