The Never Ending Money Challenge

No, this isn’t a challenge for all of you.  This is just a comment on how when it comes to Money it feels like a never ending challenge.

I recently read The Barefoot Investor.  This is an Australian book, but a lot of the info can be applied across countries.  New Zealand definitely has different tax systems and super schemes in place, but if you know a little about your own situation, you can apply most of the logic and suggestions to what you have in place.

So, for a while now I have been saving 40% of my pay, kind of.  I’ve also been using my credit card, so that’s not quite true.  However if you add in my automatic Kiwisaver deductions and the money I put into a private super scheme, I probably do average over 40%.

Having said that, “paying yourself first” does mean that sometimes I’m scrimping to find the money for that last bill that goes out before my next pay.  I think no matter what you earn, you feel you could always have more – and lifestyle creep and hedonic adaptation are sometimes part of the reason.

For the first time in a while I’ve not paid my credit card off in full.  So now I’m applying the Barefoot Investor’s ways to get rid of that debt.  I don’t like it and I’m not sure I agree with his method.  I’m in two minds to delve into my super to pay it off and start from a level playing field.  However, his method got himself out of a lot of debt and into a place of very good security, so I’ll keep at it for another month before I decide.  My credit card limit, at least is quite small so we’re not talking thousands and thousands of debt.

By following the book I’ve reviewed my super, my bank fees, my insurances and have set up the accounts he suggests.  I do like a lot of what he says.  But I could do more.  I don’t particularly want a second job to bring in income, so I’ve been considering a “no spend” challenge.  This is what really prompted this post.

Just the other week I read a blog online (I’m not linking it as I’m going to be quite critical about it) for a no spend challenge.  Now most no-spend challenges have exceptions e.g. if something breaks down you can replace/repair, one in-one out for wardrobe items (particularly items for work) … but this one was unreal.

First there was an exception for travel.  They could still have two vacations away in the year (substantial cross-country/state trips).  Then there was an eating out exception – two meals a month.  A fun budget included buying a gaming console and some “old school” games, plus four more games through the year.  Also day trips – including one to a theme park.  Now I don’t know much about America, and how much it costs to do some day trips, and the blog didn’t state how many day trips, but if you’re paying for petrol/transport and entry to something like a theme park, it’s going to cost.

They were also renovating a house so they were allowed to spend money on that – up to $20K.  I thought that renovating a house wasn’t something you’d include in a  no-spend challenge as it doesn’t really fit the mantra – but they are probably adding to an asset, so fair enough, I guess.

However, isn’t the point of a no spend challenge, not spending?

I’ve been thinking about whether I will do a challenge like this.  I’m not a shopaholic, but there’s room for improvement.  I would think that replace/repair, personal items (such as cosmetic/beauty) as they run out, wardrobe replacements (within reason) are possible exceptions.  I’m saving for a trip for a significant birthday later in the year, and a month or two of being very controlled would probably work for me.  It’s like dieting; saying you can’t have something often means a binge.

In reality though, I think doing things like reviewing your subscriptions (I’ve just canned Netflix – I barely watch it), checking your providers (upgraded (!) to a cheaper option with my internet) and watching your daily frivolous spend (magazines/snacks/coffee anyone?) are a good thing to do regularly and are an easy to-do for everyone.  Food is one of my biggest culprits, so by being mindful, menu planning, buying to a list, making my own snacks, taking my own drinks – or using the free drinks at work are making a difference.

If I do a no-spend challenge, it will only be for 30 days to begin with and will include one indulgence – my monthly foodie date with my mates.  So what do you think?  Should I give it a go? Have you done a no-spend challenge?  What were your rules and did it work?


2 responses to “The Never Ending Money Challenge

  1. I like the idea of having a wardrobe replacement exception. My issue with No Spend Challenges is that they often just defer spending on things like wardrobe replacements. A real No Spend should be on all true discretionary / luxury spending.

  2. Oops hit send too fast! I also like the idea of keeping the foodie date out of it…some things are important for a host of reasons and it can’t be too pedantic!

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