First Person: The Benefits of Going 'No-Buy'

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I was reading an MSN Money article not to long ago about a family's experience going "no-buy" for an entire month. The author recounted her family's going no-buy for an entire month in which they limited themselves pretty much to the bare necessities -- food, rent, utilities…the basics.

My own family is actually quite accustomed to going no-buy regularly. We have taken this savings route on a number of occasions and have found some quite beneficial aspects to the process.

Big Savings

Going no-buy on a regular basis can really have the savings adding up. While it's hard to quantify savings when no-buy starts becoming a regular way of life, compared to average families, we easily save hundreds of dollars a month on things like entertainment, clothing, meals out, travel, and other non-essential activities. Doing this several times a year, when we really limit ourselves to just the necessities, can bolster our savings and help us achieve financial goals in other areas like saving for vacation or retirement.

Determining Needs from Wants

I really like going no-buy on occasion because it teaches us "wants" from "needs". Sure, I want to go out to eat, go on little day trips, buy us special treats when we go to the zoo, and make similar frivolous decisions with my money sometimes. However, these aren't things that we need to do.

The regularly occurring necessities largely come down to things like the monthly association fee for our condo (since we don't have a mortgage), utilities, food (not including dinners out), health insurance, income taxes, and parking fees and gas for the car. Everything else is largely a want, except when we have to purchase more irregularly occurring things like clothing, or pay things like car insurance, property taxes, home insurance, and the likes.

Knowing Our Limits

In a no-buy type situation, we see just how far we can push ourselves when it comes to cutting our costs. It might not be that we have to do this on a regular basis, but it's kind of nice knowing that in a jam, we could do it if we needed to.

For example, we push ourselves pretty hard in the "food and entertainment" budget category. We tend to limit ourselves to around $300 to $400 a month in this area, which for a family of three, plus a newborn, is pretty darn good in my opinion. However, I know that we could cut this down to closer to $200 if we really, really pushed ourselves. Would I want to do this? No, because it means cutting some of our fun activities out of the equation, limiting ourselves on the types of meals we can eat, and generally living like trolls. However, in a bind, it's nice knowing that we can do it if we need to should a financial emergency arise like job loss or similar situation.

Goal Setting

If we know we want to make a larger purchase at some time in the future, it's easier to push ourselves to go no-buy for a month or two in an attempt to hit our goal quicker. Like a carrot-and-stick type lure, dangling that goal -- such as a vacation or similar treat -- in front of us acts as proper incentive to limit our spending in the near term to enjoy something special down the road. In a way, the two tend to balance each other, pushing us to be successful in our savings efforts while also forcing us to delay our gratification to enjoy something later.

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Disclaimer:

The author is not a licensed financial professional. The information provided in this article is for informational purposes only and does not constitute legal or financial advice. Any action taken by the reader due to the information provided in this article is solely at the reader's discretion.

Sources:

Conover, Raechel. MSN Money. "No-buy month saves family $450-plus". March 7, 2013. http://finances.msn.com/saving-money-ideas/3f4c6b6a-0c78-48b8-9f9f-da3ee1527feb. March 14, 2013.

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