February is a great month to kick off an extreme challenge, commit to quitting a bad habit, or stick with a self improvement plan. it’s great because there’s not a whole lot going on in February (besides V-day), and you only have to stick with whatever you’re doing for 28 days instead of 31!
So here’s my challenge. Since I know I’m going to throw down $175 on February 19th to register for the Chicago Marathon, I’m looking for ways to make some drastic (but temporary) cuts to my budget so my wealth accumulation doesn’t get slowed down.
What’s my typical budget.
So the fancy looking pie chart above is what my typical budget looks like. Some months I bust it, and some months I’ve got money left over, but I tend to average out to something like this. This would equate to spending about $21,000/yr which isn’t too far off my 2012 spending.
Clearly I’m saving enough money that I could afford to just drop $175 and not worry about budgeting it… I’ve certainly done it before. But why not make it into a game and see if I can make it fit in by slimming down other sections of my budget?
By practicing selectively focused frugality, it will be like the registration fee never happened. Plus, it will pretty useful to know what levers to pull when I need to reduce my monthly spending once I am financially independent.
I can’t do much about these costs.
- Housing – Since I pay a fixed amount or rent every month, there’s not a lot I can do to reduce this number. There’s always the opportunity to move to a cheaper apartment or house when my lease is up later this year, but it’s not going to help me for my February challenge.
- Utilities – This includes cable, internet, gas, and electric. My costs are reasonably fixed in the category and I can’t change them much unless I cancel cable again (but my roommate is a HUGE Blackhawks fan and I don’t want to anger her…). I only use about 170 kwh of electricity/mo, so even if I flipped the main breaker for the whole month, I’d only save about $15.
- Donations - I tend to give $5/mo to my local public radio station, and then a larger gift at the end of the year to Against Malaria. I’m not going to give up either of these contributions just to complete a challenge.
Here are the line items that are on the chopping block.
- Food – I certainly know what to cut this budget in about half by eating for a quarter the cost of McDonalds, but I’m afraid I’m looking to go on a few dates that might use most of the money in this budget, but that just goes along with being single…
- Transport – Here’s where I can make some serious cuts. I spend 40% of my annual transportation budget on gas, so if I cut my driving in half this month, I’ll be able to save$30 (50% of 40% of $150 = $30). Alright, put it on the board!
- Shopping – About 50% of my 2012 shopping budget was spent on electronics. Right here and now, I’m pledge to not purchase any electronics throughout the month of February. There’s another $75 (50% of $150)!
- Health - This $60 category is typically spent on medical co-pays, ongoing medication, and anything related to health/fitness. As long as I don’t get rather sick this February, I should be able to keep this category to around $10. So there’s another $50 to add to the Marathon fund.
- Everything else – This is a catchall category that holds the rest of my spending. Basically, anything that doesn’t fit into my other 7 carefully designed categories. I spent about $150/mo on this category in 2012, so it’s just going to take some focused frugality to make sure nothing frivolous ends up in this category during the month of February. I’ll take the last $30 from this category.
Can I do it?
Hell yes I can! Here’s what my Frugal February Challenge budget would look like.
I realize that $30 + $75 + $50 + $30 = $185 (not $175), but I bet there will be some sort of ridiculous (web-processing fee) when I sign up.
So that’s my plan. All my spending should sum up to $1,740, so that’s my goal. Sign up for the Chicago Marathon without busting my February budget of $1,740.
It’s going to require less driving, less shopping, staying healthy, and general conscious spending, but it looks attainable if I stay focused for the 28 days.
Wish me luck! Will you sign up for any Frugal February Challenges?