Money can be a great thing to have, and a terrible thing to be without. I’ve known people who are great at managing it even when barely making ends meet, and people who struggle financially even though they’re making six figures. Today’s post about having an austerity month is definitely more for the latter group–so if you’re struggling just to pay the bills, take a breath, and just take whatever you can out of this.

There have been multiple articles on how money doesn’t really buy happiness, at least once you get past a certain point. A 2010 article from Time indicated that your day-to-day happiness doesn’t increase once you make more than $75,000. A more recent article from Money magazine (which references the previous one) looked internationally, and found that it took up to $95,000 for those of us in North America to be happy, or $105,000 if you include long-term goals and other metrics.

Getting Personal

For us, the idea that we’re able to go out and buy a superyacht or a mansion to live in is ridiculous. Our bank accounts are far below that threshold. We are at a place, however, where we can fulfill our needs and quite a few of our wants. The trick is in those “wants”, though–it’s very easy to spend a lot of money on new toys (my weak spot), caffeine-based drinks (the wife’s), or myriad other things that you believe will bring more happiness into your life but really don’t.

Keeping those wants in check takes effort. It takes you being willing to slap yourself on the hand now and say “No”, so that you can have money for better things later. Those better things might be retirement (401k, Roth IRA), education (529 plans or ESAs), or so that you can go on a once-in-a-lifetime vacation. It’s better to take that slap now than to kill your dreams one fancy coffee at a time.

We’ve found that the best way to give ourselves that “No” that keeps us in check is to have an austerity month* every year.

How Our Austerity Month Works

OK, one moment of the dictionary here: Merriam-Webster has multiple definitions for “austerity”, but the one we’re talking about here is “enforced or extreme economy”, and more the “enforced” part. Our way of enforcing economy during the austerity month looks like this:

1. The duration is one month; it doesn’t matter which one.
2. There is no extraneous spending during this time. Things like education, replacing worn-out clothes, car repairs, etc. are fine as they are necessary items. Items like new kitchen tools, books, and the like have to wait.
3. The only exception to #2 is for the my and the wife’s fun budgets, which are a fixed amount each month we get to spend on whatever we want.

Both in 2018 and 2019, we worked together to keep each other accountable on the purchases during that month timeframe. If you do something like this for yourself and you aren’t married, you must have someone you trust hold you accountable for your purchasing choices during the month. They’re your conscience, your guide, to ensure that you stick to the plan even when you want that shiny something.

What It Looked Like in 2019

When we did this in 2018, we chose February as our austerity month. Why? Well, because it’s the shortest month to do this in. It both sounds and is funny to go by that, but it worked. This year, Mary Grace wanted to do it in January. One of the primary reasons for that was our spending rose in December for Christmas, and minimal spending in January would be a good counterbalance.

Now, I want to highlight a point from the above paragraph: The wife, who is the spender in our relationship, pushed for doing the austerity month right away. Having her being a driving force behind it this year played a crucial role in whether or not the month would be successful.

So did it go well this year? Particularly with the wife’s push for “enforced economy”, it went amazing. There were still plenty of moments where we said, “Well, if we just spend a little here…” or “Wow I could spend some money and get this”. But we didn’t act on those. This being our second year doing it helped keep those urges in check, as did our holding each other accountable. We had an idea what we wanted to have saved as a result of not spending, and we ended up saving almost three times that number. Hooray for the slap on the wrist and the word “No”!

Looking Back at One Quick Month

The most incredible thing with the amount we saved, at least for my analytical mind, is that if we kept this approach up for four months we would have accumulated a year’s worth of savings in that time. Eight months ahead of schedule. Wow.

Should we have kept it up for four months to achieve such a remarkable goal, though? No, I don’t think so. Part of the point of the austerity month is to help you understand that there are a lot of things you don’t need. That mindset, particularly from this year, helps to give a mental check before you spend money the rest of the year. We, at least, naturally drive more towards savings as a result of that one month of effort, even with more room in the budget.

Mary Grace and I have talked about doing another austerity month during the year, just to ensure we have two checkpoints for our spending versus saving, and two points where we can maximize that savings amount. This may or may not happen, but if it does, I’ll do another post about what that looked like.

Getting Personal Part 2, and Summary

One thing that some people might wonder about is, Does doing something like this feel like suffering? For the wife and I, I can say no. Both of us grew up in an environment where, while we were always taken care of, our families weren’t rich. While my Mom made sure we always had good food on the table and got to school safely, we had far too little income to have any “extras”. Having so little and still having a good family, and finding joy in life, had already shown me that a lack of money doesn’t create suffering on its own. Instead, it pointed out that, once you get past the basics, all those other things you might purchase are really nice-to-haves.

For those who are in a place where you are struggling even though you should be succeeding with money, I’d highly suggest doing an austerity month. Again, have either a spouse or someone trustworthy to keep you and your budget accountable. Not only will it provide you perspective on where you’re spending money, it will help you communicate more clearly about it. If it doesn’t go well the first time, try again the next year (or the next month, if you’re really courageous).

If you’ve already tried this, go ahead and provide comments on your successes and failures. Or, if you’ve found something else that worked for you, feel free to share that too–we can all learn from each other!

Have a great week!

* NOTE: We’re definitely not the first to go down the road of an austerity month. If you search the internet for the more-used and less-engineer-nerdy term “No Spend Month”, you’ll find lots of great stories and experiences.