Whoops. Spent all my money on the holidays.

I’m almost done with my Dumb Phone Challenge and I am learning some valuable lessons. I can’t wait to share that in my update about the whole experience. This post is about my next challenge, a new way for me to reduce… my spending, that is.

The holiday season is an annual reminder of how frivolous I can be with money. I have a budget that I stick to pretty well, but then November hits and I want to shower everyone I know with gifts, visits, and homemade treats. By the time I am paying my credit card bill, I realize I’ve spent nearly double my monthly budget. I go through this every year, so why haven’t I learned my lesson yet?

I suppose I haven’t learned any life-changing lessons about spending because I have been fortunate that my over-spending every winter has not (yet) caused any true financial difficulty for me. I have always been able to bounce back and get back on track. But that might not always be the case. And if it is, that doesn’t mean I should be in any way irresponsible with my money.

In an effort to cut back, learn a little more about budgeting, and make February more interesting, I will be participating in a month-long spending challenge.

For the month of February, I will have an overall budget of $200. 

I’ve heard a lot of success stories about people who budget using cash. Some people have envelopes for each budget category, each with a set amount of money in it. Once the money runs out, you can’t spend anymore. I’m applying that concept to my money for February. I won’t have any more restrictions other than only spending the cash I have for the month. When I go to the grocery store, I’ll grab one $20 bill and make an effort not to overspend. When I go out for drinks with friends, I’ll bring $5–just enough for one drink and a tip (small town). When I want to grab lunch with a friend, I’ll have $10 with me.

All the money I'll be spending in February. In cash because I'm classy like that.
All the money I’ll be spending in February. In cash because I’m classy like that.

Before I go into more details, please don’t hate me for what you’re about to read. My graduate assistantship kindly covers my apartment, utilities, and many school expenses. I also get a meal plan, which I try to use as often as possible. So, my monthly expenses are limited. Still, I have a budget with a lot of different categories for spending.

These are the real categories for my monthly spending:

  • Monthly Bills & Student Fees
  • Monthly Subscriptions
  • Transportation (Bus, plane, gas)
  • Restaurants
  • Coffee Shops
  • Grocery Shopping
  • Downtown Fun Times
  • Household and Toiletries
  • Clothing
  • Gifts/Giving
  • Miscellaneous
  • Rainy Day: Future Car & Bike Repairs

My $200 budget for February does not include: monthly bills, monthly subscriptions, or emergencies. If I fall and break my hand, I will surely go to the hospital and pay a doctor to fix me.

I am hoping to learn a little more about cutting back, especially on some of the luxuries that I spend too much on. That would mostly include meals at restaurants, social events, and miscellaneous purchases for my house (re: anything that I find in Homegoods that has a sunflower on it).

I’ll see how February goes, and then I’ll try another budget challenge in April. That way people can stop making fun of me for choosing the shortest month of the year to do this.

This challenge is even more fun, because I will have a friend joining me! Read how my friend Lauren is going to budget in February in her post!

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