If you’re anything like the rest of the world, you’ve probably already found yourself wavering on your New Year’s Resolutions. Sticking to the habits that help us reach our long-term goals proves extremely challenging once the momentum of a new year has worn off. So when it comes to saving money to be invested in your future, we often find that participating in mini savings challenges can help.
That’s why, along with our partners at Wealthsimple — simple, affordable investing for anyone — we’ve asked four different influencers to participate in a “no-spend challenge” this spring. Today, we’re checking in with Alyssa from Mixed Up Money. Alyssa challenged herself to spend $0 on anything non-essential for the month of March, with the goal of using what she saved to be invested for her future goals. Shortly after she started, the COVID-19 pandemic started heavily impacting our daily lives and itself presented new incentives to spend less. Here’s what Alyssa had to say.
TFD: How successful were you at completing the challenge?
Alyssa: In a month with 31 days (a lot of days), I feel like I was extremely successful. I only slipped up three days of the month, and for the most part, those were unavoidable expenses or necessary purchases to keep me on track. It’s not easy to completely cut out some of your non-essential spending when you need a mental break or want to help others do the same.
Did you have any hiccups during the challenge?
I had three days where I spent unplanned money on things that weren’t considered to be essential expenses. The first hiccup was forgetting to bring my daughter’s dinner with us on a night out (even though I had packed one). This was a good reminder of how mistakes can happen and spending is sometimes unavoidable. The second hiccup was a last-minute dinner out with my girlfriends to catch up before everything closed down in my city due to the pandemic. Lastly, the third hiccup was me sending a quarantine care package to my best friend who had to celebrate her 30th birthday in isolation. It felt like a need at the time.
How much money do you estimate you saved (e.g. how much do you usually spend on going out to eat vs. how much you spent during your challenge) that you can now use to put in investments?
The savings were insane! I had an additional $600 leftover in my checking account to put towards my retirement fund. That goes to show how much I spend on non-essentials each month that I can easily reduce.
What spending did you miss the most?
My most-missed spending wasn’t a surprise at all – Starbucks coffee. I typically go to Starbucks about two to three times each week to enjoy a latte and get out of my house to do some writing because I work from home. It felt weird to not have the option to escape when I felt writers’ block creep in. But, about halfway through the journey, it wasn’t even my choice, so, I guess you could say I was preparing for the change before it became necessary.
Was there any spending you were surprised you didn’t miss? If so, what was it?
One thing I really missed was the ability to spend money impulsively. You sometimes forget how often your spending habits are unplanned and unannounced. I had to turn down some last-minute invites to events or avoid a clothing sale for summer clothes for my daughter because it wasn’t considered essential spending.
Would you ever complete a no-spend challenge again?
Absolutely! Probably not for an entire month, though. I love the idea of splitting up weeks into no-spend and free-spend. This would likely control how often we order take out and also how frequently I go to coffee shops – which would alone, save me close to $300 per month that I could put towards my investments.
What helps motivate you to invest/save for their future when you’re tempted to spend on things in the present?
For me, it’s all about having security for my family. I have my daughters’ RESP (future college fund) in Wealthsimple, and any extra cash we have tends to go towards that account. It’s important to me and my husband that she has the opportunity to do whatever she wants to do after high school. Nothing motivates me more than having that buffer of cash for our future grow little by little each year.
What do you hope to use your investments for eventually (i.e. what kind of retirement you’d envision, or if you have shorter-term investment plans)?
Some of my investments are for my daughter, but most of my investments are just for retirement. I know that the power of amortization is so important, and the longer my money sits in those accounts the better. I have no plans to touch that money until I feel like we have enough to enjoy a retirement that still allows us to travel and enjoy our livelihood with friends and family.
We often hear from our audience that they feel like they don’t have enough to invest in even a basic retirement fund, so a no-spend challenge is a great way to find where you might be able to save more than you think. And with a company like Wealthsimple, you can start investing today, no matter how much you’re starting with. Click here to learn more, and get your first $10,000 managed for free.
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