A budget game plan: Mother of five pledges to freeze all of her non-essential spending for January

Rachael Bozarth is taking some drastic measures to attack her debt.

The 32-year old mother of five has pledged to freeze all of her non-essential spending for the month of January.

“I need to retrain myself to realize that not everything is a need,” said Bozarth, who lives in Olathe, Kansas.

She and her husband have just over $50,000 in total debt, which includes student loans, medical bills, credit cards and a car payment. She’s currently not working and her husband owns a landscaping company.

Bozarth admits she has never been good at sticking with a budget. She and her husband pay bills as they come in and buy stuff when they want. That includes grabbing take-out, buying fountain drinks at the gas station and making purchases on Amazon nearly every day.

“Those expenses add up quickly, and before you know it, you have spent hundreds [maybe thousands] of dollars on things that weren’t necessary,” she wrote to CNBC in an email.

She didn’t want to do it alone, so she started a Facebook group, which has grown to almost 600 members. Bozarth recently admitted to the group that she realized she and her husband could have paid off half of their debt last year had they spent their money better.

“Talk about a punch in the gut,” she wrote.

The idea is to become more conscious of her spending and more financially responsible, even after the month has passed. Bozarth plans to start an emergency savings fund and start paying off her debt. Her goal is to have an emergency fund in a month or two and pay off debt within three years.

The big issue with such a strict spending diet is sticking to it. Only having the goal of one month makes it more likely to be a success, experts said.

“When people say, ‘This year I’m going to save all this money or lose all this weight,’ there is no defined period of time,” said Winnie Sun, co-founder and managing director of Sun Group Wealth Partners in Irvine, California.

“It makes it harder to reach your goals,” she added. “The one month goal is ideal, especially for those who have that pattern of debt.”

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Someone can also walk away from their one-month spending freeze realizing what they can do without long-term, noted certified financial therapist and certified financial planner Rick Kahler, founder of Kahler Financial Group in Rapid City, South Dakota.

Some people may not do well with quitting cold-turkey. If they fail, they may still glean some information about what worked for them, and what didn’t.

However, even if they make it through, there is about an 80% chance it will not be a long-term fix, he said.

“Most spending issues are not about the money,” Kahler added. “They are about the behaviors, the thoughts, feelings and beliefs that drive the behavior.”

You may have more success reining in your spending by not being so drastic, Sun and Kahler believe. For instance, for one week, you can cut out all of your Amazon spending, the next week you can forgo take-out orders, and so on.

Another option is to ease up on spending for your wants, but not fully freezing it. You can set a budget for your Target or Amazon purchases, or cut back your daily Starbucks to every other day.

“Do some modification, where you start with limiting but not eliminating and see how it goes,” Kahler said.

It’s also important for people to give themselves some grace right now, given the toll the pandemic has taken on their lives, said Sun, a member of the CNBC Financial Advisor Council.

“In order to be successful financially, it has to fit in with your lifestyle; what makes sense for you financially, mentally, physically,” she said.

“If you feel like you have to give up too much, it is not sustainable.”

It may help to make a list of the reasons why you should stop spending so much and why you should not, Kahler recommends.

“They are both equally important,” he said.

Listen to those reasons with compassion.

“Usually, you are going to hear some very interesting things,” he said. “Then with the information, a person might be able to work out a compromise.”

That means perhaps figuring out how you may satisfy a need without spending as much money. For instance, if you love to read but have to cut back on buying books, perhaps get a library card, he explained. If you love buying coffee every day, invest in a good coffee maker or espresso machine for home.

“If you try to white knuckle it, try to strong arm that part of you that wants to spend, shop, whatever, it probably isn’t going to go well,” Kahler said.

Whatever your reason for wanting to cut spending, have a plan.

If you don’t have an emergency fund, that should be your first priority, Sun said. Then, start paying down your debt.

Look back at what you’ve spent in the last three months to see where you can make changes. Instead of thinking big, perhaps look at what you can cut back each day. For instance, if you want to try to save $1,500 a month, break it down into $50 a day, she suggests.

“You should celebrate every single week while you are going through this process,” Sun said.

“Then have a plan in place if you fail or hiccup any given week. What can you do to pick yourself back up?”

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