Could You Spend Only $1000/Month?

From MSN Smart Money.

"At the beginning of February I began a frugal challenge to spend less than $1,000 for the entire month. The hope was that this challenge would give me a better sense of the value of a dollar and empathy for those who are less fortunate.

Selfishly, I craved some degree of authority about living a frugal lifestyle, because while I blog about frugality, I also spend more in a year than the average American makes.

In this post I'm going to reveal whether or not I succeeded, what my final spending totals were, and a bit of what I've learned from this adventure.

At the outset, I feared that sticking to this meager budget was impossible. I had to cut my non-housing expenses to $450 (an 82% reduction, from an average of $2,500 a month). As the days in January wound down, my anticipation and anxiety grew.

I gazed at spreadsheets, dumbfounded at how the numbers were going to come together. I knew the spending targets were theoretically achievable, but I was suspicious that I wouldn't be able to do it -- maybe $1,500 or $1,300, but there was no way that $1,000 was going to pan out.

Then it was go time, and my enthusiasm and early wins with two no-spending days gave me the reassurance I needed to know that I could succeed. It was a month of eating in (many hot dogs for dinner and peanut butter and jelly sandwiches for lunch) and lots of saying no and smart spending.

Ultimately, the challenge was just enough of a stretch. I spent $998 in the month of February. What did I get in return? A whole lot more.

One big thing I took away was a major life skill -- I learned to cook for myself. Until the challenge began, I was living a bachelor lifestyle and eating out for lunch several days a week and getting takeout most nights. I regularly spent $500 to $600 on food each month.

It wasn't necessarily because I didn't want to cook, but just inertia. I didn't know what to do with a piece of frozen chicken or have the right ingredients in the house to prepare much of anything. Guess what I spent in February on food? A total of $124.

There were other aha moments along the way. Now I get why you might shop at Dollar General instead of Costco or put just $10 in the gas tank -- because you can stretch a fixed income a lot further.

I learned the sad fact that if you really analyze your expenses, almost everything becomes discretionary if it needs to be -- like visits to the doctor, auto insurance, and even prescriptions.

I also learned that I often use money as a bargaining chip to make life easier and buy my way out of situations, and that there are often more creative solutions available.

Thanks to my friends who bought me meals against my protests, colleagues who rooted me on, and readers who offered feedback and tips along the way. Finally, it has been wonderful hearing the inspiring stories of changes each of you are making in your spending. To thank you, I am honoring the commitment I made at the beginning to donate my savings last month to charity (roughly $4,400)."

I blog about frugality too, but most of my income gets taken away from me (by choice) to avoid taxes--health care insurance, fully-funded 401k, and IRA contributions. I actually live what I write about...especially the food tips and tricks in the Food Stamp Challenge cheat sheet. It's all I can afford to spend on food until mortgage rates drop below 3%, so I can do a worthwhile refinance--my mortgage is my biggest expense, and it's lower than my rent was.

For a detailed list of the author's spending done during her challenge, please click on the link above (and you'll notice a few shockers, like $6 burritos!). Back when I could eat wheat, I think it cost me $6 for all the ingredients to make a burrito, and I usually made several (with just meat and cheese) and froze them.