Cutting My Spending Way Down For December

The last few months have been hectic, I’ve spent a lot on traveling back and forth from NorCal to SoCal to Portland, as well as on dining out with my partner, it’s thrown me off my spending rhythm a bit.

Just like people do a cleansing diet to reset their diet, I am going to reset my spending for December and cut it down for a lean December spending plan.

Cutting Down Spending As A Personal Finance Exercise

It’s one thing to go broke and have no money to spend and another to choose to lower one’s expenses willingly. The reason to do it willingly is to exercise my financial muscles, I know what it’s like to spend lavishly but I don’t want my mind and body forgetting what it’s like to spend frugally either.

Some households are devastated when their income drops suddenly while others have contingency plans and know how to live a lean lifestyle.

My Current Spending Is Absurd

I’m a doctor, I know, it’s okay to spend, I’ve heard it a million times now. I’ve also heard that I don’t need to exercise so much or eat very healthy because I appear to be in good physical shape. There are some flawed thought processes here.

Since 2013 I have been spending on average $3,200 per month. The red line on the graph above shows how variable my spending has been from month-to-month. The blue line shows my monthly investment income.

Relationship Between QOL and Spending

It’s no secret, the majority of people in this world associate their quality of life with how much money they have to spend. Their possessions and their status compromises the rest of the QOL quotient.

Those who don’t have much money to spend feel poor and marginalized, believing that something is owed to them. It’s the reason why some poor people raid stores during riots – they feel that they have a right to the wealth that others have.

Another example is the capable person on welfare who is upset that they get so little money from the government and that their status in society is of no fault of their own.

Some doctors feel the same, that they work way too hard for way too little money. The “way too hard” is exaggerated when compared to the construction worker or the line-cook. The “way too little” is also misplaced when most doctors in the US are making over $150k per year.

I already tried this experiment of cutting back drastically on spending, I have firsthand data to prove to myself that my quality of life is inversely proportional to my spending. The more I spend the more I depend on spending to maintain my quality of living. On the flipside, the less I spend the more genuinely I experience the world, the less dependent I feel and the more liberated.

There is a very fine line of cheap and frugal, cross that towards the cheap-side and you will make yourself and others miserable.

How To Approach Spending Goals

It’s like exercising and trying to lose weight or curbing one’s eating. If you approach it with a specific number or goal in mind then it’s inevitable that at some point you will fail your metric.

Instead I need to build a framework of ideas and concepts and stick to that. When it comes to exercise I often succeed when my goal is to simply do something extraneous every single day such as:

• going for a long walk
• biking
• working out in the gym
• rock climbing
• doing push ups and dips at home

If I plan on spending only $1k or $1.5k next month I might succeed but it won’t be a viable long-term plan. The outcome will be this feeling like I had to give up a lot – not a good feeling.

Instead, I am going to use the following concepts when it comes to spending:

1. Spend on what I need.
2. Don’t spend out of laziness or impulse.
3. Fill my days with positive activities.
4. Plan my days so that I know when a spending event might arise.
5. Keep my goal of financial independence in mind.

Being Frugal Doesn’t Mean I need To Suffer

When a person exercises regularly, lifts weights, participates in sports and avoids being sedentary then they are doing something good for their mental and physical health. 

Are they torturing themselves? Are they depriving themselves? Well, being active isn’t always easy. At times it can feel much nicer to lounge in front of the TV or to go sit down for a large pizza.

But we do certain things because we know that immediately after the exercise we feel like we did the right thing. And in the long-run our bodies will be better off.

The same is true when it comes to spending. I can either spend according to my momentary mood or I can make a decision that is more in-line with my long-term plans. I have done far too much of the former and so I am leaning towards the latter.

My Spending Categories And My Weaknesses

My necessary spending categories:

• housing (taxes, HOA, repairs)
• groceries
• utilities (internet, electricity)
• financial adviser fees
• transportation (bike maintenance, public transport)
• clothing
• health/exercise (gym

My elective spending categories:

• Dining out
• Drinks with friends
• Binge eating
• Impulsive merchandise purchases
• Uber/Lyft

As I mentioned before, if I spent on the elective items above and felt good about it later and thought that it was worthwhile then I would have no reason to want to stop doing so.

Join Me For The Month Of December

A few of my friends will join me on this December spending plan.

The point isn’t to spend as little as possible. Spend on what’s important to you while keeping your overall financial goals in mind.

For many it’s a matter of keeping track of individual expenses, something many of us haven’t done in a long time – or ever.

Then just being aware of whether this expense is necessary or elective.

Maybe you’ll save a ton and maybe you’ll just cut that one extra pastry at the cafe.

Break December up into the 5 separate weeks and record your spending and progress for each week:
12.1-12.4 (Thu-Sun)
12.5-12.11 (Mon-Sun)
12.12-12.18 (Mon-Sun)
12.19-12.25 (Mon-Sun)
12.26-12.31 (Mon-Sat)

Post your progress in the comments section, I’ll do the same. If nothing else it will be a good exercise in tracking expenses and becoming more aware of where our money goes. At the end of the month you can figure out how much money you would need invested to generate that kind of expense without you having to work for it.