I’m excited to share an interview with Shawn Richard from The Smart Fi today! Shawn is a friend of mine, and I’ve enjoyed reading his financial savvy, particularly when it comes to the area of saving money. One concept he talks about at length at his site are “No Spend Days.” If your budget could use a jump start, I hope you’ll draw some inspiration from his interview.
First, tell me a bit about your blog. Why did you start it, and what is the primary message you’re hoping to share with readers?
The Smart Fi blog was born from an idea to share my family’s journey to Financial Independence (Fi) and break free from the rat race. Part diary, part how-to posts, my writing is geared toward the novice investor who is looking to pay off debt and begin to build wealth.
From a very young age, personal finance has always intrigued me. I remember opening my first Roth IRA and being fascinated by the account statements showing I had made money without actually doing work. From that day forward, I realized my money could work just as hard as I do. It wasn’t until the catchy term FIRE (financial independence retire early) was coined that I really focused in on the purpose of our journey, make work optional.
What do I mean by make work optional? The typical American family spends everything they earn. But what if you lived off of half of your income? By living off half of your income, each month you work you are “buying” a month of your freedom. In essence, the half of the monthly income you save can be used at a later date to fund a month of not working.
Instead of working until age 65 like mainstream America, you could afford to take a lower paying job that you love at age 50. Or even retire early and volunteer for your favorite charity. Creating a financial cushion in your life buys your freedom.
Happiness does not come from a perfect house, like you see on HGTV and a shiny Mercedes in the driveway. Happiness comes from the freedom to design the life that you want to live.
One of the topics I’ve seen you talk about before on your site are “no spend” days. Can you briefly describe what a “no spend” day or period of days is?
No-spend days are one of my favorite savings hack. If you follow any “debt free” social media accounts (there are thousands on Instagram) you will see the definition behind a no-spend day varies widely. There are no-spend days, no-spend months, and even no-spend years.
My favorite way to utilize no-spend days is to dedicate a month where I designate a certain number of days as no-spend days. As an example, my wife and I have decided that in May, we are trying to hit 10 no-spend days.
If you are interested in more information about no-spend days, you can read my entire article I wrote on the subject recently, No Spend Days Done Two Ways.
What qualifies as a no-spend day? I like to employ a very strict set of rules for my no-spend days. Quite simply, if I spend any money on a given day, it is disqualified as a no-spend day. Gas, for the car – disqualified, a gallon of milk from the corner store – disqualified. So you can imagine, it is difficult to get to a place where you can string together 10 of these kind of days together in a month.
What is the end goal of a “no spend” day for your family? Is it to pay down debt, increase savings, or something more?
The end goal of a no-spend day is to get you to think differently about your money. Mindless spending is a cash flow killer. By that I mean, most middle class families have some “fluff” in their budget. In our case, we were trying to get to a place where we could harness that “fluff” from our budget while not degrading our quality of life. In the end, we have no problem spending money on items or experiences that bring us joy. It was the meaningless purchases we were trying to eradicate.
“The Latte Factor” was a phrase coined by David Bach years ago. He even turned the idea into a book. The premise of the book is that mindless daily spending can add up to hundreds of dollars per month. If that money were used to build your personal wealth instead, you could have saved hundreds of thousands of dollars over your lifetime. You could literally change the trajectory of your financial life by cutting out expenses that don’t bring you joy.
One of our family’s major financial milestones is to pay off our mortgage. This is the last hurdle to becoming totally debt free. The money we save from our May no-spend days will be earmarked for paying extra principal on our mortgage payment. It is a guaranteed way to get 3.375% return on our money. Much better than any savings account currently offered by banks.
What kinds of benefits have you seen from “no spend” days? Any cool stories to share of what you’ve been able to achieve?
We live dangerously close to a grocery store. You can literally see the store from our driveway. This has built a safety net into our lives that while convenient, can really put a dent in our grocery budget. Because when we run out of milk, we walk to the store and instead of just buying milk, we walk out with $30 worth of other stuff we didn’t need. This kind of mindless spending costs us hundreds of dollars per month.
These type of savings hacks can be stacked for even more savings. Several months ago, in January, we were able to piggyback 10 no-spend days with a $200 per week grocery budget. We used this one-two punch to help pay for the expense of replacing two iphones that were showing their age. Like most families, our biggest expenses are: shelter, food, and transportation. For most people, the mortgage is a fixed expense, but food and transportation are fair game. By attacking one of your largest budget items (food), you can slash serious money from monthly expenses.
Do you have to plan ahead for a day like this? If so, what are some things you might consider?
No-spend days force us to plan, something my wife and I are not particularly good with. I have noticed with our no-spend challenges that by alternating our spend and no-spend days we can cut many of our last minute trips to the grocery store. During no-spend challenges we are better about meal planning and grocery shopping, because we have to be. By surfing our pantry and substituting ingredients, much of our no-spend challenge savings come from our food budget.
What are the biggest spending temptations that you feel come up during a “no spend” day?
The biggest challenge during a no spend challenge is staying away from coffee shops and avoiding the impulse to go buy same-day food for dinner. Keep in mind we usually designate 10 days of a month as no-spend days, leaving 20 days for those trip to Starbucks.
We reserve the right to change our mind on a particular no-spend day. If for some reason we feel the urge to spend money, say for a spur of the moment lunch date, we can designate a different day as a no spend day. However if you do this too many days, the back end of the month can become very difficult.
How do you handle spending temptations, even small ones, as they arise?
The times we tend to struggle with no-spend success, is on weekends when our children are not in school and also when my wife and I have days off together. These are a couple activities my wife and I have found to keep us from spending.
- Go for a run together. We love our days off and we love running so this is a perfect fit for us. We drink homemade coffee in the morning and spend midday running through the beautiful forests of the Pacific Northwest.
- Clean the house. No seriously, when we are busy cleaning we don’t have time to go spend money.
- Go to the library. Public libraries are utopia to someone on a budget. We have a library within walking distance of our house. They have a huge wall of magazines and of course free books.
- Netflix. We love to shower after our runs, grab a quick snack from the pantry and watch a Netflix show or movie before our two boys get out of school. This is a favorite low-cost activity in the winter months.
- Go to work. I’m not kidding. When you are working, you are not spending money. Whether it is a side hustle or extra shifts at your day job, increasing your income is a great way to put distance between your spending and savings. With the extra income you can pay down debt or contribute extra to a 401k or Roth IRA.
If you are interested in seeing how I find happiness while saving money, you can follow me on Instagram where I post my daily antics.
Do you have any advice or tips for readers who might want to try a “no spend” day with their family?
As you can see, you can make the rules what you want them to be. Like most things in life, I would say start small. Try setting a goal for 5 no-spend days in a month and redirect that money to a better purpose such as consumer debt, saving for retirement, or saving for college. It can be difficult to quantify how much money you have actually saved in a month, but if you get your no-spend days up to the double digits, you will surely be saving money. Or better yet pair your no-spend days with a month of no eating out, or a month of no coffee shops. These types of mental savings games can really move your net worth in the right direction.
If you haven’t noticed, I love to turn our family finances into a game. The goal is always to spend less, save more and invest the difference. The finish line is financial freedom, not owing money to any bank or person.
Imagine what your monthly expenses would look like if you could eliminate your mortgage, two car payments, and your consumer debt. That could shave nearly 3 to 4 thousand dollars from your monthly expenses. You would have the ability to live the life you desire, unencumbered by debts. That is the freedom I desire.
When I am not writing, I am a Registered Nurse, husband and father of two boys. I am on a journey to reach financial freedom by saving 50% of our income and paying off our mortgage 15 years early.
You can also reach Shawn at [email protected]
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