The Five Dollar Days of January - Chronicles of a Budget

Day One, January 1, 2010

A new year. A new decade. A new budget.

My partner and I use January as a time of reflection and a time to pull in those financial boot straps after a month of holiday parties, hostess gifts, gifting, and dinners out. With credit card bills coming in and tax season drawing near, my partner and I take the month to hyper monitor spending and recreate lent for the marginally religious. We call it the Five Dollar Days of January.

The practice started about eight years ago when a dear friend of ours invented this idea. The rules are fairly simple, or at least they used to be fairly simple, and we have amended those rules since. We get to spend up to $5.00 per day from January 1 through January 31. Therefore, rather than having ungodly credit card bills on top of the Christmas bills, we’ve only spent $150 each for the month, and we (ostensibly) have more money to pay off bills than continue to let statements drag for months with their maniacal interest rates festering like abscesses on our checking accounts.

Today, I took inventory of the pantry, fridge, both freezers, and the baking cabinet. With lots to work with as the month unfolds, I foresaw a good emptying of the vessel coming our way. Then, I realized we had almost no milk. As it was the first day, I hit the Internet to find the cheapest gallon of skim to keep the budget nice and tight. The best value would be at Newflower Market: 2.29 a gallon. Ironically, I received the Review of the Day on www.yelp.com for my review of this very store. I wondered if I were to print out my review and the Review of the Day and show it to the store manager, would he give me my milk for free? It was worth a try.

As I started the car, a sudden concern overwhelmed me. If I bought this milk, I was technically spending unnecessary money on gas, since I would make one special trip for the milk. Then a miracle occured. I recalled that I bought about $100 worth of iTunes gift cards at CVS for my nieces and nephews for Christmas, which garnered me a $20 coupon for my next purchase. I headed over to the CVS, since they sell milk, and I asked the cashier if I was correct.

“Does this coupon actually mean that I have $20 of free slot play at the CVS?”

Mission confirmed, I picked up the milk and the vitamins I was going to do without once my correct supply ran out. I was really ahead of the game. Upon check out, the cashier informed me that I have to spend the whole $20 in order for the coupon to work, and I was at about $17. A couple of boxes of Kleenex brought me to $19.90. I explained that there was nothing else I need, so he sold me a caramel for a dime. My total, with tax came to $20.25. I happened to have a quarter in my pocket, so I handed over the silver beast, grabbed my three bags of groceries, and I returned home, successfully staying within budget for the day.

Five Dollar January days provides some unique opportunities. I always use up the gift cards I’ve acquired throughout the year, particularly from the Christmas holidays. Because I focused on the budget so much when planning the milk run, I remembered the CVS coupon, which would have expired the next day had I not used it. When I arrived home to put the groceries away, I found my receipt. Apparently the vitamin purchase gave me an additional $3.00 coupon that I can use before the month is out. Hello next gallon of milk!

When our friend Gaelen invented the Five Dollar Days of January, she considered some important rules and regulations. Philosophically, the practice is to have a Lenten effect where you take stock of what you do have by not buying unnecessary items. You spend less time going out, more time cozied up with your loved ones, pay more attention to your home, your relationship, your quiet time. For us, it has worked very well in this regard. We do spend more time cooking dinners together, walking the dogs instead of heading to happy hour, going to the gym instead of to dinner, and talking instead of spending.

Pragmatically, the system works like this: You get $5 per day, which you can stockpile for any number of days and go to the movies on a Saturday night if you like. The tight budget is restricted to your disposable income buys. We do not include the mortgage or car payments, utilities, gas for essentials such as going to work or errand running, and medical needs, but we do count the costs against groceries. Some other friends who have tried the project do not count groceries, but we are not raising kids, so we add groceries. We prefer to do so because January is a great chance to eat from the freezer, do some baking instead of buying, get creative with certain ingredients we have acquired (Why do we have three boxes of tapioca?).

As January 1 came to a close, I prepared a stock pot full of black eyed pea stew, which some friends were coming by to help eat and ring in the New Year. I was supposed to meet them to walk the mall for a few hours during the afternoon, but I cancelled, partly because I did not want the temptation of a fortieth pair of shoes or a twentieth pair of cufflinks. Also, I was not feeling my best. Still shaking a cold from earlier in the week and a little limpy due to a strange pimple on the back of my calf, I decided to cancel the plans and wait until they come by the house at dinner time. One of the friends, Kevin, is a nurse, and after I tell him about the cold, the strange pimple, the low grade fever from this morning, he encouraged me to go to the ER to see if a staph infection developed. After they departed (leaving an extra pound of field greens in the fridge (Hello savings!)), Jeff and I headed over to the hospital. Staph was definitely the issue (The Triad Nurse logged it as "staff infection," which sounds like a job hazzard), so we had a little gross procedure done, filled a prescription for the requisite anti-biotic, which costed us $112.83. This expense, as great as it seems, did not count against our $5 budget, since it was medical. Additionally, the flex spending will reimburse us the cost of the bills, so we really are not spending anything. Jeff spent most of the day at work, so he had no reason to spend any money. Technically, we have only spent a quarter today.

To make the practice easier to understand, I provided a table of typical expenses we incur during any given month. You can decide for yourself if you can pull in your spending and meet these restrictions.

Exceptions to the $5 Rule
Mortgage
Utility, Cell Phone Bills
Car Payments
Medical Needs
Gym Membership
Home Cleaning Service
Landscape Service
Gas for Essentials
Dry Cleaning
Boat Maintenance and Storage
Car Repair and Maintenance
Pet Food and Medical
Anything you Buy with a Gift Card (that was a gift)

Restrictions
Dining Out
Entertainment (movies, theatre, happy hour)
Groceries
Gas for Unnecessary Trips
Car Washes
Shopping without Using Gift Cards
Downloads or Online Shopping
Starbucks

Most people would probably look at these lists and think they could easily manage not purchasing most of the items on the latter list for at least a month. “Oh yeah, I can do without Starbucks for a month” until you realize you are enjoying a walk with a friend who decides you both need grande lattes at $4 each, money that comes right off the top of the essentials, like groceries.