My family and I are about to embark on the No Spend Challenge for 2014. We will limit our spending to the essentials only, for an entire year. We are not the first to take on a challenge like this, but it is still a daunting idea for us. We are not taking it lightly. Preparations have been underway since I first started contemplating the idea about a year and a half ago.

We have considered the logistics of living life without spending money. We have discussed the challenge (and the changes it will require) with our kids to ensure we’re all on the same page. We have created a plan to keep important family traditions in no-cost ways. Finally, we have outlined a set of rules to guide our journey, beginning with our definition of “essential expenses.”

Essentials

Food and shelter top our list of essential expenses so we will be visiting the grocery store and paying the mortgage during our No Spend year. Along with shelter comes the necessity of heat in the house and water and lights, so the gas company, the electric company, and the water/sewer bills will get paid too. And in the interest of keeping our creditors happy, we will continue making monthly payments on the debts we owe.

Still, there are things we can do to minimize our costs in these areas. First, we will reduce the food budget by eliminating sugary foods from our list (no store bought cookies, cake, ice cream, etc.). Second, we are not allowed to go to the store without a grocery list so we can keep our menu (and budget) on track. Third, we can minimize our utility costs by using fewer lights, unplugging appliances when they aren’t in use, limiting the number of playtime baths (we have a monster-sized tub that our kids like to “swim” in), and keeping the thermostat at a reasonable temperature. While I can’t pretend we will be “suffering” with these changes, I do think they will require a shift in our thinking to become more aware of our habits and lower costs.

Clothing is debatable as an essential expense since both my husband and I have plenty of clothes to last through the year. However, our children are still growing and a year without buying clothes for them could cause problems. I sincerely hope that my husband and I do not “grow” out of our clothes, but since our children inevitably will, we have allotted $100 per child for clothing (including shoes).

Finally, we have a few essential non-essentials on our approved expense list.

Approved Expenses

Education is important to us and something we decided we can’t do without, especially since we homeschool. Educational expenses like workbooks and classes are essential to our family. We will do our best to keep costs low by utilizing free resources when possible.

While some medical expenses can be postponed, others cannot. Staying healthy is important to us so we will evaluate medical expenses as they arise throughout the year, but in general, they are approved expenses. This includes regular care, preventative measures, and any emergencies we might encounter.

Internet access is another item we must have. I work completely online so this is a necessity. Plus, we manage bills and bank accounts online as well. So our high speed Internet stays.

The two items we debated on and decided to keep are 1) Netflix streaming, and 2) gym membership. We pay $8 a month for the basic Netflix service, and it is a mainstay in our house. While we could probably learn to live without it, there are other people in the house that use it too. The gym membership is another expense we could live without. However, it made our approved list because we enjoy going as a family and health/fitness are important to us. These two items could be reviewed later and canceled, but for now, we are keeping them.

Lastly, in the interest of full disclosure, we have a trip planned in June to celebrate my in-laws’ 50th wedding anniversary. Since this trip can’t be rescheduled and its important to us to be with family in Minnesota to celebrate, we have set aside money to cover the cost of the trip. While we plan to minimize costs as we travel by packing food and staying with friends and family instead of hotels, we know we can’t do it for free.

This is it – the list of essentials and approved expenses for our No Spend year. We have tried to think of everything, but in case we missed something, we will assess needs and costs when we come to them. Our plan for evaluating unforseen expenses will be covered in Part 2 of the rules.

© Alyse Scicluna Lehrke. All rights reserved.  Image credit: gerard79 at sxc.hu