Feeling overwhelmed by the sheer amount of stuff at the mall or in your closet? Ever felt like you just can’t save any money, no matter how much you try? A low buy year is one of the top money saving techniques that can help you kick poor spending habits, reduce stress and decision fatigue and help you save for the future.
Read on to learn about how to do a low buy year.
What is a Low Buy Year?
A low buy year is precisely that – buying a low amount of stuff over the course of one year. You’ll focus on drastically reducing expenses on essential items such as:
- Clothing, shoes and accessories
- Takeout
- Subscriptions
- Personal care (salon, massage treatments and more)
- Vacation savings
Let’s get into the details surrounding the benefits of a no buy year and how to go about participating in the challenge.
Benefits of a Low Buy Year
Save Money
The primary reason you should participate in a low buy year is to save money! Small purchases you might think don’t mean much to your finances can really add up. While a low buy year doesn’t mean you won’t spend any money on fun or discretionary purchases, it does mean you’ll significantly cut down on expenses.
Reduce Stress and Decision Fatigue
Think about the last time you went to a shopping centre or mall. How did you feel? If you’re like me, you may have felt a bit distracted or overwhelmed by the sheer amount of choices available to you. Hundreds of t-shirts, jeans, pants, knick-knacks and more await you. A low spend month will drastically reduce how much you’re allowed to spend on non-essential items. When you aren’t allowed to spend money on stuff you don’t need, you’ll be able to quickly pass by shops knowing any items there are out of your budget. If you spend less time in the mall or in shops, you’ll be a lot less likely to feel overwhelmed!
Strengthen Relationships with Loved Ones
If you’re like millions of other people, you share your finances with a partner and are financially responsible for many bills and maybe even children. Finances and spending money in general is a huge source of potential conflict between couples. When you participate in a low buy year, you’ll have less to argue about. Why? You won’t be constantly arguing about why you need that second TV or third pair of red heels. While conflicts cannot be entirely eliminated through reducing spending, a low buy year can really help you reduce conflicts regarding money.
Reduce Environmental Waste
While not the first reason you might think of, a low buy year will help you do your part in reducing plastic waste. When you buy less stuff, you’ll acquire less plastic and other disposable packaging. Even one year spent buying less stuff can translate to tons of plastic waste not ending up in landfills. While it isn’t entirely your or my responsibility to bear the brunt of environmental responsibility (corporations and governments play a huge role in this), we can all do our part. A low buy year is an easy way to do this!
Focus on Life’s Simple Pleasures
Getting trapped in the cycle of consumerism can often mean you spend more time on what you want and need instead of what you already own. When you learn how to live with less money, you’ll have more time to focus your attention on low-cost or free activities.
When you have less money to spend on entertainment and other discretionary purchases, you’ll need to find other sources of entertainment to keep you occupied. One simple way to do this? Focus on simple pleasures. For example, instead of spending money on a concert or movie tickets, do a family game night. You’ll appreciate the time spent catching up with family all while spending little to no money – maybe a few dollars for snacks, but that’s about it! Think about one or two free or low-cost activities in your life you can replace your costly habits with. Living on less takes practice, but it’s worth it.
Starting a Low Buy Year
Step 1: Know Your Reason for Doing a Low Buy Year
Now that you’ve decided to do a low buy year, you’ll need to commit to the challenge and stick with it. Think about your reason as to why you want to participate in a low buy year. Write down your thoughts in a journal. Your notes should include details on the following:
3 Pillars for Participating in a Low Buy Year
- Your reason for participating in this challenge – for example, saving money, appreciating life’s simple pleasures and reducing conflicts with loved ones.
- A specific goal you want to save up for – while the main reasons for participating in a low buy year aren’t just monetary, you should choose something to save up for to stay motivated! Even if it’s a new item of clothing or a weekend getaway, a goal will help you stay on track.
- Your overall savings goal during the low buy year – not sure what amount you should choose? Take the amount you spent on non-essentials over the last 3 months and find the average. For example, if you spent $400 in September, $300 in October and $600 in November, the average you spent over the last 3 months is $433 per month. For a low buy year, decide how much you want to reduce your spending by. A great goal for a low buy year or low buy month is 70%. This figure allows you to save a lot without completely cutting out spending. Therefore, you’ll want to reduce your spending by $433 x 0.7 = $303.10. Overall, your monthly savings goal should be around $300 and your spending will be around $130 during the low spend year.
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Step 2: Determine Your Low Buy Year Rules
Now that you’ve determined how much you’re allowed to spend per month on non-essential purchases, you’ll need to set low buy year rules – specifically, rules on how much you’re allowed to spend on each category. Since you’re reduced your spending by 70% or so, you’ll need to be careful about how you spend your money. First, take an inventory of all non-essential spending categories in your current monthly budget. Here is an example list:
- Takeout
- Takeout coffee, tea
- Plants
- Non-essential clothing
- Vacation Savings
- Subscriptions
- Alcohol
- Extra-curricular activities, gym memberships etc.
To keep it simple, reduce your spending in each category by the exact same amount you’ve reduced your overall spending on non-essential purchases. For example, if you previously spent around $200 per month on takeout, your new total you’re allowed to spend is 70% less. $200 x 0.3 = $60. Take a calculator, calculate how much you spent on each category previously and determine the new amount. Don’t worry about being 100% accurate. An estimate is fine, so long as you know how to spend money on each category while staying within your budget.
Step 3: Track Your Spending in a Journal
Time to get started on your low buy year! Begin by noting which day you started. You can start in January alongside the new year, but why not start now? Just be sure you’re ready and have completed the previous steps first.
Every time you make a purchase, log the following details:
- The date
- The item you purchased and its category
- How much you spent on it
When you track your spending, you’ll be able to calculate how much you have left in each category. Alternatively, use a personal expense tracker app such as YNAB. This app lets you track how much you spent in each category and determine how much you have left to spend. No manual calculations required! If you’re old school but don’t want to use a journal, you can also use a spending tracker spreadsheet from Pinterest or another online source.
Disadvantages of the Low Buy Year
While the benefits of a low buy year far outweigh the disadvantages, here are the potential cons you may come across:
Developing a Scarcity Mentality
When you dramatically reduce your spending by 60%, 70% or more, you may feel deprived. If you don’t set achievable goals, you’ll be a lot less likely to snap and go on a spending binge. Reduce the chance of doing this by starting small. Even if you reduce your spending by 20%, this is better than nothing! A low spend month can mean many things to different people. Each person is unique. Choose a goal that works for you and slowly increase your target each time you hit your goal.
Being Deprived of Special Occasions
If your low buy year includes reducing expenses on travel, you may run into situations where you need to stay home instead of spending money. For example, if a friend invites you to a weekend getaway that costs $500 but you only have $200 to spend on travel per month, you’ll either have to decline her invitation or blow your low spend month challenge budget. Reduce the chance of not hitting your goal by allocating a higher amount of money towards things you tend to spend more money on. Personally, I have a relatively high travel budget. When I do a low spend month, I reduce spending on other categories such as clothing and takeout while keeping my travel budget limit higher.
Taking Your Low Buy Year to the Next Level
While a low buy year is all about drastically reducing the amount of money you spend on non-essential, fun purchases, you can also reduce your spending on essentials. While you may think it’s impossible to get rid of certain expenses, there are ways to get creative. Here are several ways you can reduce spending in essential areas of your life and take your low buy year to the next level:
Live with Friends or Family or Get a Roommate
If you’re open and flexible, why not share your current home or apartment with a friend or roommate? Living with one, two or more roommates isn’t for everyone, but it’s an easy way to save half or more on your housing costs. Alternatively, why not live with family – even for a little bit? Living with family isn’t for everyone either, but it’s another great way to spend a lot less on your housing. Just be sure to contribute your fair share – whether it be through rent payments, buying groceries, cooking or cleaning.
Negotiate Your Utility Bills
Been a loyal customer to your phone or internet provider? Call and ask for a discount. The worst they can say is “no.” If this is the answer you get, try calling again in a few weeks. Say that you’re switching providers. Most often, the company will offer you a discount in an attempt to keep your business. It’s not an 100% guaranteed method, but it’s worth a shot! Even $20 saved per month is a great help in reducing essential expenses.
Prepare and Make Super Cheap Meals
If you don’t meal plan, now is the time to start! Create a grocery list, meal list and shop for essential ingredients. Not sure how to spend less on groceries? The easiest way is to buy in bulk and make larger meal batches. Generally, larger packages of food are cheaper. Make super cheap meals by buying cheap ingredients. Some nutritious, filling and inexpensive foods include:
- Pasta
- Rice
- Beans
- Potatoes
- Carrots
- Carrots
- Onions
Check out this article for more tips on how to spend less money on food by frugal grocery shopping.
Other Options Instead of a Low Buy Year
Does reducing spending on all categories for a whole year sound unrealistic for you? Understandable. Here are two alternatives you can try out that will still help you curb spending and save more money.
Low Buy Year for One Category
If you spend a lot of money on one specific category like travel or takeout, why not reduce spending on that category? If you can’t stand the thought of doing that, you can reduce or eliminate essential spending on other categories so you can keep enjoying your weekly Chinese takeout order.
Low Buy Month
Instead of doing a low buy year, try it out for a month. A one-month trial is a great way to see if you can handle learning to live on less. After the month is done, assess which categories you successfully curbed spending on and other areas you didn’t. You can increase your budget in some areas and reduce it in others depending on your goals. Once you’ve successfully completed a low buy month, try a low buy quarter where you forgo spending for 3 months. Check out more tips on how to stop spending money for 30 days here.
Try Out Unusual Ways to Save Money
Feeling creative and want to master more ways to save? Here are some fun unusual ways to save money:
- Live on a houseboat
- Rent out your house and live in your garage
- Skip Christmas this year – instead, forgo presents and cook a homemade meal to share with your family.
- Drink water before you go to a restaurant – when you’re hydrated, you’ll be a lot less likely to order an appetizer. Alternatively, you’ll be able to have an appetizer for dinner instead of paying for a main course!
- Use newspapers and other junk paper as toilet paper
- Get rid of your internet and go to the library – not ideal long-term or for those who work at home, but if you’re in a pinch and want to save more money during the low buy year, this is a great way to do so.
- Choose free hobbies such as hiking, volunteering or meditating.
Be careful not to be too cheap though. There are some things that are worth the money – for example, spending money on fresh fruits and vegetables for the sake of your health. The difference between cheap and frugal is subtle yet distinct.
A Final Word on Participating in a Low Buy Year
A low buy year is one of the best ways to curb spending, kickstart good habits, appreciate life’s simple pleasures and save more money. Start small with one area of spending and build from there. As long as you save more than you spend, you’re on the right track. If you’re feeling stuck, enlist the help or partnership of a family member or friend to do the challenge together!
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Janita is a frugal living expert and owner of Frugal Fun Finance. With over five years of personal experience finding and trying out the best ways to make and save more money, she's eager to share her knowledge. Janita's strategies have helped her save thousands of dollars for funding investments and traveling to over 20 countries.
Janita completed training in personal finance at The University of Western Ontario and McGill University, two prestigious Canadian universities. Her expertise has been shared on GoBankingRates, Yahoo Finance, and NASDAQ.com.
