Save Money By Being Poor for a Week

In the current economic climate, it seems that just about everyone is trying to find ways to save money and prepare for the challenging months ahead.  I recently challenged myself to live on only $100 for an entire week to see if I could and what I would learn.

I didn’t realize that the project would be so tough, rewarding, and powerful.  Throughout the course of 7 days, I experienced a myriad of emotions, and learned a lot about myself and my spending.  The best part is that I’m sure you would experience the same powerful effects I did.  Being poor for one week can give you amazing insights on how to save money every week that follows, more than passively reading articles such as 15 Tips for Saving Money or even Reviewing Your Personal Finances.  This provides real lessons taught the best way possible – through experience.

Moreso than any of my other projects, I highly encourage everyone to give it a try. Maybe $100 isn’t the right number for you, but based on your current financial habits, try spending 75% less than your normal weekly budget.  A quick tip: take notes throughout that week, because you’re going to learn a lot.

Still not sure if it’s worth trying? Or wondering what you could learn by doing the challenge? Keep reading to see what you’ll learn about saving money by being poor for a week.

Sensitivity to True Cost

When you have a very limited budget, you start to look at everything you spend money on in terms of “true cost” – the cost of the item or service compared to it’s value, and what you’re giving up in order to have it.  I especially thought about this in terms of food. When deciding between a $3 box of cereal or $5 pack of chicken nuggets, you have think of the actual “cost per meal” (the total cost of all ingredients divided by the number of meals it supplies). The box of cereal requires milk (+$2.39), but will also give you 6-8 light meals. The chicken nuggets will likely fill you up more and don’t necessarily require any sides, but will only get you 2-3 meals.

Why It Helps – Learning about true cost first hand will help you make better purchasing decisions in the future.  It’s foolish to spend $100 on something you’ll use only once.  It’s smart to spend $100 on something you’ll use 100 times or more.

Your Image Is Expensive

Living cheaply means choosing functionality over design or style. Though my leather laptop bag is more in style, my backpack can carry more stuff and has the added advantage of being better for my back. Similarly, it’s hard to justify the added cost when two things have equal functionality, but the more stylish one is more expensive- as is the case with wearing glasses versus contacts.

Your image can also take a hit if you go from a position of affluence to one of financial struggles. Keeping up the façade of having money is tough to do and at times not worth the cost. If you work in the corporate world, it may be important to keep a professional appearance. This means remaining clean-shaven, keeping your clothes pressed, and wearing more expensive dress pants instead of shorts. But living cheaply also means swallowing your pride and declining on Starbucks, even if you’re co-workers are going.

Why It Helps – Many fashion items have the highest true cost associated with them, and are often the least functional.  By thinking about the practicality of an item before purchasing it, you can realize if it’s worth the investment and hassle of even owning the item.

Variety Isn’t Cheap

Variety is the spice of life, but not of living cheaply. One of the things I noticed on my limited budget was that I quickly grew tired of having turkey sandwiches and carrots for lunch. But buying items in bulk is cheaper and drives down true cost. It’s hard to justify spending more money on different options for lunch when you know there’s very little money to go around.

Why It Helps – It’s the simple things that really make a difference.  Until you experience eating Ramen noodles every day, or doing the same activity daily, you won’t appreciate how the smallest changes can make a day more enjoyable.

Hard Times Inspire Creativity

As the days progressed and my budget shrank further, I found more creative ways to save money and still be happy.  Whether it’s new ways to cook chicken, or how you can have fun with just a pen and paper, your mind starts to see everyday things in a new way.

Why It Helps – There’s a common belief that you have to have money to have fun and be happy.  Once you accept your financial limitations and start thinking positively, you find ways to still have fun by experiencing the free (or at least cheaper) things in life.

Barebones Living

It turns out that one of the best ways to declutter your life also applies to saving money.  When you want to get rid of the crap of your life, one method is to put almost all of your belongings in a specified place in your home, such as a closet.  Then, as you truly need an item, you retrieve it from the closet.  After a certain amount of time (a couple of weeks), anything you didn’t get out of the closet that isn’t seasonal, you can  safely get rid of.

Well the same method applies to your finances. I realized that I didn’t really miss dining out that much, but that I couldn’t survive even a day without Internet access.  To cut my expenses, I know that I should focus on cooking at home more, not stopping my Internet service.

Why It Helps – If you cut down all of your spending (dining out, subsciption services, alcohol), you’ll learn what you really need, what you really like, and what you were mostly wasting money on.

Reduce, Reuse, Recycle

When you don’t have the money to buy new crap, you start finding uses for your old crap.  With a limited budget, I couldn’t afford to go to the movies.  But that didn’t really matter, because I had plenty of DVDs that I’ve either never watched, haven’t seen in a long time, or didn’t watch the special features for.  Also there are plenty of secondary uses for many items – plastic bags can carry your lunch or serve as garbage bags, junk mail can serve as scratch paper, and baking soda can be used for about 800 things (ok, maybe 60).

Why It Helps – Using that new-found creativity from a restricted budget, you can start seeing how items can be re-used before you even buy them, helping you choose the items with the lowest true costs.

Money Triggers

While trying to stick to my budget, I started to see where I would normally want to spend my money. Once you’re hyper-sensitive to where you’re money is going, you learn what triggers you to spend money in the first place.  Some common triggers include dating (you are, after all, trying to impress the person), friends, alcohol, poor planning (if you have a busy day and forget to pack multiple meals, you either starve or have to dine out), and laziness.

Why It Helps – The only way you’re going to prevent spending money is to know what causes you to spend it in the first place.  By identify the triggers, you can take steps to correct them, such as learning how to relax and have fun without alcohol, or waking up earlier so you have more time to prepare for your day.

Money Isn’t Everything (In Fact, It’s Hardly Anything)

I’ll admit, at the beginning of the week, I was not happy.  I made it a point to fully immerse myself in the experience and really believe that $100 was the absolute max I could spend during that week and for weeks to come.  As a result, as I made sacrifices and tough choices, I becamed depressed and pitied my situation.  But as the week progressed, as I learned ways to cope with my budget and accepted my situation, I realized feeling sorry for myself didn’t do anything to help put food on the table; it just demotived me.  I accepted my circumstances and decided to build from there- it was an example of “yes and” in real life.

Why It Helps – The cliche is that money can’t buy happiness, and you’ll start to realize that’s true.  There’s a reason that even the richest of people end up depressed- material things aren’t the answer.  Living a week without money helps you realize that, and decreases the importance of money in your life.  Sure you’ll still work to make dough, but you won’t put an unwarranted significance on it.

You Can Survive

The ultimate realization you’ll have at the end of the week is that you can survive.  Regardless of what happens, you can make it through it and come out in the end.  I know that I can live on only $100 a week, and even less if I had to.  I hope to never be in that position as I’ve worked hard to earn where I am now, but if something were to knock me down financially, I’d be able to get back up.

Why It Helps – Having the confidence to know you can take a licking and keep on ticking is powerful.  It emboldens you to make stronger choices and bigger risks.  At the same time, it helps you appreciate the important things in life.  No one lays on their deathbed wishing they had more money; they wish for more time with their friends and family, experiencing life.

A Poor Week Leads to a Richer Life

I can promise you, if you go through this experience, you’ll come out feeling richer at the end.  Not only will you actually be richer (you did, in fact, spend 75% less than you normally would), but you’ll also know how you can personally save some more money, and start appreciating the more important things.  Have you tried the challenge?  Post about it in the comments.

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