Do you often complain about your wages seeming to disappear as soon as they enter your bank account? For many of us, living from month to month in terms of spending is a common occurrence. But have you ever wondered how much you could save if you really budgeted? Michelle McGagh did just that and managed to save up a massive $23,000 in a year by forgoing luxury items and sticking to the necessities. Don’t think it’s possible? Think again!
The Story Behind The Experiment
Michelle McGagh came across as an irony – she was a personal finance journalist for 10 years who wrote about how people could spend their money better, yet she wasn’t doing it herself.
She found she was caught up in the common belief that spending more would make her happier, and she believed that buying the latest products would enhance her life in countless ways.
So, the idea was born to spend a whole year only buying necessities – no fancy dinners out, no getting the bus on a rainy or windy day, no excessive beauty products or holidays away.
Instead, she stuck to cycling or walking to work, cooking cheap homemade meals, wearing only the clothes she already had in her wardrobe and only buying necessary items such as toothpaste, soap and shampoo. It was time for a massive change. It seemed an uncomfortable prospect at first, but changing her habits and mindset towards money was key in carrying out this experiment successfully. And so, the journey began.
What She Learnt From Living Thrifty
By carefully cutting out daily coffees from the local café and making her own brew, cancelling her gym membership and exercising at home instead, and swapping expensive concerts for free gigs and exhibitions, Michelle learnt a new way of life. As she explains it:
“I won’t pretend it was easy, though, especially the first months when I tried living my old life but with no money. Sometimes, I had an urge to forget all about it and lose myself in a shopping spree, get drunk in a bar, or just buy a bus ticket instead of climbing onto my bike again on a windy day. However, I understood something important: you don’t have to open your wallet every time you want to have a good time.”
While saving money was her ultimate goal, the most important lesson she learnt was the fact that spending money didn’t always equal happiness.
A Difficult But Rewarding Journey
Of course, it wasn’t all easy. Cutting out all her splurges and pampering expenditures was hard, and after a year, her clothes were starting to wear out, her hair was in desperate need of a hairdresser and she missed her takeout food and coffee dates with friends.
However, she describes how she’s learnt to efficiently budget food and find the best bargains and even how to cook – skills she never would have gained had she not gone ahead with the experiment.
The biggest bonus of all? She managed to save a whopping $23,000 that went towards her mortgage, which she had been convinced she would need to spend the next 25 years paying for.
“The most important result of the year for me was that I became more open for adventure and new people. I learned to say “yes” to all things new. And I also realised how little I need to be happy.”
So, if your bank balance isn’t looking how you’d like it to, think about what you really spend your money on. What could you cut out? Weed out the necessities from the luxuries and see how much money you can ultimately save. It might just change your life in more ways than one