You’ve made the commitment to do better with your finances, but now you may be wondering how to keep this New Year’s resolution.
I know some of the questions you may have. What’s the best way to pay down my debt? Where in the world will I find the money in my budget to start an emergency fund or build up the tiny one I started but raid all the time?
It’s not enough to make a promise to do better. You need a plan. And not just a plan with broad statements such as, “I want to save more.” You have to set SMART goals — goals that are specific, measurable, attainable, relevant and timely.
Last year, hundreds of readers from across the country joined me in doing a fast based on my book, “The 21-Day Financial Fast: Your Path to Financial Peace and Freedom.” It was so successful that many followers on Twitter and Facebook have asked that I repeat it again this year. Concord Church in Dallas is doing the fast and has set up a special page on its Web site — and will be helping folks with links to financial resources, daily devotions and video testimonials.
Likewise, I’ll have a schedule of chats on Twitter, on Facebook and at washingtonpost.com. My group fast will start Sunday, Jan. 11, and end Jan. 31. To help you stick with it, I’ve created videos for each day. You can find them on YouTube. Search for “The 21 Day Financial Fast Playlist.”
So exactly what is a financial fast?
I developed this biblically based fast as part of a ministry I direct at my church, the First Baptist Church of Glenarden, Md. It requires that for 21 days, you can’t buy anything that is not a necessity. And — this is the hardest for some — you can’t use your credit cards. I even suggest that participants stop using debit cards because contrary to what you may think, debit is not the same as cash. You can just as easily overspend by swiping your debit card as you do with your credit card.
You may also be wondering what qualifies as a necessity.
Here’s a list of what you can spend on during the fast: food (bought at the grocery store), medicine, essential personal hygiene products, items that may be required for your job, your regular household bills such as rent or a mortgage, car payments, utilities, gas and even your credit-card payments. This isn’t an all-inclusive list. The point is you continue to pay for the things you need and the bills you already have.
Here’s what you are not allowed to do during the fast: go to the movies, shop for clothes, buy lunch or coffee at work, pay for any restaurant or fast-food meals, spend on entertainment. The goal is to shut down all conspicuous consumption. You will temporarily stop spending on things you can do without.
It’s important for you to understand that the fast isn’t just about shutting down your shopping or credit use. At its core, the financial fast is about breaking the chains that keep you from being a better manager of your money. While you are in a restricted-spending mode, it allows you to focus on what you really want to do with your money. When the fast is over, go ahead and spend on the things you truly value. But hopefully it will be easier to cut expenditures that aren’t important and don’t help you reach your financial goals.
After you’re out of debt and/or saving more, if you want nicely brewed — albeit pricey — coffee, don’t cut it out of your budget if it’s part of a workday routine that comforts you. But don’t buy lunch, too. Or perhaps your regular hair appointment is your opportunity to get pampered because you are always doing for others. Keep that expense, but cut out something else that doesn’t matter as much.
The best way to read the book is one chapter a day. There are daily assignments. On Day 7, I ask you to begin working on your budget and I give you a template in the book, or you can download one for Excel. On Day 12, there’s a specific plan, “The Debt Dash,” to help you get out of debt.
Information about the fast will be aggregated at wapo.st/financialfast. On the site, you can sign up to be notified about fast-related events and read postings by others following the fast. You can also tweet your questions on Twitter to @SingletaryM. When posting, please use the hashtag #financialfast. I’d love to hear from you as you to take this journey to financial freedom.
Write to Michelle Singletary at The Washington Post, 1150 15th St. NW, Washington, D.C. 20071 or firstname.lastname@example.org. Comments or questions may be used in a future column, with the writer’s name, unless otherwise requested. To read more, go to http://wapo.st/michelle-singletary.