The Broke Generation is all about making money interesting. We’re nifty, not thrifty, and the spending pattern we’re talking about in this article is one of our favourites.
The Diet Series applies nasty diet principles – that we as a generation seem more than happy to adopt when a smaller dress size is at stake – to our finances. While fad diets are bad for our bodies, what they are good for is breaking down a larger goal into more manageable nuggets of effort. Losing weight and living a healthy lifestyle is a long game – it’s about adopting completely new habits and sticking to them for life. Boring, right? And essentially, that’s what budgeting is. But our millennial brains can’t compute such long term concepts.
So today we’re looking at the idea of intermittent fasting and how this can be applied to our finances. I recently read an article about using the 5:2 pattern when it comes to spending. 5:2 involves dieting for 2 days and eating normally for the other five. The article I read suggested flipping this on its head, and not spending anything for 5 days (usually Monday to Friday) and only spending at the weekend. While this is an interesting idea, I’m not a fan.
Because we are millennials. We can’t possibly get on board with a spending plan that means we skip our soy capp before the morning meeting every Wednesday, and how on earth do they expect us to cope without avocado on toast for 5 days at a time?
I know – outrageous.
So, The Broke Generation’s idea of intermittent fasting for your finances works on more of a month-by-month model. We believe that having one lean week a month could make a big difference to your finances.
For this to work, you’ll need to open a savings account that is NOT linked to any bank card – if you haven’t already. This way, you can’t tap into your savings on your lean week.
Here come the numbers.
Let’s say each week you earn $850 after tax.
The non-negotiables are your rent/mortgage and your bills. Let’s estimate those here:
Rent/mortgage – $250.
Bills (phone, utilities, subscriptions, etc) – $100
That leaves you with $500, that on a normal week would go on things like grocery shopping, coffee, brunch, drinks, shopping and possibly some set aside for savings.
So, what if 3 weeks of the month you live comfortably. You buy the things you want from the supermarket – avocados, apple cider vinegar, all that millennial shit. You get a coffee before work, or buy lunch when you’re peer pressured by your colleagues. You don’t say no to that after work wine, or that Sunday arvo Aperol.
And then, one week of the month, you go hard on the budget thing. You pay your rent/mortgage and bills, and then, with that remaining $500, you take $50-$100 and live on that for the entire week. You move the remaining $400 over to your untouchable savings account, and for 7 days only, skip coffee, skip the wine invites, take lunch to work every day…all that stuff. And in the supermarket, you buy the very basics. I’m talking beans on toast, rice and vegetables, oats, bananas, pasta and a basic sauce. It’s only 7 days!
Then, when payday rolls around again, you continue living your best live, with those excess savings from your one lean week tucked away in your savings account. Live this way for a year, and you’ll find yourself with about $5000 in your untouchable account (if your numbers are similar to our estimates. If you earn more or pay less rent, you’re totally winning).