August 7, 2012

The $250 Experiment

It was on the second floor of a heavily trafficked building in downtown Chicago as I was deeply contemplating the menus of Jamba Juice and McDonald's that I started to realize what I had gotten myself into. It was Day 2 of “The $250 experiment” and there I was, standing amidst the morning rush crowd debating the cost/benefit analysis between a 16 oz. Jamba Juice pure fruit smoothie and the McDonald’s counterpart – the former probably healthier, the latter substantially cheaper.

I was on a budget.

And not just the average, I’ll take the bus instead of a cab, eat out only twice a week, do my own nails type of budget. I put myself on a tighter-than-Jo Lo’s-miniskirt, strictly cash only, am I 19 again?, $250 food/drink budget. . . for the month. Did I mention I live in Chicago?

It was also when I was assessing my upcoming social events to come that month – annual festival, birthday party, bachelorette party, music concert - that I realized what I had really gotten myself into; the end of August was looking as good as peanut butter and jelly and tap water.

I don’t come up with these crazy, pain-inflicting ideas myself. Other people do that, like the family that sparked the idea who does a once a month $250 budget annually. I should do something like this, the practical side of me said, eyeing the recently opened medical bill sitting on the table, doing a quick calculation of what I could pay off in just one month by reducing my spending drastically. That's when the impulsive side jumped in with a quick decision, starting on the first of the month some changes were going to go down. Done deal, good night. What had just happened?

The practical side the next day, however, knew calling it a budget would be a very bad idea. Like the word diet, the word budget involves planning, substitution and a change of habits. It implies limitations, constraints and scarcity. It’s a bad, bad B word. So, the practical side decided that instead of going on a “budget” she was going to call it an “experiment”, turning a financial “diet” if you will into a scientific theory answering the hypothesis – “Is it possible to live and party in Chicago on $250/month?” 

The rules were simple, if I didn’t have it in cash, I couldn’t spend it. I took up the mantra, you can’t spend what you don’t have. The practical side also knew that if I was going to be successful in this “experiment” I needed a strategy to lean on:

Rule #1: Cash is king – if I didn’t have it I couldn’t spend it. Period. No, seriously.
Rule #2: If there was anything edible in my pantry that I could feed me, it would have to do. No, really.
Rule #3: When (not if) I did go out, I would take $20, which implied shifting from $8 vodka and sodas that go down like water to sipping the “poor man’s drink” - water and whiskey. (Thankfully, whiskey is in fashion right now). 
Rule #4: Borrowing from a recent weight loss article in Health magazine, when I would find myself saying “I can’t have/do/buy that” which just motivates more indulging, I would instead replace it with “I don’t want/need/or buy things on pretend money” making the experiment not something negative, but something I was in control of.
Rule #5: Rules could be broken but they would have to made up some way so that the budget remained in tact.
Rule #6: If my safety came into questions all rules went out the window.

For the most part, my plan was looking doable with the Rule #3 representing the biggest hurdle and Rule #5 possibly turning into a self-hijacker. One night out in Chicago as a single, social butterfly that didn't go as planned, and the experiment could be over. I could have picked a better month (like January) I realized as I inventoried my lean pantry recalling my college days – “What was that corn pasta thing I used to make?”. . . 

So, at the first of the month, with everything but my rent set on auto-pay, I marched to my bank to withdraw my rent and the $250 that was going to be all I had for the month. (I also had a lesson in fraud alert but you’ll have to message me to find out about that one). $250 comes out to $60 a week or about $8/day. Put in those terms a brief sense of alert swept over me. $8/day! I recalled a joke my dad makes -- if you turn left out of the driveway you automatically spend $20, if you turn right, you spend $100. The same applied to my front door but that driveway was in Louisiana. This was going to be hard. Real hard.

The first test came same day as my feet instinctively started to turn towards the grocery store for a post-work out treat. The practical side kicked in - "Um, you have leftover spaghetti in the refrigerator." Subsequent tests soon followed - pay $12 for a burger and $20 for two beers at a local bar on a Friday  night or make said burger yourself, buy a six pack and rent a movie?

I’m only on Day 7 of the experiment but I’m quickly recognizing the value of a dollar and that our world is geared for the impulsive purchase; something I was aware of but never truly respected. So far, I’m already over my weekly budget (hence my forecasting an end of month lean time) and, I’ll be honest, I’ve already broken rule #1. The culprit -- recent latte purchase at Starbucks and OTC decongestants (per life, I didn’t budget getting sick). I’d defend myself by saying that the opportunity cost of the latte was worth more to me than a future purchase but in actuality my real motivation behind the purchase was that I wasn’t willing to make a social err – being that smuck going in for free Wi-fi, but that's another social experiment in itself.

Limited resources brings creativity and I’ll report back at the end of the month to let you know how it went. If all goes well I’ll be richer and more creative with a possible new affinity for whiskey, the French language and literature. . . or maybe reality TV.

Thanks for reading!

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