Every January, people attempt to detox after the holidays. But usually by week two or three—and certainly by February—we’re back to our old ways: shopping, happy hours, eating ice cream in front of the television. But you can actually do real detox damage in just a week, and the 7-day challenge I’ve outlined below will set you up to stay financially sound well into the new year.
Day 1: Admit You Have a Problem
This is probably the hardest step. Denial is our friend when it comes to spending money. But repeat after me: admit you have a problem! It’s nothing to be shameful about. We’ve all been there! Sometimes it helps to say this aloud. Call up a friend or a co-worker, actually tell them you have a problem, and explain what it is. It’s good to have support and voicing your issue will make it more concrete.
Day 2: Write Down Your Money Goals
Writing down goals is a good way to refer to something concrete and not just abstract in your head. Write down your 1-, 3-, 5-,7-, and 10-year goals which will all vary a little. Do you want a promotion in two years? Do you want to be able to send your kid to college in five years? Buy that summer home in the Hamptons? Graduate college without student debt? Every time you blow money on a pair of shoes, that’s taking away from both your short and long-term goals.
Day 3: Gather Your Receipts and Organize Them
Gather all your receipts from December and lay them out in front of you (and print out your credit card statement). This might seem like a scary step, but we’ll be tackling those splurge purchases soon. Then organize them into three categories, the 3 Es: Essentials, Extras, and Endgames. Chances are that you’re going to be looking at a lot of receipts in the “extras” category, those leftovers from all that holiday shopping. This is a good step for you to trim the fat as they say. Your “Spending Plan” breakdown should look like: 70% of your take home pay should be going to Essentials (housing, food, gas, transportation), 15% goes to the Extras (the fun stuff), and 15% to the Endgame (your savings).
Day 4: Call Your Service Providers
- First, call your main service providers (cable, cell phone, credit cards) to negotiate a better rate. Make sure you are using the services you’re paying for (goodbye, bundle programs!) and threaten to leave for a competitor. Most providers will throw you a bone versus losing you as a customer.
- Then, call and negotiate any outstanding medical bills. You shouldn’t pay sticker price for anything, not even your health. Inspect bills closely to ensure that you’re not paying for any services or medications you didn’t receive, and do some research into what treatments in your area typically cost (Healthcare Bluebook is a good resource to get started).
Day 5: Look At Your Monthly Payments
Take stock of your monthly payments and subscriptions, like Netflix and the gym. Are you still paying for the gym even though you haven’t gone since the first lockdown in March? Did you sign up for a free trial of Disney+ and then forget to cancel? Cancel any of these monthly payments that you aren’t using and look for ways to bundle any of them together.
Day 6: Order Your Credit Report
Order your credit report and check your credit score at www.annualcreditreport.com. 720 and higher = A+! Keep up the good work. Any lower than that and we should spend a little time on rehab. Your credit report is like your financial report card, and you need a pretty solid one to apply for a loan or take out a mortgage. Think you’re never going to borrow money and that you’ll just pay for everything in cash? Well, that’s like saying you’re never going to skip a day at the gym. The disciplined, winner attitude is great but delusional. Be honest with yourself and protect your future self and whatever decisions you need to make. Your future self will thank you for having your own back now.
Day 7: Identify One Side Hustle
Detoxing means adding things that are good for us. You probably weren’t drinking an 8-oz glass of juice every day before you started a juice cleanse, but part of detoxing means taking out the bad and adding in the good. Identify one way to make money on the side, whether it’s selling old stuff on eBay, reading to the blind with Aira, or teaching a Zoom class on pandemic baking.
You Did It!
You’re done! That wasn’t so hard, was it? Now do something to invest in yourself as a reward for kicking butt with the detox. And don’t let your goals and budgeting progress fall by the wayside. Continue applying what you’ve learned here well beyond this week and this month. Don’t forget about the Spending Plan just because the week is over. Return to it every week to make sure you’re staying on budget. You’ll thank yourself down the road.