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Ramit at I Will Teach You to Be Rich has announced his Save $1,000 in 30 Days Challenge. During the month of November, he’s urging people to get off the couch and actually take steps to reduce their spending. Here’s what he writes:
Right now, people don’t care about proper asset allocation or understanding average stock market returns. The people I’ve talked to want to know how to save money right now. [...]
Each day in November, I’ll post one suggestion to cut your spending. If you spend time each day working on the day’s post, the vast majority of you will save over $1,000 each month. Even if you don’t, saving $700 is sure better than nothing. I’ll post tips for the first 15 days. For the last 15 days, I’ll turn to I Will Teach You To Be Rich readers to submit your best frugality tips.
Check out this video introducing the Challenge.
This is an unusual move for Ramit. I Will Teach You to Be Rich — which is a great site — isn’t a frugality blog. In fact, Ramit’s an outspoken opponent of what he calls “stupid frugality tips” (e.g. use two tablespoons of cocoa powder instead of three). His site usually focuses more on boosting earning potential than cutting costs.
But in this sort of economy, every little bit helps. The “Save $1,000 in 30 Days Challenge” is a great way to stop thinking about frugality and to begin practicing it.
Note: The first tip in the challenge is to pack lunches for the rest of the week. The second tip is to turn your thermostat down three degrees.
This article is about Frugality, Money Hacks Sunday, 2nd November 2008 (by J.D. Roth)
November 2nd, 2008 at 3:40 pm
As far as cutting expenses, no, mine have been very low for years. In fact, I would have to move to reduce rent to lower my expenses further, because my discretionary spending + bills is already under $1000/month.
That being said, I generally save several thousand per month anyway.
November 2nd, 2008 at 3:49 pm
Ya know, when you already do some of the stuff necessary (kinda like, ‘how low can you go’ on the limbo bar) this challenge is harder than ever….Time to put on my creativity hat
Btw, hey J.D {wave}… miss posting somedays, but always glad to read your stuff.
November 2nd, 2008 at 3:54 pm
This sounds great. I’m in. While I’m somewhat skeptical about actually saving the full $1000, like Ramit said, $700 is better than nothing.
Another thing to keep in mind is maybe to advice readers to save money in % of their income instead of dollars. That will cover lots of income demographics.
Anyway, as I mentioned, I’m definitely in.
November 2nd, 2008 at 4:11 pm
Sheesh. Three degrees? Chicken. I turned the AC off in August (I’m in the sweat-drenched south, btw) and haven’t turned the heat on yet despite three nights below 32°. And pack a lunch every day? When was the last time I didn’t pack a lunch?? C’mon, give me something I can USE!
November 2nd, 2008 at 4:14 pm
Saving $1,000 in 30 days would be 110% impossible for me. It would require increasing my income by almost a third, AND reducing my spending to zero.
Maybe if he weren’t surrounded by rich people he wouldn’t be so classist. The racial comment wasn’t necessary, either.
Putting that on the list of sites to never view again…
November 2nd, 2008 at 4:26 pm
I’m with Peggy. Maybe I could turn my thermostat down (again), but I always pack lunches! I have a feeling these tips are going to be for those who spend haphazardly, not those who are already attempting to be frugal.
I can predict another tip: something about not buying coffee or not buying lattes or something. Make coffee at home. $3/day savings at least! woo! *sigh*
November 2nd, 2008 at 4:33 pm
Yeah… I like his blog in theory but I really hate that he starts from the premise that no one could possibly use the frugality tips posted elsewhere. Blech. I’m torn. If I still lived in downtown DC then, sure, maybe this would speak to me. But I’m happily resettled in Northern Flyover-stan I’m at the point where I’ve done all the big stuff and enjoy the frugality tips.
That said, I’m sure this will help some people and that’s fantastic. But for those of us who are already paying attention and mindfully spending, not so much.
November 2nd, 2008 at 4:52 pm
Why am I not surprised not to be the first on this blog to say it:
Ramit’s 0 for 2 so far me, too - I always pack lunch and the thermostat is as low as it can go without ice forming in the toilet bowl.
Also, saving $1,000 this month would require not paying my bills - I never have that much disposable income.
November 2nd, 2008 at 4:52 pm
One thing I like about personal finance blogs is that they exist on a continuum (or several continuums, actually). Trent at The Simple Dollar is very much into frugality. Ramit? Not so much. I’m somewhere in the middle, though I lean toward frugal.
Because we’re each different, we each have different opportunities to explore new ideas. Though many GRS readers will have probably already implemented Ramit’s ideas, some won’t. And Ramit’s overall theme of boosting income is, I think, good for everyone.
If you need help with frugality, definitely tune into this series. If not, you’re ahead of the game.
November 2nd, 2008 at 4:52 pm
Hey… I’m willing to try it. This comes at a perfect time: this very day I made the decision that if (ooohhh puh-leeeze, God) I’m laid off in December I will refrain from even trying to get another job but instead try to live on freelancing and Social Security. This will require a lifestyle change (to put it mildly).
R’s alleged disdain for day-to-day frugality doesn’t bother me: it takes more than one approach to create a rounded view of life, the universe, & all that. Besides, if he succeeds in teaching his readers to be rich, we shouldn’t have to pinch pennies anymore, right?
November 2nd, 2008 at 5:09 pm
The first tip will save me $186 - not bad for Day 1. The second tip (thermostat) is irrelevant for me right now, but got me seriously thinking about means and ways to keep warmer this winter without switching on the heating at all.
November 2nd, 2008 at 5:49 pm
I actually really like JD’s comment even more than the blog post: ways to increase wealth money exist on a continuum. I’ve never quite liked the frugal vs. non-frugal distinction, but at the heart of it all, we are trying to help people lead financially better lives. But how do you do that?
At the very small scope, we can give you a flood of tips about how to reduce expenditures. Micro-management works, but it is a pain in the ass. I’d love to be able to give people an effort/savings ratio, so they could see what was lowest effort for the highest payoff. Someday I’ll have the time to do that.
The next level up is really just bigger lifestyle tips: fuel efficient car, optimized rent and bills, etc. And above that, we start talking about infrastructure. Is your money in the right accounts? Are your accounts high yield?
But even above that, and the thing that I think we also need to be talking about, is actual “life” advice. We need to be helping people get the education that will get them a job that pays a decent salary. We need to motivate people to more than just pinching pennies, but actual lifestyle change.
And there is a whole backend of advocacy that could go along with that. Making sure there are banks that aren’t screwing people over. Making sure that tax and other laws are written in a way that actually benefits the bulk of the population, etc.
The thing about PF is that we need all of it. Which I suppose is why I end up reading Ramit and JD and Trent and a bunch of others, plus writing for Thrive’s blog and our product. Because, man alive, people really do need help, not just to get rid, but to get by.
Sorry for hijacking, JD: at work too late on a Sunday, talking to users that are struggling to pay the bills.
November 2nd, 2008 at 6:17 pm
I’m in! I am also going to try to make an extra $1000 as well as save $1000. I already listed a few things on Ebay and one (shockingly) sold in the first hour!
~The Bargain Shopper Lady
November 2nd, 2008 at 6:35 pm
Hey, forget saving $1,000.00 in 30 days. How about make $1,000.00 in 30 days?
November 2nd, 2008 at 7:05 pm
Just by packing lunch, making coffee and not buying things I didn’t need, I managed to save $1000 during three consecutive months earlier this year.
Lots of exceptions on my case: I am a grad student, don’t need to commute because I can see my uni from where I live, no debt, etc etc.
However, after putting enough money together to travel, I don’t feel like doing the same anymore. I want to enjoy my life. I read about the Balanced Money and that was something I already was considering to do anyways — I loved to see it written on someone else’s words.
BTW, first comment ever, although been reading GRS for six months. Thinking of freelancing/blogging for a year and you, JD, are a great inspiration. Keep up the good work!
Cheers,
D.
November 2nd, 2008 at 7:10 pm
I’d have to stop getting massages and drinking caramel macchiatos. that ain’t gonna happen.
November 2nd, 2008 at 7:21 pm
for the record, I like tips such as using two spoons of cocoa rather than 3. It’s all about perspective. My perspective is that tips like these are about conservation of resources, which gives me more satisfaction than having more money to be able to ‘afford’ to waste more. Reduce, reuse, and recycle! Be happy with less. I like it when you touch on these themes. Reducing consumption builds character, as my dad would say. The richness of your life isn’t about the richness of your cocoa.
November 2nd, 2008 at 7:23 pm
$1000 is a paycheck. Sometimes financial/frugality sites are out of touch with those who do not make a lot of money.
November 2nd, 2008 at 7:27 pm
As the saying goes, ‘the devil is in the details.’ Frugality starts with paying attention, and sometimes that IS counting 2 tablespoons of cocoa instead of 3.
G.
November 2nd, 2008 at 7:34 pm
$1000 is over half my net income. somehow i just don’t think saving that much is possible for me :S
November 2nd, 2008 at 8:16 pm
J.D., I think it’s gracious of you to recommend this challenge even though he calls gardening to save money a “retarded” suggestion.
He might have good ideas, but I find his style off-putting, if not offensive.
November 2nd, 2008 at 8:45 pm
Yeahhh… I’m looking forward to seeing what he has to say (and thanks for letting us know, because I’d never seen his site before), BUT I’m with everyone else who says “what, now? I already do that/better than that!”
I work from home and rarely drive at all, let alone buy lunches out. My husband works a 10 minute drive away, and he’ll either come home for lunch or pack a lunch and take it with him.
We have our air/heat off right now because it’s so nice (windows open = yay) BUT we live on a military base and our utilities are included in our rent.
Not to mention that (not including BAH which goes straight to our rent) we only bring in about 2300 a month, pay 800/month on our one loan, and are generally quite frugal. Heh.
November 2nd, 2008 at 11:05 pm
You probably have to be making over 1,000 a month to save a 1,000 in a month ;). I’m a very poor student.
November 2nd, 2008 at 11:32 pm
Interesting challenge. I don’t think I will learn anything new here that I haven’t already been doing. Bagged lunch 3 or more times a week? Pfft. Too easy. The challenge I’ve been working on is making gourmet lunches under $2.50.
It looks like his audience is consumerist yuppies that probably do need to learn a few things about savings. Anything that encourages saver instead of spender habits is a good thing, in my book. I’d like to see Americans embracing savings again.
November 3rd, 2008 at 3:17 am
My lunch is in the fridge. Nothing to pack.
Here’s my ultimate frugal tip: don’t leave the house.
Thermostat? Well neither my heat or AC are on now. The thermostat is set but it is too hot for the heat to kick on. It would probably help If the weather didn’t change from needing to defrost one day and 80 degrees the next. AC has been off awhile. Then when I turn heat on, its 80 degrees the next day.
November 3rd, 2008 at 4:41 am
I like the idea of saving more money and encouraging everyone to practice some frugality in the very least, but his constant use of the word “retarded” is offensive and childish.
Maybe he needs to work on his communication style instead of recycling frugality tips.
November 3rd, 2008 at 6:47 am
Good comments, Matt. I agree.
November 3rd, 2008 at 7:09 am
Interesting challenge. I can tell right now that it’s not going to work for me because a) I don’t earn enough money, and b) I probably already do most of what’s on his list.
So I’m going to use the challenge as a reality check to see how well I’m doing. I’m going to keep track of what I could be spending if I wasn’t using these tips. (For example, my first entry today would be $150 saved for packing my own lunch everyday).
I’m curious to see how much I could be spending if I didn’t already use frugal tips
November 3rd, 2008 at 7:18 am
I’m in. I’m sort of blown away by the negativity towards his challenge in his comments (and, to an extent, here). So much huffy “I already do that” instead of constructive commentary or (as he asked) estimated savings. Maybe it’s because I’m a cynical urbanite too, but I like Ramit’s style a lot. There are so many boring nicey-nicey bible quoting american parents of three in the money blogosphere that I can rarely distinguish between them …. the different and unique tone is refreshing. Looking forward to the next 28 tips!
November 3rd, 2008 at 7:39 am
As a Grad Assistant, I only make $1000 a month after taxes!
November 3rd, 2008 at 7:44 am
The first 2 tips *are* frugal… What does he mean by frugality?
November 3rd, 2008 at 7:49 am
It’s true that if we’re already living ‘lean’ we need tips more subtle than the current one. What really interests me is combining financial strength and character with our overall character,integrity — and happiness.
http://www.diamondcutlife.org/what-is-the-diamond-cut-life/
November 3rd, 2008 at 7:50 am
Unless I skip on rent, I can’t save 1k. I can squeeze a quarter out maybe, $250. I wish our job would do the 4-day work week and not 5. That would cut down on a day worth of expenses.
November 3rd, 2008 at 7:55 am
Where I tend to agree with Ramit is the emphasis on critical thinking. If you haven’t sat down with a pencil and paper and analyzed whether renting versus owning is better for you (as an example), rather than blindly following the financial blogger of the the week who says renting is always bad, then you are a fool. I ran my numbers long ago on the cost savings of lunch out versus bagged. If this is something new to people and encourages them to do so, that’s a great thing. When he mentions cost cutting for his friends that they won’t be able to go out for drinks 4 night a week, this is pretty much the demographic that needs this advice because their make money and burn tactics are causing a sustainability problem. I like that this is ‘what you can do right now’. However, I like blogs like GRS for sustainability opinions.
November 3rd, 2008 at 8:41 am
i could save $1000/mo if i lived in my car, maybe.
packing lunches and turning down the thermostat are parts of daily scraping by and making ends meet, i couldn’t make the bills and still eat unless i did those already.
November 3rd, 2008 at 8:53 am
I find the comments here interesting. Several people on here have mentioned that Ramit likes to call things “retarded”. I find using that term (and others like it) to be counterproductive and indicative of a lack of critical analysis (maybe I’m just an east coast elite). But then someone else just commented that they like Ramit’s ability to be analytical. Color me intrigued, I’m going to check it out.
November 3rd, 2008 at 9:44 am
Most of these comments just back up what JD emphasized in his response. The demographic reading these blogs are definately different (if you want to se how much compare JD’s story to the “money diaries” that were run on Ramit’s site the last month!!!!)
As far as the approach and vocab used, I don’t hink it’s over the top. Ramit tries to connect with a younger (read: less frugal - no age knock, I’m only 23) audience then the average reader of this site.
As far as not being able to get away with the full $1k, the point is to get away with as much as possible, so just the attempt should be enough. I’ll give it a go (especially trying to sell stuff on eBay).
November 3rd, 2008 at 10:10 am
I’m doing something similar this month, but instead I have cast it as a spending crash diet. My family is only allowed to spend $400 this month on everything excluding utilities, like gas and groceries. I wrote about it here:
http://www.savingadvice.com/blog/2008/11/03/103221_spending-diet.html
November 3rd, 2008 at 11:37 am
I’ve been turning the thermostat down 3 degrees every year. I love to sit in my living room and make “smoke” with my breath.
November 3rd, 2008 at 12:02 pm
One tip I rarely see mentioned is to ask your power company if they have a managed payment plan. In this case, they’d average your monthly usage from the previous year and bill you based on that — but it’d be a set amount every month and thusly great for budgeting. We live in the Phoenix, Arizona area, so our summers see a lot of A/C use, sometimes to the tune of $350/mo. On the managed payment plan our monthly bill is around $150; the 6-8 months out of the year where we turn the A/C off (like now) make up for the few months where it’s 110F+ outside.
November 3rd, 2008 at 12:17 pm
Most frugality tips are useless to already frugal people, and the problem is the tips that will work for them tend to border on the extreme. Last week I was reusing plastic baggies for my lunches and pondering whether I’d crossed the line into crazy (in my defense I was out of baggies and refused to go to the store for more). I brown bag it most every day of the year. In Los Angeles our heating and cooling costs are small and there’s nothing to be gained by cutting back. I’m not familiar with this guy’s blog, to me frugality is an everyday thing and only loosely associated with saving money. It’s also about living more simply, using less resources and sustainability, the money savings are a bonus!
November 3rd, 2008 at 12:25 pm
If you break it down by day, it’s only $33.33 per day.
I am going to create a recurring transfer with my bank account every day for $33.33 to go from my spending account to my savings.
November 3rd, 2008 at 2:08 pm
I don’t use plastic sandwich bags for my lunches anymore. I bought small sandwich sized containers that I wash and reuse every day. I also bought a couple of fantastic compartmentalized Tuperware containers that I use for 2-course leftovers-for-lunch. The Tuperware containers were not cheap, but I bought them like 8 years ago - they have more than paid for themselves.
November 3rd, 2008 at 2:44 pm
I agree that people need to try saving, or quit complaining about being broke. I will be impressed if he succeeds. Good luck!!!
November 3rd, 2008 at 5:44 pm
Don’t know if you’ll make 1,000 but I’ve started doing this and made $24.98 in a month. Maybe I’ll make an extra $1,000 in a year. I take the amount of my coupons and any savings my supermarket gives for using my customer card and I transfer that amount into my savings account. I’m not charged for the transfer so .50 here $1 there; it’ll add up.
After all it’s not a savings if I spend the amount somewhere else.
November 3rd, 2008 at 6:24 pm
Ohh this challenge sounds like fun. I’m going to try
November 4th, 2008 at 4:50 am
So since I spend less than a thousand dollars a month, does this mean that I’ll actually be earning money if I follow his advice?
Seriously. I haven’t got the heat turned on yet, pack lunches every day, and have nothing to sell. This kind of advice makes me imagine that richer people live lives of total madness, flinging money around like kleenex.
November 4th, 2008 at 8:43 am
Well, he may be obnoxious, but at least he’s offensive.
Line me up with the “don’t have that much disposable income in a month” folks, and I’ll take a heaping helping of “he can take his racist attitude and stick it sideways”. Is he always that patronizing? Or was it something special to attract new readers?
It sure didn’t work for me.
November 4th, 2008 at 9:08 am
I agree with La BellaDonna.
In his comments, he points out that he isn’t trying to post universally useful tips, but rather tips that he himself would use. Why, then, can he not respect that other people might find gardening tips useful as opposed to retarded?
The thing is, I used to read his blog, and while I didn’t always find his writing enjoyable, I found it thought-provoking. Now I just feel he doesn’t respect those of us who use different methods than he does.
November 4th, 2008 at 9:45 am
Unfortunately, he lost me at #4. I’m not going to spam my friends with his promotional material. Maybe betting your friends to save a certain amount of money sounds like a “cool” thing to do for some people, but many of my friends are just trying to make ends meet.
And he thinks that telling everyone about his challenge is going to save $100 - $500 dollars? Come on!
November 4th, 2008 at 9:57 am
Thanks for all the comments. J.D. and I talked about how different the comments are here vs. on my site, and I definitely understand we have two different audiences.
A lot of the comments here have to do with the fact that some people may not be able to cut $1,000 of fat from their budget. True — which is why I wanted to add the “earn more” and “optimize existing spending” to the challenge. But as I said, lots of people may not be able to save $1,000. Still, $200 or $500 is still better than nothing.
And my site is definitely written for a different audience, hence the different language and the focus on entrepreneurship/earning money instead of frugality. There are plenty of excellent bloggers on frugality (including J.D. and Trent from SimpleDollar). I’m not one of them.
In fact, the challenge was designed for people who have a bunch of financial fat they can cut out of their lives (aka, a lot of my friends). If you’re frustrated that the tips don’t apply to you, I’m willing to bet you’re already frugal. In that case, the only suggestion I can think of is to earn more and optimize existing spending (which I’ll cover in a few days).
Btw, this has now become way too long, so I’ll just point you to 3 other commenters on this post who made my points better than I did: guinness416, Cathy, and Miss M.
November 4th, 2008 at 2:37 pm
Save 1000$ in a month. It can be very easy to very hard, it depends of course how much is your income to start with…When single, it was easy. Now a family man, how can be cut on stuffs we have already cut on?
January 6th, 2009 at 2:55 am
I actually just did this same thing this past month. I worked a full time, minimum wage job in Alaska. I earned lousy paychecks obviously but working as a waitress in a very “slow time of the year” in a restaurant still earned me over $1000 in LESS than 30 days.
January 13th, 2009 at 3:39 pm
Reading the comments, I’m really surprised by how people reacted so negatively simply because the tips don’t apply to them. Is it just me or is it obvious that not all his tips regarding saving money will apply to ALL people? It’s nothing to freak out about. If you hear something that may help, go with it. If not, move on.
I also wanted to say that in general, the more money people make, the more that they feel like they need to spend more lavishly. And once these habits develop, it can be quite costly and difficult to reverse. I just started working a year ago and I quickly learned that working life costs more than college life. While I have more income, I spent a decent amount on work clothes, shoes, and accessories this past year. My new friends go to nicer bars, fancier restaurants, and on better vacations. I bought real furniture for the first time (plastic drawers from Target don’t count) and had to start paying back my student loans. When I was in college, I was able to live off less than half of what I make now. Point is, making more money sometimes requires spending more and saving isn’t always easier(especially when you first start working!).
I’ve talked about wanting to save money but it hasn’t been until recently that I’ve really NEEDED to spend less. I got a wakeup call when my credit card (that has a relatively high limit and had 0% APR until a couple of months ago) got maxed out. I realized that I need to be a smarter spender and pay off my credit card debt.
I just turned down my thermostat by 5 degrees this past weekend so I’m going to count that as completing the second tip. As for the lunch part, it’s going to have to wait until next week because I can’t afford groceries until the 15th. *sigh*