For many, the thought of cutting out food delivery or giving up a daily coffee run sounds impossible.
But 29-year-old Alexis Howard has been doing it for over 10 months, ever since she challenged herself to limit her non-essential spending to $50 each month.
Howard, a wealth advisor in the Bay Area and founder of personal finance business Financially Brave LLC, decided she needed to hit the reset button on her spending habits after the past couple of years left her feeling off-balance. Starting on Jan. 1, she set out to become a more "intentional spender," she tells CNBC Make It — and has been sharing her $50 budget journey with her 62,500 TikTok followers ever since.
"Your overall wealth really starts with behavior and your budget," Howard says. "When you have a good grip on your expenses and being able to manage your cash flow, what happens is you can use that excess savings and put it back into the stock market and build wealth."
How she sticks to the challenge
Essentials like rent, utilities, groceries and medical costs aren't included in Howard's $50 limit. But discretionary activities like shopping for new clothing or getting her nails done fall under the budget.
Instead of taking a $61 round-trip Lyft, Howard opts for an $8 bus trip. To prevent spending on pricey drinks at a bar, she pregames at home. And to curb her impulse to order takeout, Howard makes sure to have easy-to-make meals and snacks on hand at home.
Luckily, Howard's family and friends have been supportive, she says, respecting that the challenge might not allow her to splurge on an expensive dinner and instead agreeing to cost-friendly alternatives like hiking, pizza nights at her apartment or free events in the area.
"What I've really tried to stress on this challenge is that just because you have a tight budget doesn't mean you can't engage with your loved ones, doesn't mean you can't go to free events, doesn't mean you can't substitute quality time with people that matter to you," she says.
This isn't Howard's first budgeting rodeo. In her early 20s, she saved over $20,000 on a $60,000 annual salary while living in San Francisco. But as she reaches the end of this year's challenge without buying a new top or treating herself to a pedicure, Howard says she's feeling the pressures of her budget more acutely than in the first half of 2023.
"I think my style has evolved, and how I want to present myself and how I want to dress has changed from who I was seven, eight months ago," she says. "It's been difficult because more time has gone by and there's been more distance since I've been able to really treat myself to non-essential stuff."
Howard is also transparent about her budget "fails" — she has gone over her $50 monthly limit this year, and did so by as much as $64 in September — emphasizing on TikTok that she measures her success "by my persistence and not my perfection."
But she's still spending considerably less than she would in a normal month living in the Bay Area, where she estimates her non-essential spending used to total around $400 to $500.
Looking at budgeting through a different lens
One of the biggest misconceptions of a budget is that it limits your happiness, Howard says.
Despite being on a tight limit, Howard has managed to enjoy nightlife with friends by opting for spots with no cover charge; travel to Los Angeles by using credit card points for flights; and attend an Earth, Wind & Fire concert by waiting until a few hours before the show to buy a $20 ticket.
Instead of concentrating on the downsides of a low-spend challenge, Howard embraces what she calls the two-reality rule: "Looking at budgeting through both a positive and negative lens, but then focusing on the positive."
While she might not be able to socialize or shop like her fellow 20-somethings, Howard chooses to focus on the benefits of this challenge: She's building discipline and accountability while learning how to be more intentional with her money.
"Perspective is everything when you want to succeed at something," she says. "You learn to be so grateful for what you already do have in your life. And I think through this challenge, next time I buy something, I genuinely feel like there is just going to be such a deep, deep appreciation."
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