In 2016, we set a resolution to have a “thrifty” year. This meant being mindful and intentional about where we spent our money and our time. As we kick off 2017, we’re going to stretch ourselves even further and attempt something big: a year of buying nothing new.
We’re not the first to try this - there have been many others - but it’s still a big challenge for any family to take on. Read on to learn why we’re doing this, how we’re going to make it work, and what the rules (and exceptions) will be for our Nothing New Year of 2017.
Are you in control of your finances?
I mean really in control?
I’d like to think that we’re doing a good job. Since starting to track our spending using Thrifty, we’ve done a much better job of putting our money toward the things that matter most to us. But we’ve still got areas we can improve on.
The average American family spends 3.5% of their income on clothes, to the tune of $1,700 a year. We spent over $3,000 last year.
According to the USDA, our family should only spend $900 a month on food, using a “low-cost” meal plan. Last year, we averaged $1250 per month.
As hard as we work on being thrifty, we still have room for improvement. Just improving in the two categories above could save an extra $5,000 a year. That could be $5000 more to charity or an extra family vacation. It could pay for a fireplace in our living room that would help us have cozier winters (Hygge anyone?).
But most of all, that $5000 was money we didn’t really need to spend. We didn’t need to spend it and those extra purchases didn’t bring joy or meaning to our lives. In the end, that spending was just inefficient and wasteful.
Efficiency is the highest form of beauty
Mr. Money Mustache (article)
In this statement lies the biggest reason behind us trying to buy nothing new in 2017. Our lives and the world around us are better if we aren’t wasteful. By buying nothing new, we’ll spend less (give more) and throw away less (re-use more).
By achieving efficiency, we get sustainability; not just for the environment but for our finances
For every $1,000 we reduce our expenses, we need $25,000 less in our accounts to achieve financial independence.
If you can drop your expenses by $10,000 a year, you can write off a quarter of a million dollars from your target for your financial independence fund. The kicker? You’ll also have an extra $10,000 a year to put toward that goal so you’ll get there even faster.
Sounds great right?
We think a Nothing New Year can help us accomplish all of this. First we have to set some ground rules though.
The basic rule is as simple as it gets: don’t buy any new stuff in 2017
Used, refurbished, reclaimed, are all fair game, but “new” is to be avoided wherever possible.
Food and household consumable items (baking soda & vinegar for cleaning, soap, art supplies, etc.) are allowed new for obvious reasons. That said, we are still trying to minimize consumables in our family in an effort to go zero-waste. We’ve already replaced many of our consumables with reusable items which should help minimize consumable purchases this year
For non-consumables, we do have a few exceptions we’re going to give ourselves of things we know we’ll be buying in the next year. It’s not a long list but these are the items we could think of (after going through last year’s expenses) where buying new is important:
- Socks and shoes
- Photo prints (school pictures and for our road trip map)
- Stainless steel baking sheet (though we’ll look for used options if we can find them)
- Car maintenance parts (we know we need new tires next year)
- Home remodeling (though we’ll try to buy from Habitat for Humanity Restores when possible)
That’s it. Did we miss anything?
And just how are we actually going to make this crazy idea work for a family of five?
We have five general strategies that we’ll use to avoid buying new that apply to every area:
- Wear out - don’t replace items until they no longer perform their function
- Fix - where possible, fix broken/torn items instead of replacing
- Repurpose - is there something else we already have that can fulfill that item’s usage?
- Self-provision - can we make it ourselves from other materials?
- Buy used - if we truly have to purchase something, buy it used; it’ll get a second life instead of ending up in a landfill.
As you’re reading this, I’m sure you’ve been thinking about some category of expenses you think is going to be really hard in this challenge. We’ve identified a few for ourselves and have ideas on how we’re going to tackle them.
Challenging Category 1: Clothing
I already mentioned our “unmentionables” in the exceptions list above.
For clothing we already have, we plan to wear it until it can’t reasonably be used anymore. Neither of us has sewing skills but we’ll be looking at how we can repair rips and tears in clothing so we don’t throw something out when it still has life in it.
Even though shoes are on the list, I’ve got a pair of sandals that I think I can get repaired for cheaper than buying new. I’ve had them for 12 years - let’s see if I can get a dozen more out of them!
I’ve already been buying my jeans from Goodwill for over a year and will expand this to other clothing items. We’ll also look at using ThredUP and other resale stores (online and local) to buy used clothing.
For more details, my wife wrote a great post on how we plan to buy only used clothing next year with a goal of dropping our clothing spending down to just $800.
Challenging Category 2: Gifts
It’s one thing to apply the “buy nothing new” mentality for our own family but when it comes to gifts for others, things can get interesting. Our goal isn’t to scrimp and scrooge - it’s to be giving in a way that doesn’t create unnecessary waste (financial or environmental).
Based on that, our gifts to others this year will be similar to what we have on our kids lists for their occasions: experiences, art supplies, and handmade items.
Challenging Category 3: Entertainment
We’re already pretty frugal when it comes to entertainment. We don’t have cable or paid streaming services and don’t even have antennas hooked up to our TV. We get DVDs for free from the library and stream network shows for free on our laptop when we actually want to watch something.
There’s one item this year I know we’ll be itching to buy: Season 4 of Tiny House Nation.
Our method here is going to be a bit different - maybe even bordering on an exception. We’ll only purchase Tiny House Nation if we can buy it “free” using Google Rewards points from surveys on my phone.
In the 2.5 years I’ve been using this, I’ve earned $66.35 to use in the Google Play store ($26 in 2016). If we can do the same this year it should be enough to cover the purchase, which I’ll count as being within “the rules”
There you have it folks - our plan for how we’ll spend nothing new in 2017. It’s bound to be an interesting year and I’ll be sure to keep you updated here on how we’re doing.
My plan will be to have a Nothing New Year Update as the first post of every month in 2017. At the risk of sharing TMFI (too much financial information), I’ll go through the nitty gritty details of everything we spent.
In addition, with our goal of becoming completely debt-free by 2020, these monthly update posts will include information on our mortgage payoff progress for those interested.
Since we’re at the start, let’s set the baseline on where we’re at with our mortgage (our last remaining debt)
Mortgage Payoff Update
The red line shows our outstanding mortgage principal if we had stuck with our original mortgage back in 2007. The blue line shows our actual mortgage principal to-date (as well as projections based on our current prepayments). The faint lines show all the different mortgage paths we’ve been on based on different refinancing and prepayment strategies.
Based on our aggressive prepayments and taking advantage of refinancing, we’re due to save $161,000 and finish 17 years earlier than our original plan! Right now, we’re coming in a bit after our 2020 goal with an expected payoff date of August 1, 2020. I haven’t built in additional prepayments I think we should be able to make, so hopefully that means we’re going to get there before 2020 still :)
What are your plans for 2017? Do you have any ambitious goals or crazy experiments in mind?
What are your thoughts on the “Nothing New Year”? What challenges do you think we’ll face that we haven’t accounted for?