The Challenge Everything Budget

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Readers of personal finance blogs might be hearing about a new way of budgeting and saving money. It’s called the Challenge Everything budget. One of the pioneers of the Challenge Everything budget, Jay Money of Budgets Are Sexy, explains it like this:

“It’s my new mentality of challenging the ‘norm’ and getting my expenses as low as possible without sacrificing quality of life.”

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How to Challenge Everything

The point of the Challenge Everything budget is to take your existing budget, and challenge each expense, line by line. For instance, start by taking your car insurance payment, whether it be a monthly payment or an annual payment, and look for ways to get lower rates. Those lower rates might come by raising deductibles, decreasing coverage, or by switching to a different insurance company altogether. The goal is to get the expense as low as possible while still making sure your car insurance plan continues to protect you and those around you as you drive.

Next, you’ll move on to your grocery budget. Start researching and reading articles on how to save money on groceries. Then implement a meal plan and a spending budget that will allow you to cut your grocery bill and yet live on more than Ramen noodles every day. The goal, as J$ said, is to get the expense as low as possible without sacrificing (too much, anyway) quality of life.

The Benefits of the Challenge Everything Budget

The road to financial freedom requires a number of steps in most cases. Because lottery winnings or windfall inheritances are not likely for most wanting to attain wealth, you’ll have to follow certain steps in order to achieve financial independence. The first step is to eliminate debt. Interest paid on loans, credit cards and mortgages is interest that’s taken out of your pocket each and every month. Make a plan to pay off that debt and keep more money in your pocket.

What Can You NOT Spend?

Step two is to reduce expenses, and the Challenge Everything budget helps you do that, because it forces you to take a good, long look at each monthly expense, and determine whether or not that expense is of value to you and is in line with your goal to build wealth. The less in expenditures you have each and every month, the less money you’ll need each month in order to become financially independent. This is the beauty and strength behind the Challenge Everything budget. By confronting each and every expense you have, and looking for ways to eliminate or reduce that expense if it’s not bringing true value to your life, you free up more cash to put toward wealth building and financial independence goals, and you decrease the amount of money you’ll need each month to live on. By reducing monthly expenses, you have more money available to put toward step three of becoming financially independent: building wealth.

Try it and See!

If you haven’t already, I encourage you to try working the Challenge Everything budget into your life. You’ll likely be surprised at the amount of monthly savings you can amass, and surprised at how well you can live on so much less money than you thought you could. And by taking that monthly savings you’ve discovered, and putting it toward your wealth-building goals, you’ll reach those goals much faster than you’d imagined.

Have you heard of or tried the Challenge Everything budget?Β  What line items in your budget have you considered eliminating but haven’t taken the steps to do so yet?

18 COMMENTS

18 responses to “The Challenge Everything Budget”

  1. Maria at Pocket of Money says:

    That’s cool. I usually do my budget this way and call it, “how low can I go”. I didn’t know it had an actual name. This is a great post.

  2. Deacon Hayes says:

    When we were paying off our consumer debt, this was a huge part of the process. We cut our cable, I cancelled my gym membership, and I went through every line of our budget to make each category smaller. This simple task alone saved us hundreds of dollars per month!

    • Laurie @thefrugalfarmer says:

      It really adds up, doesn’t it? We did this with one category last year, our car insurance, and saved over $750 a year just in that one area!

  3. I like it! That is basically what we did when we started using a zero-sum budget. Some things went (cable TV, car payments). Other things stayed (food). It’s all about being mindful with the dollars we earn!

  4. Janeen says:

    I love this. We naturally review our budget line-by-line a couple of times each year and then adjust. But, we don’t usually look at each allotment and ask ourselves how we can limbo πŸ˜‰ I’m totally trying this for our next budget meeting.

  5. Petrish @ Debt Free Martini says:

    I have to admit that I absolutely hate sticking to a budget. You would think after a year of following a budget I would love it by now, but I don’t. I do it because I refuse to live below my means. I take care of all my bills the day my check hits my account and spread out the cash towards what is needed for the duration of time before my next paycheck. It’s not fancy, but it works for me.

    • Laurie @thefrugalfarmer says:

      Petrish, it’s working, and that’s what counts. Your commitment to live below your means and do what you can to pay off debt is the important part.

  6. Lauren says:

    I love this. It’s pretty much what my husband and I do every few months – going through the budget and seeing where we can reduce our spending. We’re saving for a home down payment, so every dollar counts!

    • Laurie @thefrugalfarmer says:

      “Every dollar counts”. People often fail at financial goals and dreams because they don’t understand that one important fact, Lauren. You and your husband are achieving yours because you understand that vital truth. Way to go!

  7. Joseph Hogue says:

    I agree! When you budget and write down expenses, you see plainly where your money goes. Then you can find out which expenses are unnecessary and cut them out, and which ones you can look to reduce. We’ve saved a lot of money this way!

    • Laurie @thefrugalfarmer says:

      It works, doesn’t it, Joseph!! It doesn’t feel like you’re saving much at the time, but all of those dimes, nickels, and dollars add up.

  8. Laura says:

    that’s such a great idea. I just wrote a post on my financial blog about budgeting, but this post is exactly what I needed to hear. So, thanks for that! We will have to do this challenge everything budget now that we’ve gone from two incomes and one baby to one income and two babies! But it feels much more intentional to give it a name. Less like “victims of our circumstances”, which we are not.

  9. Lidia says:

    I love Maria’s, “How low can I go”, idea. I hate budgeting as much as I hate dieting. Both make me feel deprived and the first thing I want is a “cheat meal” or splurge.
    So, I tried looking at my expenses and trimming the excess. That has worked a lot better! Using that approach, I cancelled my cable TV that I was paying $200/month for and lowered my bill to $47/month for high-speed internet and Netflix. I’m in the process of doing it in other areas as well.

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