Challenge 1 - No Spend year

I am not good with money. When I was a kid as soon as I'd get money for something I'd be on my bike heading to the store to buy candy or a magazine. When I was a teen working my first jobs I would get my paycheck and head straight to the book store or ebay to blow it all. Regardless of how much money I've made throughout my life I've embraced the phrase lifestyle creep and kept myself close to paycheck to paycheck living with the main goal to just keep my income rising faster than my spending.

This worked for 20 odd years until it didn't. A combination of a number of large unavoidable expenses over a year or two and not reducing spending combined with slowing income growth has put me behind now with a fairly significant debt. I started working on it earlier this year including a no spend month but my progress has started to backslide so it's time to make it official and longer.

A no spend week, month, year or what have you despite the name doesn't actually involve zero spending. There are still things I need to pay for(food, utilities, etc!) and some stuff I'm choosing to pay for but the point is to dramatically reduce my spending and help pay off my debt faster. Some of my rules will play into other challenges too so it's a bit of a combined effort.

Still allowed

Certain things I'm still allowed to spend money on though I will work on reducing the how much.

1. Groceries - I've been working on my grocery bill for a while. Through meal planning and bulk shopping I've cut my bill down quite a bit but for this year I'm going to set a cap of $500 per month on groceries with a mini-challenge to see what the lowest month I can get is.
2. Cleaning supplies - As needed
3. Utilities - Electric, Gas, and water. I'm in a rental so I cannot modify my house to make it better insulated for example so there is little I can do to cut my costs in these areas. I am having a smart meter installed though so maybe I'll find ways.
4. Gifts - I don't buy gifts for many people so this is not a big line item so I'm going to maintain my current budget of $150/month into a gift fund. This will cover birthday/Christmas/Easter for my child and birthdays for a couple other people I buy for.
5. Sports/Fitness - I play hockey and do powerlifting so I have expenses related to these that will continue and some that will stop. For continuing expenses I have the various membership fees I need to pay, gym fees and coaching fees. These will all stay. I won't buy any fitness equipment this year though and I won't buy any hockey equipment except to replace something that has broken in an unrepairable way.
6. Parenting costs - Kids can be expensive and between various appointments, clubs, activities and such it adds up. I will be working on finding more free activities for us to do but I won't be changing much here since I consider almost all of it money well spent. I also won't be tracking this category for the challenge since it involves someone elses information.
7. Filament/hardware - I'm currently working on some rather large 3d prints so I will allow myself to continue to buy filament to complete them as well as wood/metal as needed for displaying them. No more than $200 a month and most all of this will be front loaded as I finish 2 big prints.
8. Social/Networking events - I only moved to my city 2 years ago so I do not have a built in social network. I'll allow myself to pay entrance/event fees for any social or networking events as needed for my socialising challenge.

Not Allowed

1. Books - I buy a lot of books. I buy paper books and e-books and audiobooks. I'll see a book about a topic and grab 2-3 additional recommendations at the same time, etc,etc. I spend literally hundreds on books every month. I have a backlog of books to read at the moment so for the next year I will not buy a single book in any format. For replacing audiobooks which I currently listen to while doing housework/chores I'm currently trying to get into podcasts.
2. Household items - I have a budget category called "Household improvements" which is basically stand in for misc items I use around the house and it's typically $200-400 a month. Things like extra lamps or something new for the kitchen or a new small piece of furniture. This will be zero going forward.
3. Entertainment subscriptions - No streaming, no playstation network, etc.
4. Clothes - I have enough clothes to cover all my needs for the next year so no spending on clothes.
5. Alcohol - I have a no drinking challenge coming up so these two work together

Exception list

There are a few things that would normally go into one of the Not Allowed categories that I know I'll need this year. I've listed those here.

1. A new couch - My current couch is falling apart. Between a 40kg dog and a young child there is more duct tape in it than a Red Green special. I plan to get a replacement this year but I'll be buying something used off marketplace and not new
2. Running/Walking shoes - Between my treadmill desk, walking pad, hiking and dog walks I put a lot of kilometres on my shoes. I'll allow myself to replace pairs as they wear out for health/safety purposes. I've recently bought a new pair of indoor shoes so those should last me half a year, I still need to purchase new hiking boots as my current pair is worn down enough to start being unsafe.
3. Shipping for a painting - I recently bought a painting from a friend in Canada and I still need to pay to get it shipped to me in Australia
4. Good things - I will be buying a ticket to Good Things festival and a night in a hotel in Sydney to go to it.
5. Apple music - I have the student plan it's $8/month and I listen to it all day

Increasing Income

I want to increase my net income by $500 per month and to grow that goal by $100 each month of the year so that in 12 months time my income should be $1700 per month higher than it is today. This will be accomplished through a combination of selling off things I no longer use, side project revenue, consulting revenue and increases in my salary.

And I think that covers everything. I've somewhat regularly tracked my spending in YNAB over the past few years though I've cancelled my subscription to it recently so I'll be exporting my numbers from that as a baseline to compare to in my updates but my hope is to decrease my spending by 15-20% per month vs my average from a year ago.

The actual budget

Note this does not include all my spending. There are some categories that I've kept hidden for privacy reasons but none of them are entertainment related and all are essential. I've also left out rent since it's static monthly and I have a lease agreement until the challenge ends. This is the areas I will be tracking though for the challenge as mentioned above.

For alcohol I was actually not drinking for most of last year as part of another challenge. The $500 is a rough average over the past couple years when I have been drinking and includes alcohol and the cost of a night or two out per month.

So hopefully I'll be saving between $2000-3000 per month vs what I have been spending on average over the past few years.

The debt

I currently have around $80,000 in debt mixed between personal and business debt(that I am personally responsible for). The make up is mostly in a 5 year loan and a 3 year loan and the rest is split between two credit cards. The goal is to pay off the credit cards first which are the highest interest then start attacking the 5 year loan which has higher interest than the 3 year one.