A 30-day challenge: Don't spend

Cut all luxuries

The second approach to the 30-day spending fast is to forgo the set-dollar-amount budget and simply cut out all luxuries. In this case, money can be spent only on necessities.

That is how Shannon S. structured her month. "The only things we were allowed to spend on were milk and eggs from a local farmer every week, rent, utilities, gas and anything (needed for) an emergency," she says. "There was to be no other spending. We did not do any shopping -- grocery, merchandise or otherwise."

Weston and her family bought only necessities in January 2006. "It showed me there were things I was spending money on that I didn't need to."

For instance, previously, if she had 15 minutes between meetings, she would fill the time by buying a cup of coffee. And though she rarely bought new clothes for herself, Weston didn't think twice about outfitting her toddler daughter with new duds. "It surprised me how much of my spending was automatic."

The key to making the second option effective is to dig deep to determine what is a luxury and what is truly a necessity, says Harrine Freeman, the author of "How to Get Out of Debt: Get an 'A' Credit Rating for Free."

This will vary from family to family, but, in general, recurring bills, gas and groceries would be considered necessities, while lattes, restaurant meals and new shoes would definitely be off-limits. (See the slide show "What's a luxury? What's a necessity?")

Combine saving and earning

The third option is to combine a 30-day spending diet with an effort to boost your income. That can be as simple as cleaning out your attic or basement and selling everything on eBay or Craigslist, Freeman says. "You can use what you save and what you earn to pay down debt or create an emergency fund."

No matter which route you choose, a month of minimal spending can lead to a real, workable and long-term household budget and spur you to permanently cut the fat from your spending.

A 30-day spending diet can be a valuable precursor to a budget you might actually stick to because "at the end of the month, there is a very real, tangible financial benefit. You can actually see how much you saved," says Brad Stroh, a co-founder of the Financial Freedom Network and Bills.com. "It gives you a sense of empowerment and control over your money that can lure you into the game."

Video: Expenses NOT to trim

Harkins says not spending is like "fasting before you go on a diet. It forces you to think about every transaction."

"It helped us to know what we were spending in different categories and how to better organize our budget," Shannon S. says. And the savings didn't stop when the month was over. "We are saving money by learning to live without more and more every day."

Taking time off from shopping "has the paradoxical effect of reminding you of the plentitude of your life and how much you already have," says Judith Levine, the author of "Not Buying It: My Year Without Shopping."

"You learn what you can live without," Levine says.

Levine cut out luxuries and bought only necessities for an entire year. As a result, she paid off $8,000 in credit card debt.

"There are so many unknowns in this economy; why wouldn't you be trying to save more money and cut back?" says Lynnette Khalfani, the author of "Zero Debt: The Ultimate Guide to Financial Freedom."

These days, it's a mistake not to prepare. "Don't believe for a minute that whatever your situation, however tidy it may seem, that it can't go awry," Khalfani says.

You may not slim down the cable TV package if you are scrimping for only 30 days, but "at some point you have to ask, 'How important is my family's security versus 80 gazillion channels?'" Weston says. "Ask yourself, 'If I lose my job tomorrow, what would I cut?' and do it now instead.

"You'd be amazed how little (money) people can live on once they realize anything goes," she says. "It's not that we can't cut; it's that we won't. But these are scary times. You need to focus on your own balance sheet, and it will make you feel better to have money stashed away."

Superslim budgets with no room for fun, though, are doomed to fail, Khalfani says. The goal is not to cut out all sources of joy in your life, it's to "spend only on those things and experiences that are going to really improve your life, that you use and enjoy a lot, and that will give you a great lift and not just a momentary lift," Levine says.

The one thing you shouldn't cut is a contribution to your retirement account because you will lose your own long-term gains, Weston says. If invested wisely, budget cuts can literally pay dividends.

This article was reported by Denise Trowbridge for Bankrate.com.

Updated Oct. 2, 2009

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