Michelle McGagh bought nothing for a year and saved $37,100

A British woman has detailed how she spent an entire year buying nothing but the bare necessities and saved £22,493 ($37,100) in the process.

Londoner Michelle McGagh spent 10 years working as a personal finance journalist, but despite that, rarely paid close attention to her own spending.

Want to save thousands? Londoner Michelle McGagh spent almost nothing in 2016, saved $37,100 and gained a new lease on life.

Writing in London's The Daily Telegraph she explains that taking out a hefty mortgage in 2013 led to some belt tightening and an extended period of living without most of her possessions while she and her husband renovated.

That led McGagh to re-evaluate her relationship with money and consumerism. Inspired by Buy Nothing Day, she pledged not to spend anything for a year.

"Although I had no debt, my bank statements (when I bothered to look at them) were littered with unnecessary spending. When I did brace myself and look at my statements I was aghast at how much of my wages I frittered away mindlessly", including £400 ($660) on takeaway coffee, she writes in the Telegraph.

"It sounds extreme, but I'd set myself budgets and spending plans in the past and they'd always fallen by the wayside on my next night out.

"A full year of no spending seemed the only way of resetting my relationship with money completely."

McGagh set herself rules: she'd pay her mortgage, utilities, life insurance, charity donations, and broadband and mobile bills, which totalled £1,896.76 ($3130) a month, and would buy basic toiletries (toothpaste, deodorant, soap and shampoo), and washing powder.

Michelle McGagh with the round of drinks she bought at the end of her no-spend year.  Photo: Twitter: @mmcgagh

Michelle McGagh with the round of drinks she bought at the end of her no-spend year. Photo: Twitter: @mmcgagh

For food, she and her husband set a combined weekly grocery budget of £35 ($60), and she set herself a zero budget for transport, meaning she'd have to cycle everywhere.

"There was no budget for luxuries – that meant no cinema trips, no nights in the pub, no takeaways or restaurant meals, no new clothes, no holidays, no gym memberships, not even a KitKat or cheeky cheesecake from the supermarket," she writes.

Tip for saving stale bread. Run the stale bits under water, put in the over on warm heat for about 5 mins. Et voila!

McGagh started her year of extreme frugality on November 26, 2015. She says the first months were the hardest, when the cold winter sent her friends to the warmth and comfort of London's pubs.

But as the season changed to spring, she "got her social life back", spending time in parks, museums and going on a cycling holiday.

After a year of minimalist living, her clothes ragged, McGagh made her first purchase at the stroke of midnight on November 26 last year: a round of drinks for "my friends and family who had supported me through the year."

"That evening I totted up what I'd spent that year, compared to the previous one, and the result was extraordinary: I'd spent £22,493 ($37,100) less," she writes.

McGagh said she would use the money saved to pay off a chunk of her mortgage.

"After a year of no spending I realised that I valued financial security over material possessions: I don't want to be forced to stay on the treadmill of work just to pay off a home loan for the next two decades or accumulate more stuff," she writes.

"I also came to understand that I don't need things to make me happy."

McGagh is set for an additional cash injection when a book she wrote about her experience goes on sale this week.