Taking on new challenges and developing healthy habits can be done anytime. Whether it’s a new year, season, or month, you can improve your finances with a no spend challenge.
Let’s learn how it works and why you should try it out!
What is a no spend challenge?
No spend challenges have become trendy over the past couple of years. If you’ve never heard of a no spend challenge, it refers to a time in which you intentionally choose not to spend any unnecessary money.
During the challenge, you can only spend money on bills and necessities.
Where you can spend
Typical categories where spending is allowed include:
- Rent or mortgage
- Bills (cable, internet, utilities, phone, car, etc.)
- Health expenses (insurance, doctor’s bills)
Where you will need to pause spending
The idea is to only spend money on what you need and to eliminate all spending on non-essentials. Therefore, you say goodbye to spending in categories like these:
- Restaurants and take out
- Coffee and drinks
- Furniture/home decor
- Hairstyling/nail appointments etc
It’s essential to establish in the beginning what’s a need and what is not. For instance, an Uber may be required to get to work if you don’t own a car.
Yes, the challenge sets limitations, but it can also open you to many creative solutions.
One example could be making your favorite coffee drink at home or watching Youtube videos to learn how to style your hair.
Types of no spend challenges
What's convenient about no spend challenges is that you can choose from various types. Whether you choose a long-term or short-term challenge, they only last for a period of time.
It's all about choosing one that makes sense for your lifestyle. Below are some different types of no spend challenges:
No spend days
No spend days are when you select certain days out of a week or month not to spend money. For instance, if you notoriously spend too much the day of or the day after payday, you can choose those days for your no spend days. Or you could so something like no spend Fridays.
No spend week
Could you go for a week with our spending money? A no spend week means that you only spend money on necessities for seven days.
A week with no spending can be helpful when you want to save extra money for a vacation or a new computer.
No spend month
A month-long challenge is when you commit to only the essential expenses for 30 days. Now, this doesn’t mean you can’t have any fun.
There are many different forms of free entertainment, such as free museum days, free park concerts, and that you can do during a no spend month.
No spend year
A no-spend year is one of the more ambitious ways to go about this challenge. Yet, if done correctly, there can be many benefits.
For example, a no-spend year is a great way to help you pay off debts or student loans. It would require a lifestyle change, but you could, after a year, ease discretionary spending back into your budget.
How a no spend challenge can improve your finances
A no spend challenge can save you money by forcing you to refrain from unnecessary spending.
However, the beauty of a no spend challenge is more about what you learn during this time period rather than the money you save.
Here are some financial benefits you’ll reap during a no spend challenge.
1. You'll save more money
It’s a given, of course, but cutting unnecessary spending will inevitably lead to more money in your bank account. Thus being intentionally frugal can be a good thing.
More money means more capital to invest in your new business venture, towards your dream vacation, or into your savings account. Your ability to save more allows you to accelerate achieving your financial goals.
2. You’ll identify your bad habits
When you can’t spend money anymore, you quickly become aware of how you’ve spent money in the past.
For instance, when you can leave the gas station and not buy extra snacks, you’ll notice how much extra cash money you end up with.
Maybe you’ll start to notice that going out for rounds of drinks throughout the week was causing you to drain your bank account. Or perhaps it was buying another winter sweater you don’t need.
Whatever your bad habits are, a no spend challenge will quickly bring them to light. And with this awareness, you'll make better choices and realize how you have wasted money.
3. You will get clear on your goals
As you begin saving more and more money, you’re bound to get excited about your savings goals.
Remember when you wanted to build a 6-month emergency fund? Or what about that credit card you keep meaning to pay down?
A no spend challenge can make these goals seem within reach once you eliminate non-essential spending.
4. You’ll find new ways to fill your time
Spending money takes up a lot of your time. When you’re bored, it’s common to go shopping, rent movies, or order food — even when you aren’t hungry.
When you’re not allowed to spend money, you’ll have more time for other enjoyable activities. Maybe you dig out your old acrylics and start painting. Or perhaps you clean out your closet and find some items to sell.
When your hands aren't attached to your credit card, you can use them to do things that matter most to you.
Steps for a successful no spend challenge
Starting a no spend challenge with a no spend month is a great idea. A month is a fixed time that isn’t too long. As a result, you can focus on achieving as many no spend days as possible.
You can also plan your no spend month alongside your budget. Use it to clarify your monthly expenses and splurges.
Below are some key steps to help you be successful with your no spend challenge.
1. Time it correctly
Choosing the right month for your no spend challenge can help you get off to a good start. If kicking it off in January feels too rushed, look into another month.
Be sure not to choose a month filled with birthdays, anniversaries, major holidays, or other events where you know you’ll spend money. Or, plan to buy gifts in advance to stick to your no-spend schedule.
2. Use a journal to track your urges and emotions
The urge to spend is a behavior that’s hard to unlearn. Behavioral change can be extremely difficult, but it’s not impossible! Every time you feel the urge to spend, write it down in a spending journal.
Explain how you’re feeling and how buying a specific item might make you feel. For instance, you can write down you're feeling sad and that purchasing a new phone case would make you happy.
Instead of spending money, do something that doesn’t involve buying something to make you happy.
With your journal, take time to reflect on what you wrote. You’ll be surprised how much you’ll learn about yourself by reading back entries.
For instance, you might discover that wanting to buy five candles was your way of avoiding anxiety about an important work project.
3. Create plans for your time to stay productive
Many of us spend money when we’re bored or in social situations. You can prevent yourself from falling into these traps by staying productive.
Instead of shopping with friends, arrange a clothing swap where everyone brings to someone's house gently used or brand-new items you wish to exchange.
You can also consider free hobbies such as reading a new book, taking a walk while listening to a podcast, or learning how to meal prep.
Fill your calendar with fun activities that will keep you engaged and not tempt you to spend money.
4. Make spending more difficult
If you often struggle to stay on budget, think about your triggers. Do you often splurge and make credit card purchases you can’t afford? To avoid this, delete any saved credit and debit card information from online stores.
In addition, you can keep your credit cards at a parent’s house or with another friend or family member you trust.
You can also make sure you leave the house without money (or only with cash for specific purchases) to prevent you from accidentally spending.
5. Post about your no spend month online for accountability
Letting others know about your challenge is a great way to stay accountable. Post about it on social media to share your progress with friends, family members, and others who will likely follow your journey.
Better yet, see if any of your friends want to join you on the challenge so you can support each other throughout this no spend month. Taking some free finance courses can also help you engage with others and stay accountable.
6. Keep a visual reminder of your goals and progress
Temptations are all around us. While doing a no spend challenge, you may start thinking about what you’re missing out on. You may wake up with the urge to go to brunch with friends.
Before rationalizing your way into making an unnecessary purchase, set up your environment to support you. You can do this by creating visual reminders of why you’re doing the challenge.
Making a vision board of all the places you want to travel to after the challenge can inspire you. Another motivator can be keeping a cash jar and collecting all the money you save from the challenge.
Constantly reminding yourself of why you’re not spending and acknowledging your accomplishments makes the process more enjoyable and easier to complete.
7. If you accidentally slip up, don’t let yourself off the hook
If this is your first time doing a no spend challenge, you will slip up occasionally. Shopping is simply a part of the culture. In fact, in times of high inflation, stats have shown that shoppers continue to spend money.
Admit your mistake. Write it down in your journal, confess it to your spouse or friends, and move on. Don’t give in to the temptation to give up because of one slip.
In today’s climate, mistakes will happen. So, if you accidentally buy a drink at a work happy hour, don’t give up.
Instead, note the amount, stick to your original plan, and keep going!
8. Set a reasonable reward for yourself upon completion
Another way to motivate yourself during your no spend month challenge is to set a reasonable reward to celebrate your accomplishment. To do this, think about something you spend money on that means the most to you.
Maybe it’s a night out with your significant other or friends. Perhaps it’s a coffee date with your mom. Or maybe there’s a new book or blouse you’ve been eyeing.
This reward should be sensible but also meaningful. It’s all about having guilt-free fun money!
Achieve your financial goals with a no spend challenge!
Completing a no spend month is a great way to kick off a new year, season, or month to set yourself up for financial success.
To make your no spend challenge as easy as possible, plan, think of ways to avoid your spending triggers, and share the good news with family and friends so you can stick to healthy spending habits.
And if you like doing challenges to help you with your finances, you’ll want to try savings challenges, along with a no spend challenge! Regardless of what you choose, a 30-day money challenge can help you improve your life and money!
Insights, advice, suggestions, feedback and comments from experts
No Spend Challenge: How It Works and Why You Should Try It
A no spend challenge refers to a period of time during which you intentionally choose not to spend any unnecessary money. The challenge typically allows spending only on bills and necessities []. It has gained popularity in recent years as a way to improve finances and develop healthy spending habits [].
During a no spend challenge, there are certain categories where spending is allowed, including rent or mortgage, bills (such as cable, internet, utilities, phone, and car), groceries, health expenses (insurance and doctor's bills), and gas []. However, spending on non-essentials is eliminated. This means saying goodbye to spending in categories like restaurants and takeout, coffee and drinks, furniture and home decor, clothes, gifts, Ubers/Lyfts, hairstyling/nail appointments, and more [].
There are different types of no spend challenges that you can choose from based on your lifestyle and goals. These include:
- No spend days: Select certain days out of a week or month not to spend money. For example, you can choose the day of or the day after payday as your no spend days [].
- No spend week: Challenge yourself to go for a week without spending money, except on necessities [].
- No spend month: Commit to only essential expenses for 30 days. This doesn't mean you can't have any fun, as there are many free entertainment options available [].
- No spend year: This is a more ambitious challenge that can help you pay off debts or student loans. It requires a lifestyle change, but it can have significant benefits [].
A no spend challenge can improve your finances in several ways:
- Saving more money: By cutting unnecessary spending, you will have more money in your bank account. This allows you to invest in your business, save for a vacation, or build up your savings [].
- Identifying bad habits: When you can't spend money, you become aware of how you've spent money in the past. This helps you identify and break bad spending habits, such as impulse purchases or unnecessary expenses [].
- Getting clear on your goals: As you save more money, you'll become more focused on your financial goals. Whether it's building an emergency fund or paying down debt, a no spend challenge can help you prioritize and achieve these goals [].
- Finding new ways to fill your time: Without the option to spend money, you'll have more time for other activities. This can lead to discovering new hobbies, pursuing creative projects, or engaging in activities that bring you joy without the need for spending [].
To have a successful no spend challenge, consider the following steps:
- Time it correctly: Choose a month that doesn't have major events or occasions where you know you'll need to spend money. Avoid months filled with birthdays, anniversaries, or holidays. Alternatively, plan ahead and buy gifts in advance to stick to your no-spend schedule [].
- Use a journal to track urges and emotions: Keep a spending journal to record your urges to spend and how you're feeling. This helps you become more aware of your spending triggers and emotions associated with spending. Instead of spending money, find alternative ways to address those emotions [].
- Create plans for your time: Stay productive and avoid spending by filling your time with activities that don't involve shopping or spending money. Arrange clothing swaps, read books, take walks, or learn new skills. By staying engaged, you'll be less tempted to spend [].
- Make spending more difficult: Remove saved credit and debit card information from online stores to avoid impulsive purchases. Keep your credit cards away from easy access, such as at a trusted friend or family member's house. Consider leaving the house without money or carrying only cash for specific purchases [].
- Post about your challenge online for accountability: Share your no spend challenge on social media to stay accountable. Let your friends and family know about your goals and progress. You can also invite others to join you on the challenge for mutual support [].
- Keep a visual reminder of your goals and progress: Set up visual reminders of why you're doing the challenge. Create a vision board of your savings goals or keep a cash jar to collect the money you save. These reminders will motivate you and make the process more enjoyable [].
- Don't let slip-ups discourage you: It's normal to slip up occasionally, especially if it's your first time doing a no spend challenge. Admit your mistake, learn from it, and continue with the challenge. Don't give up just because of one slip-up [].
- Reward yourself upon completion: Set a reasonable reward for yourself upon completing the challenge. It could be a night out, a coffee date, or something you've been wanting to buy. This reward should be meaningful and guilt-free, allowing you to celebrate your accomplishment [].
Completing a no spend challenge, whether it's for a month, a week, or even a year, can help you improve your financial habits and achieve your goals. It's a great way to kickstart your journey towards financial success [].