When most people hear about a no-spend challenge, they immediately think that no spending is occurring for an entire month. And if you’re like me, the thoughts start to spiral… I don’t have enough food to get through a month… what about the bills? But the truth is that completing a no-spend challenge does not mean you freeze all your spending; it is a simple and effective way to help you see your spending habits and help you save money.
Note: This is a reformatted version of a previous post. Please READ THIS if you’d like more information.
What Is A No-Spend Challenge?
A no-spend challenge is a simple strategy used where individuals commit to not spending money on non-essentials for a set period, usually a month.
While most people do a no-spend challenge to help them save money throughout a month, the challenge can be insightful to your current spending habits. It can also help you learn about your spending habits that are not helping you reach your financial goals, and become more aware of your overall financial decisions.
How Do I Start A No-Spend Challenge
While starting a no-spend challenge can seem daunting, when the proper groundwork is laid out, the challenge will go much smoother for you, and you will be setting yourself up for success in the end!
Step 1: Determine Your Essential and Non-Essential Expenses.
- Essential expenses are considered necessary for basic living and well-being. These are non-negotiable expenses and need to be prioritized within your budget. Categories you will want to include in your essential expenses are:
- Housing Costs (rent, mortgage, home insurance, property taxes)
- Utilities (electricity, water, heating, internet, phone)
- Groceries (the basics needed to get by for the month)
- Transportation Costs (fuel, car maintenance, car insurance, parking fees, public transportation fares
- Pet Care (food and medication needed for the month)
- Savings & Sinking Fund (helps you keep on track to meet your savings goals)
- Medical Expenses (any prescription medications and necessary healthcare copays or bills)
- Non-essential expenses are not necessary for living and well-being. These expenses can be reduced or eliminated, without impacting your quality of life.
- Dining Out
- Entertainment
- Shopping
- Hobbies
- Convenience purchases
- Impulse Buys
- Gifts & Celebrations
Step 2: Set Clear Rules.
Setting clear rules and boundaries around your non-essential expenses will help you be successful while completing the challenge.
For example, eating out can consume a large portion of your budget if you are not being mindful of how much you are actually spending. With the mindset of $5 here, and $15 there, it ends up being a lot of money.
When you set up your no-spend challenge rules, start with your spending habits in mind.
If you don’t go to the movies every weekend, then that isn’t going to be an effective rule to set. But if you and your partner do date nights every Friday, finding ways to make them more cost-effective, while still having fun would be a realistic goal for a no-spend challenge.
Find movies at your local library that you’ve wanted to see, or utilize your streaming services to see a movie you haven’t watched. Make dinner at home as part of your weekly meal plan, and prepare popcorn for the evening.
Some additional examples of rules to set include not buying coffee or convenience snacks, no purchasing alcohol for the month, cooking all your meals at home, avoiding online shopping, and not purchasing clothing or accessories for a month.
Step 3: Plan Ahead.
This is where most of the prep work comes into play with a no-spend challenge.
As I mentioned before, if you have a tradition of having a movie or date night every Friday night, rather than going to the theaters and watching something, have a movie night at home! Use a free DVD rental from your local library, or watch a movie on a streaming service you have access to. Make popcorn at home, and have a snack platter.
Or you can create a meal plan with a meal you usually order out, and learn how to make it at home. Learn about free activities that are local to you. Hike a local trail, or visit a local location you’ve had on your list for a while.
There are so many ways to be creative, and make memories, all while conquering your no-spend challenge, and helping you remain within your budget.
The biggest hurdle will be for you to overcome ways that you would naturally spend money. If you have to stop at the pharmacy to pick up a prescription, don’t leave with something else “just because”. Get your prescription, and then leave.
If you know that you need to pick up a prescription and cat food, then get those two things at the same place, rather than making an extra stop. Would you spend more on cat food at the pharmacy than you would have somewhere else? Absolutely! But you will also spend a lot less than getting the prescription and a few unnecessary items at the pharmacy and repeating the process when you pick up the cat food.
Some other tips to help you plan can include:
- Meal planning for the month to avoid last-minute takeout
- Grocery shopping for essentials only (meat, fruit, veg, dairy, and shop from your pantry!)
- Avoiding stores or websites that tempt you to spend
- Unsubscribing and unfollowing brands and their sales promotions. The sale will come back.
Step 5: Track Your Progress and Your Spending
Tracking your progress throughout the month helps you keep a close eye on your spending, and ensures that you are within the guidelines you set for yourself.
You can use an app, a spreadsheet, a calendar, or my free no-spend tracker to help monitor your progress and motivate you to continue on your journey.
For tracking your progress throughout the month, there is no wrong way to do it. You want to make sure that it is something you are going to see every day, as it helps to motivate you to continue towards the end goal.
Step 6: Reflect On Your Experience
At the end of the no-spend month, take the time to reflect on your experience. This can include:
- Reviewing your spending patterns; as well as which ones were harder to break versus easier to manage
- Calculating how much you saved
- Identifying opportunities to save more in a future no-spend challenge
- Any over-arching lessons you learned from this experience that can help your long-term financial goals
Remember that the goal of a no-spend challenge is what you make of it, but any progress you can make towards spending less and saving more is a win.
Have you completed a no-spend challenge? What is one rule you always have? Let me know in the comments below!
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