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In this guide, I’ll show you why you must start following the no-spend challenge and how following a few no-spend months a year can improve your financial life and op living paycheck to paycheck.
I’ll also give you strategic tips and rules that you ought to follow while doing the no-spend challenge. Right off the bat, I’m telling you, if you start following no-spend months and learn to live a life where you spend less, it will be the best decision you’ve ever made.
There’s a lot of things I’m going to talk about in this article so hang in there and let’s start making our life better, one less expense at a time!
What is a No Spend Challenge?
A No-Spend Month or a No-Spend Challenge is a period where you try to not spend any money on your wants. You can spend money based on your budget list but anything else (i.e wants) must be avoided.
Do you know what you do in a no-spend challenge – you do NOT SPEND! No spending means you keep your money where it should be i.e in your bank account or investments.
According to Shift processing, 80% of People living in America have a total of $14 Trillion in debt, a mortgage being the biggest debt of all. That’s not the worst part, the worst part is that only 1 in 3 Americans have a written budget.
So if you’re struggling to learn how to save money, a no-spend month can be a great way to do so.
In Jen Smith’s book, The No Spend Challenge Guide, she explains how you can use the no-spend challenge to reach your financial goals. She goes a lot more in detail about budgeting and living a financially independent life, if you’re interested to read her book, here’s the Amazon link.
Why you should try a No Spend Challenge
No Spend Challenge can end your Bad Habits
A No Spend Challenge will surely help you get rid of your bad spending habits. You’re probably spending money on anything you see as exciting. Doing this new routine will challenge you to think 10 times and control your urges to spend on something irrelevant.
By constantly saying No to things, you’re training your mind to understand the difference between needs and wants. Repeat this process a couple of times and I’m certain that every time you see a new clothing line, you won’t be easily tempted to splurge your hard-earned cash.
Once the challenge is over, don’t forget to treat yourself (but don’t go bonkers!).
The Challenge will Speed Up your Financial Goals
The most important reason why I feel everyone should start the challenge is to achieve their financial goals. With the excess money you save during your no-save periods, you can reinvest to get your financial goals.
No Spend Months can help you Declutter
During the challenge, your goal is to reduce buying things and using the things you already have. This will help you declutter, use the clothes you rarely use and not waste things. During this challenge, you will learn to value things you already have.
The Two Types Of No Spend Challenges
So there are two types of no-spend challenges to choose from. I’ll help you decide which challenge makes sense and then get started on that right away.
Specific Spending Constraint
If you’re the type of person who doesn’t get tempted by most of the purchasable things you see every day, you can start the specific spending constraint. I follow this type because I have overcome impulsive buying habits and I don’t buy things easily.
Clothes, watches, shoes don’t fascinate me that much. I like them but not enough to buy them on impulse. On the other hand, I can’t stop spending money on food and travel, these two categories are where I need to work on.
Note: This doesn’t mean you save money in these two categories and spend lavishly on the things you don’t normally spend!
Full Spending Constraint
If you’re the type of person who spends on almost anything that shines in your eyes or if you have bad spending habits, you’ve got to follow the full spending constraint.
Following this type will be slightly tough at first but don’t give up, read some motivational money quotes; in a few months, you’ll be this transformed person who’s a Money-Saving-God!
If you’re in this type, don’t feel defeated, most of my friends fall in this category. Luckily my parents taught me the value of money early on in life that’s why I spend less and save more.
How a No-Spend Challenge Works
A no-spend challenge is when you don’t spend money for a specific period and set some spending rules. Not using your credit/debit cards is one of the rules. But it all boils down to spending money only on essentials (needs) and not spending a single penny on wants and desires.
Don’t confuse it with no spending at all, you are spending money but only on needs.
To have a successful no-spend challenge you need to make a plan of action. Make a plan and stick to it. Create a budget using an easy-to-use budget planner.
Once you write down your expenses, scrap out ALL the wants then try minimizing some needs (if possible). Once you do that start saving money and spend as little as you can (only needs, no wants)
Few things you can spend on:
- Other essential items
Things to avoid during the challenge:
- Fun activities
- Other non-essentials
How to Prepare for a No Spend Challenge?
Mentally preparing yourself before starting your no-spend challenge is essential. Don’t recommend starting your no spend time without planning.
Don’t Feel Guilty
Feeling guilty is a common thing today. I feel guilty for so many things I’ve done both personally and financially. That doesn’t mean I pull myself down, it simply means that you have to do something, you have to! Feeling guilty won’t do you any good.
For example, your close friends want to meet up in a cafe during your no-spend period, what do you do? You go for that meet, try spending wisely and carry forward your no-spend period by a day.
Again, this process isn’t about strict rules that you HAVE TO FOLLOW, it’s simply to teach you the value of money so that you SPEND WISELY!
Plan for Pre-Planned Events
Make sure you have money set aside in your emergency fund at all times. I always recommend saving a little extra in your emergency fund just in case. Your primary goal is to not spend but if you’re stuck in a problem where the only choice is to spend, an emergency fund comes in handy.
Talk to your Family
You need to discuss it with your family and only once they understand what you’re up to, move ahead. You may be the sole earner of the family but because of your actions, your family might face problems.
So it’s best to discuss and get everyone on the same page. They may also support and motivate you when you’re on the verge of giving up the challenge.
Start a Side Hustle
How is starting a side hustle going to help you in this no-spend challenge? Let me explain, so you’re not spending money, right? Naturally, you’ll have extra time (that you usually spend on your wants), extra energy (you’ll be bored) and extra money.
Instead of slouching like a lazy animal, why don’t you start a part-time business? It will take time to bootstrap your business to make profits but Hey, slow growth is better than no growth.
Start thinking of simple problems in your daily life, try formulating a business around it and don’t give up. Well if starting a business is hard for you, freelancing is the way to go.
Plan your Meals
Making a meal plan can save you a lot of money. During no-spend challenges, I highly recommend you start meal planning. It’s a great way to cut costs by buying only the things you need for that meal.
But let’s be honest, meal planning takes time and if you plan to start a side hustle (you must start a side hustle!), you may not have time to devote towards meal planning.
That’s exactly why over 35,000 families have tried the $5 Meal Plans Service. For only $5 a month, you’ll get a grocery list and a delicious meal plan sent to you every week so that you can cook the tastiest of meals while working on your side hustle.
Here’s the best part, you get a two weeks free trial (limited time offer).
P.S. Each meal in the $5 meal plan is less than $2, if you’re looking for ways to cut expenses, this $5 investment per month may turn out to be a good investment.
Allocate the Un-Spent Money Smartly
You are going to save a lot of money so you need to allocate this money smartly before the challenge gets over and you go back to your impulsive buying habits.
Unsubscribe from all Promoting Emails
So figure out a few investment opportunities that you can pour your money into. Create an emergency fund, an insurance policy (life and health) for your entire family, pay off debt (use debt snowball method), pay for your child’s education, etc.
It is so easy to shop online, with just a few clicks and you just purchased a product. Technology has improved for the best but our spending habits don’t seem to improve. The best way to improve ourselves is by unsubscribing from all promotional emails. You could always subscribe to them again!
Rules to Follow during Your No-Spend Challenges
1. Have a Time Frame
Allot a specific time duration for your challenges like one day no spend challenge or one week or one month.
The choice is yours but always has a time frame. This sets your objectives clear and an endpoint. It’s much easier to be consistent and continue on your journey if you know the endpoint is near.
2. Set Guidelines (If this then that)
Set boundaries that you need to follow. It could mean that you limit your shopping days to one day only during the challenge. Create a few ‘If This Then That’ scenarios. If your tire punctures then what will you do?
If you need to pay for electricity bills (but you didn’t budget for it) then what will you do? Creating such situations beforehand will not waste your time thinking.
3. Don’t give up happiness
You’re on a strict spending diet but that doesn’t mean you avoid all sorts of entertainment. Use Google to find out free events happening in your neighborhood or go spend time in a park, hit the mountains, or attend free webinars. You have to learn to spend less cash and enjoy it as if you were burning cash.
No Spend Challenges can Stop Impulsive Buying
Have you ever been to a grocery store and spent more than you expected to spend? I was a usual victim to the grocery trap, I get tempted easily and food is my weak spot soo…I used to overspend all the time on food.
To tackle this problem, first, find out your temptations, then google up how to avoid those temptations and follow the tips given.
Well, if you’re like me (blinded by grocery loves), read my article on the 29 Best Grocery Saving Hacks (These Work!)
Here’s a quick tip if you don’t have time to read the above article: Do Grocery Shopping Online.
Shopping online is a great advantage, simply type the things you need in the search bar, find the brand you usually buy, add it to your cart, and checkout. It’s fast, saves time and money.
Also, think about your purchase before purchasing it. I’ve noticed that when I think twice before purchasing something or I give myself some time to think before I buy, 80% of the time I don’t purchase it.
No-Spend Days or No-Spend Months or No-Spend Year
How long you want to continue the no-spend challenge is totally up to you. If you believe you can control yourself easily and want to go big or go home, you could start following No-Spend Year.
If you are uncertain of how this might affect your life and want to try it out first, go ahead and try No-Spend Days. Personally, I feel that everyone must start with days and then months.
I don’t see merit in following a no-spend year because I want to enjoy and spend a small part of my money on my wants if that’s monthly dinners or a 3-day trip.
According to me, following the monthly no spend plans work best (for me). Here’s my plan if I were to start following the challenge today:
First, I would need to get used to the entire routine of not saving money, so on two weekends (Week 1 and 3: Saturday & Sunday i.e 4 days/month), I’ll not spend anything out of the box. I’ll stick to the basics and control my urges to spend like a king.
You might think spending less for a few days is as easy as it can get, try it out first and then read the article AGAIN 🙂
Once you slightly adjust to the no spending pattern, try going on two full weeks without spending money. Here you will realize what you spend on and how not spending money can be tough. So don’t rush this step, take two months here (i.e – month 2 – 2 weeks and month 3 – 2 weeks).
Wow, if you’re here, pat your back, you deserve it! By now it might seem pretty easy for you to follow the no-spend challenge. All your impulsive spending habits have reduced and you are more fulfilled with the little things in life,
Great! Take it up a notch and try going 1 full month without spending on wants. Again I don’t recommend following a no-spend year because I would love to spend a small part of my income on my wants and I’m sure you want to do that too.
Now here’s what I want you to do, grab my 50-30-20 Budget Planner (best for beginners) or the Free Budget Template (best for advanced level budgeting). Once you do that, write down all your expenses and start analyzing your expenses into needs and wants.
Cut off any expenses that you can easily live without and keep your wants between 5-10% of your net income (net income = income after taxes/take-home income).
If you need a little more help in managing your budget, read this – How to Track Your Expenses in 6 Steps.
I have other budgeting articles that might help you, you can check them out under the Save Money Category.
Free 30 Day No Spend Challenge Tracking Sheet
If you love crossing off or scribbling or coloring or writing down what you learned on each day of your 30-day no spend challenge, I have something interesting for you. Grab my free track sheet to track your 30-day challenge with ease.
I have left a blank on top, fill it up with your WHY. Why do you want to take up the 30-day no-spend challenge? Read below to understand this better!
Don’t forget to share your success stories with me in the comments or my Instagram handle!
My Perfect Formula for a No Spend Challenge
If you truly want to get success in the no-spend challenge, I’ll share with you my formula for success. These pointers will make things clear for you.
WHY is the Answer
Nobody likes to cut down on expenses, it sucks right! So following the no-spend challenge should also suck. I want you to think of WHY you’re doing this. Why do you want to save money, restrict yourself from spending, WHY! What’s the long-term vision?
Spend some time figuring out why you must save money. Maybe you want to go for a vacation, maybe you want to pay rent, your debt is ever increasing and you’re done living with debt. Maybe you want a new car because you’ve never had a car in your entire life and you eagerly want a car.
To get these things you need money. Now whether that’s by taking up a part-time job or saving money or both (do both), you need money! This very thought must drive you to follow the no-spend challenge religiously.
Think of it as a Game
When you think of anything as a game, you tend to get brutally competitive (even if it’s with yourself). Whenever you feel like giving up, think about the game you’re playing – do you want to lose when you’re already so close? And when the month’s over, treat yourself like a game treats you for winning. That’ll surely keep you motivated.
At the end of the no-spend month, you will have two gifts, one will be your treat and the second will be your savings. Look at your bank account and see the money you’ve saved, pat yourself and do it all over again till you firmly believe you won’t spend money and have learned good money habits.
Make a Note of your Wants
Still want to get something? Don’t get it now, instead make a note of the things you need. Once your challenge period is done, review this list and see if you still need to buy something.
Add up all the items in your list, I’m sure it will be a huge number. Do you want to spend so much money after working hard to save money in the first place?
No Spend Challenge: Final Thoughts
Spending only on needs for a month seems challenging but it’s not as crazy as it seems. No spending months are doable and practical. All you need to focus on is spending less and saving more. As long as you avoid all wants and think twice before spending on needs, you don’t need to worry.
If you’re determined to start your no spend month or day, I suggest you make a simple budget and slowly learn to make a proper budget. If you’re starting your journey as a new no-spend challenger, ignore ‘No Spend Years’.
You need to be highly disciplined for that and honestly, I don’t think no spend years is great. Saving money and budgeting should be fun that way it can prolong for a long period.
If you have any questions or doubts, let me know in the comments below and I’ll get back to you asap.
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