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No spend challenge: how it works

no spend challenge

The no spend challenge is on the extreme end of budgeting/saving challenges, as instead of cutting down on specific spending, you try to stop frivolous spending altogether.

A budget/savings challenge can be a fun way to take on your money goals, especially as the cost of living has increased in almost every category in 2023, according to the Bureau of Labor Statistics.1 One of these challenges is a no spend challenge. The no spend challenge is the ultimate test of will and a great way to break bad spending habits. Curious about how it works? Below is everything you need to know about the no spend challenge. 

The No Spend Challenge; The Basics and Prepping  

If you happen to fringe on the different signs of financial irresponsibility, like overspending, this challenge will stop you in your tracks! Most people start by picking one or more areas of unnecessary spending to tackle with this challenge. Here are some of the common categories that people choose to try this challenge in: 

CategoryExamples
Clothing and Accessories– Apparel purchases- Shoes- Accessories such as jewelry, handbags, etc.
Takeout and Dining Out– Meals from restaurants- Fast food purchases- Dining at cafes and eateries
Recreational Activities That Cost Money– Tickets to events or concerts- Sports and fitness classes- Hobbies with associated expenses
Furniture and Decor– Home furniture purchases- Decor items such as artwork, rugs, etc.
Books, Movies, Video Games, TV Subscriptions, and Other Media– Books and e-books- Movie theater outings or streaming services- Video games and gaming accessories- TV subscriptions and other media services
Makeup, Skincare– Cosmetic products- Skincare items and routines
Car Accessories and Luxuries– Upgrades and accessories for the car- Premium features or luxury items related to the vehicle

Everyone spends money differently, and you may even find drastic changes in your spending habits seasonally. For this challenge to be effective, it will be essential to figure out the different areas or areas that you spend the most money on. Before starting the no spend challenge, take a few weeks to track your spending habits or look at recent bank statements/receipts to figure out exactly how much you are spending on needs vs. wants to hone in on where you can make cuts. 

Getting Started Once You Are Prepped

Once you figure out what areas you want to focus on, you can start the challenge. The rules are simple, go as long as you can without spending any money in that area. This is one reason you need to include unnecessary expenses rather than necessities like rent or groceries, as cutting those costs down to zero is unrealistic. 

The no spend challenge is usually done for 30 days (called the no spend month challenge); however, some people go longer, even up to a year! 

Setting Yourself Up for Success With the No Spend Challenge

Before you take on this very limiting challenge, there are some things you can do for your best chance at success; here are some tips: 

Make It Harder to Buy Stuff

This is an easy way to prevent impulse purchases, especially while shopping online. For example, most people have a primary way to pay online. When starting the no spend challenge, you can erase whatever debit or credit card you have saved on your browser or store apps.

This way, anytime you want to buy something online, you have to go and get a card you can use and enter it. Those additional steps can be precisely what you need to stop an impulse purchase and keep your challenge on track. 

When shopping in person, you can keep your credit cards at home and bring cash—studies show that most people spend more on credit cards than paying with cash. 

Avoid Spending Triggers

This can be a big way to save money and stay on track to stop spending. Let’s say you are a vinyl junkie and are trying to cut down on this area of recreational spending. You should avoid all record stores and even music and thrift stores until the set period of time for the challenge is over. If you go to concerts, you can bring just enough cash to buy a ticket, food, and drinks, so there is no temptation to buy a vinyl record, even if one is available for sale. 

Be Prepared, so You Don’t Have To Spend Money

With some spending categories, prepping will be key to not spending a dime during this challenge. 

For example, if you want to cut out spending money on dining out and takeout, you should meal prep or get groceries ahead of time. There will be less temptation to go out to eat or order in if you are in a time crunch. Having everything you need ahead of time can ensure that you won’t spend unnecessary money!

Find Free Alternatives if Possible

Being creative with money and otherwise can be a great workaround to succeed on your no spend challenge without giving up the things you love. For example, if you love a particular restaurant, you can always try to make the recipes at home. If you love hunting for new furniture, you can simply rearrange things within your home or repurpose old furniture you already own to take care of that spending itch. 

Create a Budget To Stop Spending 

Budgeting will always be your best friend with anything money-related, including no spending challenges. A budget will give you a better idea of the necessary expenses you have each month and can absolutely help you stay on track with the no spend challenge. 

And once you are done with the no spend challenge, you can see exactly how much money you have that can be allocated to essential parts of your budget like savings! 

Automate Your Money

Payday can be a huge spending trigger for many people; one way to curb spending is to automate your money as soon as it hits your bank account. For the no spend challenge, you can increase the amount of money that goes into your savings account after taking care of your necessary expenses like debt payments or bills. With all of your money allocated out of your checking account, it can be easier to not spend. 

Personalize the No Spend Challenge

Making this your own no spend challenge is a great way to set yourself up for success. Adjust and personalize the no spend challenge for your specific lifestyle and household. You can adjust the length of the parameters of this challenge, or you can throw in any no spend challenge ideas into the mix for your best experience and success. 

Go Easy on Yourself if You Fail

A no spending challenge is tough; it’s not just limiting, but it means you cannot spend any money on whatever expense you want to cut out. And so, if you face any hiccups or setbacks (And most people do), it is important to not get discouraged. Keep trying, and even if you make mistakes, learn from them and move forward. 

Track Your Progress and Setbacks

Another way to be successful at the no spend challenge is to track your progress, positive or negative. You can do this with various no spend challenge worksheets available online, or you can track the challenge yourself. 

By tracking how you do with this challenge, you can find patterns in your spending habits. This can be a massive advantage to help you be mindful and break poor spending habits. 

For example, let’s say that you find that you spend the most money on the weekend; in that case, you can limit the amount of money you keep on you when you go out, or you can change the activities you are going to do, to stop spending money. 

Benefits of the No Spending Challenge? 

Even doing the no spend challenge one time can help you learn a lot about your money habits, and it can have many benefits. Here are some things you will learn from this challenge, along with some benefits at the end of it: 

Building Better Money Habits 

One huge benefit of the no spending challenge is that you will learn better money management skills even if you only do it for a few weeks. This challenge really tackles frivolous spending head-on, which is a huge pain point for many individuals and households. You can put that hard-earned cash somewhere more productive, like savings, by stopping your spending on unnecessary things! 

More Money To Pay Off Debt 

You will save some money at the end of the challenge, and if you have debt like most Americans, you can use that extra money to pay it off! Debt can be costly and a significant anchor on your finances. 

Pay off that debt for more financial freedom. Not sure which debt to tackle first? Starting with high interest debt like title loans, payday loans, or other bad credit loans, is one strategy that many people use. 

Building a Savings Fund

Every financial expert you talk to or money blog you read will emphasize a savings fund. Having three to six months of savings is crucial to take care of unexpected expenses without going into debt or losing assets like a car or home. 

Putting Financial Goals on the Forefront

Freeing up some money will also help you think about financial goals. A few common ones people have are owning a home, investing, and retirement planning. Or you may want to do something fun with that money, like traveling! Regardless, getting rid of multiple small, unnecessary expenses can help you do better and bigger things. 

FAQS 

How do I choose which spending categories to include in my No Spend Challenge for a spend month?

Focus on your most significant areas of discretionary spending. Review your recent bank statements to identify where you tend to overspend, such as on luxury items or entertainment, to help you get a better handle on your finances.

Can the No Spend Challenge, set for a specific period of time, help in debt reduction?

Absolutely. The money saved during the No Spend Challenge can be allocated towards paying off debt, especially high-interest ones, thereby accelerating debt reduction and helping you save more money in the long term.

What are some strategies to handle social situations during the No Spend Challenge without feeling like you’re missing out?

Suggest low-cost or free activities when meeting friends, like outdoor activities or potluck dinners. Use social media to find community events or groups that align with your goals. Being open about your challenge on social media can also gain support from your social circle.

Is it realistic to include family members in the No Spend Challenge to avoid spending money unnecessarily?

Yes, it’s a great idea. Make sure to communicate the goals and rules clearly to all family members and involve them in planning and decision-making. This can turn it into a fun family endeavor.

How can I stay motivated throughout the No Spend Challenge and feel like I’m making progress?

Set clear, achievable goals and remind yourself of the benefits. Tracking your progress and celebrating small victories can also keep you motivated.

What should I do if I fail or break the rules of the No Spend Challenge?

Don’t be too hard on yourself. Understand what led to the lapse, learn from it, and continue with the challenge. Remember, the goal is to improve spending habits over time and to save more money.

How can I effectively track my spending and savings during the challenge, especially regarding discretionary spending?

Use budgeting apps, spreadsheets, or traditional pen-and-paper methods to track your expenses and savings. Regularly reviewing your finances can help you stay on track. Avoid using your credit card during this period to better control your spending.

What are some free or low-cost entertainment options to consider during the No Spend Challenge to help you save money?

Engage in outdoor activities like hiking, biking, or visiting public parks. Utilize public libraries for books and movies. Online platforms offer free courses and virtual tours. These activities not only save money but also enrich your life with experiences rather than material goods.

How can participating in this challenge contribute to building an emergency fund?

By reducing your discretionary spending and saving the money you would have otherwise spent, you can redirect these funds into a savings account. This not only helps with saving money but also prepares you for unforeseen financial emergencies.

The Bottom Line With CreditNinja

The no spend money challenge can be great if you feel like you need help with overspending with unnecessary purchases. You can start small with no spend days, the classic with a no spend month, or have larger stretches of no spend months. To learn more about savings challenges, budgeting tips, and financial health, check out the CreditNinja dojo. 

References: 

  1. Consumer Prices | BLS
  2. How credit cards activate the reward center of our brains and drive spending | MIT Sloan

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