Are you ready to save money and make some serious headway to reach your financial goals?
Then a no spend challenge may be just what you need.
What Is A No Spend Challenge?
A no spend challenge is when you commit, for a specified amount of time, to not spend any money beyond what is necessary (we’ll talk about what’s necessary a little further down).
Rather than trying to just cut your spending to bare bones forever, a no spend challenge allows you to save extra money with a finish line in sight. This is a huge motivator and will increase the likelihood of you committing to cutting your spending and saving money.
Why Should You Do A No Spend Challenge?
To save money, right?
Well, there’s more to it.
A no spend challenge is also great for
- Developing strategies to curb unnecessary spending habits;
- Figuring out what you can live without;
- Jump starting a healthier financial lifestyle.
A no spend challenge will not only save you money, but will also open your eyes to what your spending habits are, as well as what triggers you to purchase beyond what you actually need to spend. It will provide you an opportunity to take a closer look at your spending habits and reveal what you can actually do without.
It also requires you to come up with routines and strategies to do without. When we embarked on our first no spend challenge, we learned that making coffee at home actually saved us time and money. Now, we prefer our home brewed coffee over any coffee shop!
Before You Get Started
What is your why?
Think about why you are doing a no spend challenge. Are you running out of money by the end of the month and need to plug up holes in your budget? Are you saving for a vacation or other big-ticket item? Whatever the reason, having a clear “why” will help you stay motivated and committed to the challenge.
What are your expectations?
Consider how much money you want to save and what you can reasonably save. Do these two match? To figure how much you can reasonably save, look over your bank or credit card statements for the period you choose to do the no spend challenge for and add up how much you are currently spending on everything beyond necessities. This will give a ballpark figure of what you can hope to save.
Make sure your significant other is on board
This seems like a no brainer, but it’s important to talk about a no spend challenge with your partner. If you are the one initiating the no spend challenge make sure you share your why and your expectations for both the challenge and their spending habits. It’s also important to get your partner involved in planning out the next few steps.
Pick a specified time period
The most common no spend challenges last:
I’ve even seen folks take on a 6 month no spend challenge!
You’ll want to choose a time period based on your saving goals and expectations. If you want to save more money, you’ll want to choose a longer challenge like a week or a month.
When we were saving up for a big-ticket item, we challenged ourselves to a no spend month. Other times, when we wanted to get ahead or make extra payments towards debt, we did a series of no spend weekends.
Whichever time period you choose, I recommend that you check your calendar. Make sure you don’t pick a time when you’ll be on vacation or around holidays. This can be a recipe for failure.
I also recommend starting with a shorter challenge like a weekend or a week challenge before tackling a month or longer.
Set Some Rules
Before the challenge starts you need to establish rules. There are lots of opinions on what the ground rules for a no spend challenge are. However, this no spend challenge is yours and you get to set the parameters for your spending.
I’ll share with you some of the most common rules out there. Use some, all, or none of these! And create your own if these don’t suit you.
Rule #1: Only Purchase Necessities
Necessities include what Dave Ramsey likes to call the four walls. These expenditures include:
- Car payments
- Credit Card Payments
- Student Loan
- Daycare Costs
Rule #2 No eating out
That means no coffee, no snacks at the gas station, no meals out.
Rule #3 Basic Toiletries Only
Shampoo, soap, and toothpaste are allowed, but no makeup or extra hair products.
Rule #4 Medical Items are Allowed
Dr.’s visits and medication are ok.
Rule #5 Birthday Presents for Family Are Allowed
You may choose to only purchase birthday presents for family members. This might mean you decline an invitation to your child’s classmate’s birthday party or other birthday party.
Rule #6 Fix first, replace later
If something breaks, always try to fix it first before replacing. If it can’t be fixed and you can wait to replace it even better!
One thing you will notice about these rules are they are specific! Whatever your rules are make sure they are clear and well defined.
Research free activities
Even if it’s just a weekend challenge, make a list of free activities you can do instead of spending money.
For example, if your family goes out for breakfast on weekend mornings, replace that activity with a hike or a visit to a park. You can also see if any museums in your area have free days each month you can visit without paying admission.
Plan these activities ahead of time so you’re not tempted to pay for activities because you or the kids are bored.
Make a meal plan
You’ll want to have a plan for your meals during your no spend challenge so you don’t end up running to the grocery store to get something for dinner or stopping to get coffee in the morning. Even if eating out is still an allowed expense, make a plan for when and where it is ok to eat out from.
Write out your plan
Write out each of these steps so you can refer to your plan. I like to use a notebook where I include my why, my savings goal, and my rules for the challenge. This is also where I track my progress.
For longer challenges, I’ve used this notebook as a sort of financial journal, taking notes of what worked and what didn’t.
While You Are Doing The No Spend Challenge
Track Your Progress
You don’t need anything fancy, but track your spending and your savings! This is a great way to stay motivated and hold yourself accountable.
Friend, don’t go to Target if you always spend more than you should there. Keep your plan handy and remember your why!
A no spend challenge takes some planning and thought ahead of time but can be a great way to jumpstart your savings and begin a new and better financial lifestyle.
If you mess up during your no spend challenge DO NOT BEAT YOURSELF UP. Figure out why it didn’t work and reconsider some of your rules or your plan and then keep going!