You like to test yourself and set up challenges that will help you improve your life. A no-spend challenge could be the best way to improve your finances.
Budgeting is not something everyone enjoys or finds exciting. This is normal.
If you want to manage your finances better and stop wasting money, you may create a challenge.
This strategy does not require you to crunch numbers or be bored. If you want to motivate yourself, include your family or friends and turn it into a friendly contest.
No-spend challenges can change your financial situation. This guide will teach you everything you need in order to succeed.
Table of Contents
What is a No-Spend challenge?
Why Take the No Spend Challenge?
You can spend up to a certain amount
How to Do a No-Spend challenge
What is a No-Spend challenge?
No-spend challenges are when you limit your spending to only essential items over a certain period of time. This not only saves you money, but can also help you to combat impulse purchases and change your spending patterns over time.
Imagine all the money you can save!
A spending freeze will help you achieve your financial goals, whether it’s to get out of debt or build up an emergency fund. It may seem extreme, but you can find some fun things to do for free. You’ll also be encouraged to use your creativity.
Why Take the No Spend Challenge?
You need to know your motivations before you begin your planning and no-spend challenge. What is your objective? What is your goal?
Here are some examples of why people freeze their spending:
Stops you from spending on impulse.
We are all addicted to impulse buying because it gives us instant satisfaction. Over time, we regret our purchases and end up throwing out the things we never needed. It’s a total waste.
Over half of U.S. consumers–54%- have admitted to making impulse purchases that cost $100 or more, with 20% spending at least $1,000.
You can take more time to think about your purchase if you restrict spending.
You can then put your purchase in context and decide (more often than you think) that it is not worth the money.
You wish to reset your budget
We can all become lost in budgeting and let things get out of control. It can have a negative impact on your mental health and cause feelings of financial stress.
No-spend challenges can help you regain your budgeting discipline. This can be a reset for thirty days while you review your budget.
Savings for a larger purchase soon
One of the best ways to save money quickly is by imposing a shopping ban. You need extra cash fast, whether you are saving for a new car, or a property.
It may seem like the best way to get cash fast, but it’s not sustainable in the long run.
You may want to take further action against your debt or bills
You may need to use a more drastic method if your efforts to reduce your debt or bills are not working.
No-spend challenges would redirect your normal luxury spending to pay off your debts, bills or both.
You can have a big impact in areas where you might normally be working slowly. The payback period can be significantly shortened if you don’t spend any money.
Want to reduce the cost of your bills? Use a service such as Trim or Billshark to save hundreds of dollars.
You are interested in a financial test
What about a bit of fun? A money challenge is a good way to test willpower and achieve short-term goals. Your no-spend challenge could be for a month or even longer.
Even your family and friends can get involved. You can create a competition and build a community around the idea of not spending any money.
Invite friends to help you if you find it difficult to stick with your plans.
You can spend up to a certain amount
The “no spend challenge” does not mean you will not use money to buy essentials. You will still need to pay for or buy certain things during your challenge.
The challenge allows spending on items like:
Rent/Mortgage
All Utilities
Insurance
Internet/Cell Phone
Shop for Groceries
Gas for your vehicle
You can reduce the cost of these items during a “no spend challenge”
Enjoy the Entertainment
Coffee, food, and drinks
Clothing
Hair/Nail Services
Any other item that is not a necessity (not a desire)
How to Do a No-Spend challenge
Are you interested in the No-Spend Challenge and want to test your financial capabilities? Here are some tips for a successful money challenge.
- Pick your timeframe
Often, long-term goals (while admirable) are not sustainable for our financial habits or motivation levels. Choose a realistic timeframe that is focused on your financial goals.
Do not be afraid to begin small and then extend the time frame for this challenge.
Common No Spend Challenge timeframes
Weekend
One Week
One Month
Spending Challenge for 1 Year
It will be an incredibly difficult test. This will take planning and preparation and you may not want to begin with it. You can start by focusing on other timeframes to learn your spending habits.
- Establish your rules
It will be different for each person. I’ve already told you what you can spend money on. You may also want to set up more specific rules for your own financial life.
As an example:
Stop buying clothes
One restaurant meal per month
No paid date nights
Keep birthday presents for family and friends
- You Should Know Where Unspent Funds Will Go
The next step is to decide how you will use the money that you have saved. Find out what you can do with the money that you have saved and how it will benefit your finances.
Once you have completed the challenge, you may jump back into spending. AVOID IT.
Start investing the money you have saved in your own goals or other areas where you will benefit. Once you develop this habit, it becomes easier to pay yourself first.
Consider these popular options:
How to pay off credit card debt
Student Loans: Pay them off
Spend money on a vacation fund
Start investing for your future
Add money to your emergency fund
- Include your spouse or family members
It’s much easier to keep the challenge of no spending when you have your entire family on board.
Working together to achieve a common goal will boost your motivation. So, get your friends to help you with your money challenge.
Even if your friends don’t participate, they will still change their spending habits around you.
- Prepare before you begin
To be successful with your challenge, you will need to plan. If you have just moved to a new apartment or home and need new furniture, this challenge may not be right for you.
If you want to drastically cut your spending for a few months, here are some things to consider:
Shop for groceries and meal plans
Stock your pantry well before you start so that you don’t end up buying random items from the grocery store.
List FREE activities, entertainment and things to Do
Set aside cash for emergencies
Tell your friends about your plan not to spend money
- Keep your debit and credit cards away
Out of sight, out mind is sometimes the case. It’s easier to stop spending when you hide your debit or credit cards.
When they are easily accessible, it makes impulse purchases much easier.
Keep them out of wallets and purses. For the duration of your challenge, put cards in a drawer or hand them over to a family member you trust. You’ll need to rely solely on your budgeted cash to get through.
- Checking emails and social media is not recommended.
Social media is fun but can also be used to display material goods and ‘dream lives’, which can cause harm. Online ads and coupons are also a great way to be distracted and tempted into shopping.
You can achieve more than just a no-spend challenge by staying off social media. It can bring you peace and quiet while you focus on real life.
It also applies to the emails you receive from stores or online shops to which you have subscribed. Set up a folder for these emails so they don’t appear in your main email. You can also unsubscribe to all emails while you are on a spending freeze and then resubscribe later.
- Get things done to distract yourself
You’re likely to spend money if you think about it. How about trying something new to focus on your energy and attention. The challenge to spend no money will finish itself!
Try this:
Start a side business
Sell unused items
Budgeting is important
Read some money books
Learning a new skill or dish in the kitchen, for example. A new recipe in the kitchen, or a skill
- Avoid temptations
Where do you find yourself tempted to buy things? When you have the opportunity, where do you spend your money? You need to learn how to control your impulses so they don’t overtake you.
You can change your spending habits if you are unable to distract yourself, or if you don’t have a plan. Try the 30-day rule or find new fun activities to break your routine.
