4 Ways to Use a No-Spend Challenge to Grow Your Savings
The less you spend, the more you save.
It sounds simple in theory, but in practice, it’s much more complicated.
Spending is built into our daily habits. We treat it as a pastime when we’re bored, dropping hundreds with a few taps on our phone. Even when we try our best to stick to a budget, we get sucked into buying stuff, leaving our savings to suffer.
A no-spend challenge can help you reset your spending habits and pad your savings. It’s kind of like a crash diet, but in a good way!
Despite the name, a no-spend challenge doesn’t mean you sit on your hands and spend no money whatsoever. After all, you don’t want to fall behind on your bills, and there are some necessities you simply can’t do without. With a no-spend challenge, you cut out non-essential spending for a certain amount of time.
So groceries, yes. Candy bar in the checkout line, no. Also, no new iPhone, even if you’ve been dreaming about an upgrade. No new shoes, even if they’re on a huge sale. This is not the time to make excuses to buy stuff you don’t really need.
Deposit the money you normally would have spent in your savings account, use it to pay down debt or apply in toward another financial goal.
While a no-spend challenge is meant to serve as a temporary personal finance boost, you can always extend the challenge or — extra points for this — treat it as more of a lifestyle change.
Ideally, your no-spend period will help you make long-lasting changes to your spending habits. Perhaps going without making vending machine purchases at work will help you realize you don’t need to buy those snacks on a regular basis. But be careful not to deprive yourself so much that you binge spend once your challenge ends.
4 Ways to Challenge Yourself to Stop Spending Money
There isn’t just one way to do a no-spend challenge. Gear your challenge to what works best for you. Here are four different ways to approach this money-saving strategy.
1. Ban Spending for a Set Amount of Time
This is probably what comes to mind when most people think of a no-spend challenge. This approach involves banning all spending (outside of essentials) usually for an entire month — though you could do it for less time or more to switch up the difficulty level.
People who want to save money before the winter holidays — and those who love alliteration — will commit to a No Spend November, like The Penny Hoarder contributor Jamie Cattanach did a few years ago.
2. Track No-Spend Days
An easier way to incorporate a spending ban in your life is to establish a certain number of days per month when you won’t make any purchases. You can start small with five no-spend days or try something more challenging, like 15 days.
Track your daily spending so you can take note of which days you don’t spend a thing.
The upside to this approach is that you don’t have to ban spending for a long stretch of time. You can scatter your no-spend days throughout the month in a way that feels natural, so you hardly even realize you’re going without spending.
Just be careful not to overspend on the days that aren’t no-spend days.
3. Target Your Weaknesses
You know your shopping weaknesses. Maybe it’s buying new clothes, ordering take-out too often or overspending on Amazon. This approach focuses your no-spend challenge on a particular type of item or retailer, rather than banning all discretionary spending.
Since you’re just focusing on one or two things — like no makeup or no video games — you might want to make your challenge longer than a month to have more impact. Try going 90 days or maybe even six months without indulging your vices. (And don’t pick up any other bad shopping habits in its place.)
4. Freeze Spending During Special Occasions
It’s easy to fall into overspending during special occasions. Try prohibiting spending around holidays, birthdays or other celebrations.
Challenge yourself to celebrate in new ways or set new traditions. You could commit to a year of DIY presents. Or look through your belongings to find something you can regift.
Volunteer with friends and family rather than exchanging presents. Or share a fun experience together that doesn’t cost any money — like having a movie marathon or singing karaoke at home.
Tips for a Successful No-Spend Challenge
They call it a challenge for a reason. Cutting off spending can be hard, especially when swiping your debit card everywhere you go has become second nature.
Here’s some helpful advice to get you through your no-spend challenge.
- Become part of a community. Bonding with others on a no-spend journey can help you stay committed to your efforts — whether it’s a group of your friends who also want to save money or an online forum where like-minded strangers share their triumphs and failures. Joining The Penny Hoarder Community is a great place to get started.
- Find free things. Check Craigslist for items posted for free. Join your local Buy Nothing group, where community members offer up items they no longer want. Ask your local librarian about what your library loans out besides books and DVDs.
- Find free activities. Just because you’re not spending money doesn’t mean you have to sit at home doing nothing, counting down the days until you can rejoin society. Exploring the great outdoors, engaging in a hobby, spending quality time with friends and family and attending free city-sponsored events are just a few suggestions to entertain yourself at no cost.
- “Shop” at home. Take inventory of stuff you already have at home but have long ignored. You can probably make a couple meals out of the food in your pantry and freezer. Laying out all the shoes you own may help you realize you actually don’t need to buy another pair. You might even discover you have unopened makeup or clothes with the tags still on them.
- Swap, not shop. Exchange goods and services with neighbors, friends and family without money exchanging hands. Organize a clothing swap or exchange kids’ toys. Volunteer to babysit your neighbors’ kids in exchange for them cutting your lawn.
- Focus on your savings goal. Knowing the “why” behind your spending ban will help you power through the days when all you want to do is go out and buy a latte. Whether you’re saving for a big expense or to become debt free, keep your goal on the forefront of your mind to encourage yourself to keep saving.
Nicole Dow is a senior writer at The Penny Hoarder.