Want More Money in 2022? Then Don’t Spend So Much
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, from our morning trip to the coffee shop to unwinding at happy hour after work. We treat spending 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, it’s easy to get sucked into buying stuff, leaving our savings to suffer.
Sometimes the best way to shake up our shopping habits is to go on a spending freeze. 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!
What Is a No-Spend Challenge?
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.
The basic premise of a no-spend challenge is to cut out non-essential spending for a certain amount of time. It could be for a week, a month or even an entire year.
The purpose is to greatly limit your cash outflow so you can watch your savings build up.
What You Can Spend Money on During a No-Spend Challenge
If you need to purchase something during your no-spend challenge, it should be something that’s necessary and you absolutely can’t do without.
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.
Consider these as acceptable items to purchase during a no-spend challenge:
- Toilet paper and paper towels
- Doctor’s copays
You also want to keep up with bills that are due. The goal of this challenge isn’t to make life harder on yourself by cutting out spending on essential expenses.
What you’ll be putting a pause on, however, is unnecessary spending in these categories:
- Beauty and self-care
- Eating out
The Financial Benefits of a No-Spend Challenge
A no-spend challenge can be a big boost to your financial situation.
You can use the extra money you normally would have spent to build up your emergency fund. You could use it to pay down debt. Or you might want to put the money toward other financial goals, like saving for a new car or an upcoming vacation.
While no-spend challenges are designed to be temporary, you can always extend your challenge or — extra points for this — treat it as more of a lifestyle change.
Ideally, your no-spend period will help break poor 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.
6 Steps to Implementing a No-Spend Challenge
It may seem daunting to commit to a no-spend challenge, but don’t fear. These steps will help you halt spending unnecessary money.
1. Figure Out When You’ll Do Your No-Spend Challenge
Fans of alliteration may choose to do a No-Spend November, and build a nice savings reserve right before jumping into the holiday season. However, you can choose to do your no-spend challenge any time of the year.
Pick a time when you don’t anticipate needing to do a lot of shopping. If you have kids, for example, you may not want to do a no-spend challenge during back-to-school season or the month of your kid’s birthday. You might want to avoid doing a no-spend challenge during major holidays.
2. Decide What Your No-Spend Challenge Will Look Like
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, but keep in mind, you can also create your own no-spend challenge.
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 on non-essential items usually for an entire month — though you could do it for less time or more to switch up the difficulty level.
You might want to start off with a no-spend weekend challenge or a no-spend week challenge, if you’re not ready to stop spending money for an entire month.
If you’re able to stick to a no-spend month challenge with ease, you might stretch it out to last two or three months.
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 spend money. You can start small with five days or try something more challenging, like 15 days.
Track your daily spending so you can take note of — and celebrate — each day when 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 the 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.
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 (and help you save more money). Try going 90 days or maybe even six months without indulging your vices. (And don’t pick up any other bad spending habits in its place.)
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.
3. Set a Savings Goal
Before you kick off your spending freeze, determine how much money you hope to save during your no-spend challenge.
Look at your budget, or bank statements from the past few months, to get an idea of what you normally spend on eating out, entertainment and all the other categories you’ll temporarily nix. Transfer that amount into your savings account.
In addition to knowing how much you want to save, it’s important to know why you’re undergoing this challenge in the first place.
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 financial goals on the forefront of your mind to encourage yourself to keep saving.
4. Let Others Know About Your No-Spend Challenge
Tell your spouse, partner or roommate about your money-saving plans before beginning your no-spend challenge. Switching up your shopping habits will likely affect the people you live with. Hopefully, they’ll be on board with the reason behind your spending ban and can encourage you to stick with it.
You may also want to notify close friends or family members so they’ll understand why you might have to decline invitations to places or why you don’t plan on exchanging gifts during a special occasion.
5. Plan Ahead
Some advanced planning can help you avoid spending money during your no-spend challenge.
You might want to stock up on food so you don’t have to step foot in a grocery store. If you do have to go to the grocery store, create a list before you go so you don’t fall victim to impulse purchases.
Another smart tip is to plan meals. Meal prep will help you avoid the temptation to order takeout after a long day at work.
6. Don’t Let Setbacks Ruin Your Progress
Give yourself some grace if you slip up and buy something from your restricted list during your no-spend challenge. Nobody’s perfect.
Continue with your challenge. Don’t let a slip up be an excuse to stop your savings progress.
Tips to Avoid Spending Money During Your 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.
1. 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.
2. 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.
3. 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. It doesn’t have to cost money to have fun.
Exploring the great outdoors, engaging in a hobby, spending quality time with friends and family and attending a free event in your city are just a few suggestions to entertain yourself at no cost.
4. “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.
5. Swap, not Shop
Exchange goods and services with neighbors, friends and family without exchanging money. Organize a clothing swap or exchange kids’ toys. Volunteer to babysit your neighbors’ kids in exchange for them cutting your lawn.
6. Avoid Temptation
Leave your credit cards at home. Delete those sales promotion emails from your favorite stores. Don’t tag along with a friend to “window shop.”
Make it easier on yourself by not putting yourself in situations where you’d be tempted to buy something.
7. Keep a Wish List of Items You Want to Buy
If you find yourself wanting to buy a non-essential item during your no-spend challenge, write it down on a list rather than buying it immediately. After the challenge is over, review your list. After giving it some time, you may find there are many items on the list you’re not compelled to buy anymore.
Nicole Dow is a senior writer at The Penny Hoarder.