Are You Up for a “No Spend” Challenge?

There are three inevitabilities in life: death, taxes, and spending way too much money on unnecessary impulse buys. It’s so easy to shell out $100 on a pair of pants or some fancy cocktails without even thinking about whether you can afford it. That’s why so many people have begun taking the “no spend” challenge, a trendy approach to managing personal finances by cutting wasteful spending. While this challenge is becoming increasingly popular, it still has detractors who are more skeptical about its long-term effectiveness. Here’s why people are taking the “no spend” challenge and if you should consider doing the same.

What Is a No Spend Challenge?

If you’re thinking about taking a no spend challenge, the first thing you want to do is set a personal goal. This could mean saving enough money to pass a certain threshold in your bank account or afford a new car. You’ll also want to set a timeline for yourself, whether a week, a month, or even a year. No spend challenges are meant to be temporary fixes for getting your spending back on track, rather than a permanent change. You can easily determine whether the challenge is working with regular check-ins by giving yourself a finite time frame and an exact goal.

No spend challenges aren’t as extreme as their name may imply. You’ll still spend money pretty regularly, albeit less wastefully. While taking this challenge, all of your money should go exclusively toward essential purchases such as groceries, your mortgage, and medicine. This means cutting back on expenditures such as dining out, attending concerts, or buying new furniture, even though all of those things may bring you happiness. Essentially, this boils down to going on a diet for your finances.

The Benefits of No Spend Challenges

The most obvious benefit of a no spend challenge is saving money. Think about all of the purchases you absent-mindedly make every day — $5 for coffee, $3 to add avocado onto your lunch, $20 for post-work drinks, $40 for that new shirt you’ve been eyeing, which is finally on sale. While each of these purchases may be small on their own, they add up to hundreds of dollars every week that could be put toward essential bills.

By temporarily cutting certain items out of your life, you might learn more about what daily purchases have actually been eating away at your finances. For instance, you may find that you don’t need to buy that morning cup of coffee, which could end up saving you $5 a day, $35 a week, and nearly $2k each year. Suddenly, that money is freed up to pay off a month’s rent or invest into your retirement fund. And that’s just coffee — you could save tens of thousands of dollars by cutting back on new clothing, alcohol, and other common purchases. The key to a no spend challenge is willpower. You make the decision to stop those sorts of purchases, and you stick with it.

The Drawbacks of No Spend Challenges

One of the biggest criticisms of this frugal mindset is that no spend challenges don’t set people up for long-term success. This all-or-nothing mindset makes it difficult to find a good balance between financial stability and personal happiness. If you’re taking the no spend challenge, then you’re depriving yourself of things that bring you joy in the name of paying off bills. Think of the no spend challenge like a fad diet — you may eat salads for an entire month so that you can go back to eating cheeseburgers the next month. This approach helps you lose weight in the short term, but it doesn’t actually teach you how to eat healthier.

Critics of the no spend challenge recommend taking a more moderate approach to your finances, such as creating a balanced budget at the start of every month. Meal prepping is another fantastic way to cut down on the high cost of eating out while still enjoying delicious food made at home. Or, if you want to update your wardrobe, consider visiting a secondhand store instead of buying new clothing. All of these are small ways to cut down on wasteful spending without eliminating the things that make you happy.

Advice for a Successful No Spend Challenge

In addition to setting a goal and timeframe, there are other ways to increase the chances of a successful no spend challenge. First, look at the time of year — it may be unwise to start a no spend challenge in July when you’re about to head out on summer vacation. It also probably isn’t great in December with all the holiday shopping you’ll do for your family and friends. Try to pick a month like March or October when you’re less likely to be making such lavish purchases to begin with.

If you see something you really want to buy during the challenge, don’t cave in. Instead, create a wishlist of items that you can purchase later on. That way, when the challenge is over, you can look at the list with a less impulsive mindset. Also, don’t deprive yourself of having fun during your no spend challenge. Instead, seek out more affordable means of entertainment, like free concerts in the community park. Treating yourself to these fun activities helps keep you sane and makes the challenge more likely to succeed.

Finally, start small. One of the biggest mistakes people make when embarking upon a no spend challenge is limiting themselves too much. This is especially true for those who’ve never done a no spend challenge before and may be shocked to find out how difficult it can be. Allow yourself flexibility when starting a no spend challenge, such as budgeting $100 each week for unessential items. This little bit of leeway makes transitioning into this “no spend” mindset easier and helps you adapt to a more frugal lifestyle.