How to Do a No-Spend Challenge

What Is a No-Spend Challenge?

A no-spend challenge is when you commit to spending money on nothing but essentials, such as groceries, housing expenses, bills and gas. You can use a no-spend challenge to reset your spending by delaying or forgoing unnecessary purchases. The point of a no-spend challenge is to save money and build new habits.

A no-spend challenge can be as long or as short as you want it to be. Some people shoot for an entire month of no discretionary spending, while others opt for the smaller goal of a week or a weekend without spending.

Benefits of a No-Spend Challenge

The core objective of a no-spend challenge is to free up funds you can then use to put toward your goals. There are other, less obvious benefits as well. Here’s why you might want to try your hand at a no-spend challenge:

• Recalibrate your budget. If you recently went over budget, a no-spend challenge could be an opportunity to replenish funds and get back on track. Being too restrictive with your budget risks frustration and burnout, but challenging yourself for a set period of time can be a fun and rewarding exercise.
• Accelerate your savings. Spending less leaves you with more funds to direct toward your financial goals. For example, if you’re saving for a down payment on a house or another saving goal, freeing up spare funds can help you bolster your savings.
• Pay down debt. Saving more money can help you get out of debt faster. Plus, a no-spend challenge could inspire you to adjust your spending habits for the long haul and avoid unnecessary debt down the road.
• Up your retirement contributions. A no-spend challenge could be the catalyst for long-term reductions in spending. That, in turn, could open the door to investing more for the future. Slightly increasing your retirement contributions can have a noticeable impact on your retirement savings. For example, according to Fidelity, a 35-year-old with a salary of $60,000 a year could invest just 1% more, or $12 per week, and end up with $85,492 more to spend in retirement.

How to Complete a No-Spend Challenge

No-spend challenges are fully customizable, which means you get to make your own rules. Here are the basic steps to designing your own no-spend challenge:

1. Create a Goal

You’ll start by deciding how long you’ll cut spending. Some people start with a weekend or a week, while others embrace an entire month of zero discretionary spending.

On top of setting a period for your challenge, get specific on how strict you’ll be. The goal of a no-spend challenge is to cut all nonessential spending, but some purchases blur the line. For example, do prepared foods from the grocery store count as eating out? Will you still pay for streaming subscriptions?

You can also set up your challenge to target specific areas of overspending. If you’ve found that you tend to spend a lot on dining out, you could commit to no spending in that category by only cooking at home for a week. If you struggle with online shopping, you could commit to going one full month without buying anything online.

2. Plan Ahead

Get ready before the challenge by researching free things to do near you. Check out resources from your library, see what’s free to stream, bake your favorite treats at home, throw on a yoga video or go for a hike.

Caving in and ordering takeout in a pinch could quickly derail your no-spend challenge. Plan ahead with easy recipes you can cook at home, and then ensure that you have everything you need in your pantry or fridge to make those meals. Some people find that prepping their meals for the week ahead prevents them from resorting to delivery in a moment of temptation.

3. Stay Motivated

Here are a few ways you can stay motivated during a no-spend challenge:

• Find accountability. Sharing your goal with others may motivate you to stick with it. Finding a financial accountability group or including other members of your household could help you find support.
• Remember the big picture. Stay clear on your reasons for wanting to cut spending. Do you want to tackle debt? Save for a home? Afford a vacation? Knowing your “why” will help you combat the temptation to quit.
• Reward yourself. Find extra encouragement by planning inexpensive ways to treat yourself. You could pamper yourself at home, try out a new recipe or go out for a latte, for example.

Learn more >> Ways to Treat Yourself Without Breaking Your Budget

5. Track Your Progress

Seeing how far you’ve come can help you stay motivated. Try using a countdown app on your phone or a printout to help you visualize your progress in real time. During a no-spend challenge and beyond, you can also track your spending with a budgeting app.

Does the No-Spend Challenge Work?

Completing a no-spend challenge can be an effective way to reset your finances and save money for a set period. But it’s best to think of a no-spend challenge as a temporary push, rather than a sustainable way to budget.

If you’re too strict with your spending, you could burn out. That can actually lead to spending more than you otherwise would have.

That said, as a temporary measure, a no-spend challenge can leave you with more in the bank. Plus, it may inspire you to keep exploring thrifty habits and shift your mindset about how much you need to budget for entertainment, dining and shopping moving forward.

The Bottom Line

A no-spend challenge can help you refresh your budget and get on track financially by saving more toward your goals or paying off debt. On top of working on improving your finances, add monitoring your credit into your plan for increasing your overall financial health. You can monitor your credit for free through Experian, and you’ll also receive personalized suggestions for how to improve your score.