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A “no-spend” challenge is a common hack to help get spending under control. You commit to spending no money except a predetermined list of essentials, usually routine groceries, gas for the car, the usual monthly bills (utilities, rent/mortgage, etc.) and maybe one or two important, prespecified items (e.g. $50 for Mom’s birthday gift, etc.)
But why are no-spend challenges so commonly prescribed? What makes them work – or not? And is a designated ban on spending for a time a good choice for you?
At face value, a no-spend month (or any other time period) seems like a way to put a full stop all your worst spending habits and, instead, pay down one of the credit cards or stuff cash back into your famished savings. Not bad goals. But short term.
In my experience, a no-spend month is more about creating awareness. Awareness that you can carry forward into all the forthcoming months so your period of committed sacrifice pays off into something that compounds over time.
To do this well, simply write down everything that pops up that you are not buying. I even go so far as to call this a “to buy later” list, which gives your brain that gratification of getting something it wants (“Eee, she’s gonna get it for me!”), but doesn’t involve actually parting with any money.
But here’s the trick. Obviously, a no-spend March would be absolutely fruitless if you just load up your Amazon cart all month long and then click Buy Now on all those goods come April 1. Technically you followed the rules, but this approach won’t do anything useful for you.
But if you load up that “to buy later” list (and Amazon cart) all month long and then take time to review all that stuff with your scientist hat on, it can be very revealing. Which items were a necessity three weeks ago, but to stay true to the darn challenge, you waited on… and now don’t seem needed at all? Which items seemed like a great idea last week, but you now view as just more clutter to shuffle around? And more delay on the big picture financial goals that matter way more?
This evaluation of what you didn’t buy is what can make a no-spend period really worthwhile. You learn how false many of those “needs” and “urges” really are inside your very own head. And that weakens their strength next time.
With this lesson now deeply engrained, I rarely do no-spend months anymore. I’ve simply built the permanent habit of waiting on almost everything I ever want to buy instead. Because it’s the delay followed by an evaluation that makes a difference in your long-term level of spending. That’s much more powerful than one month of pared down spending so you could pay down the credit card, just to have it fill back up again.
We must consult our means rather than our wishes.
George Washington
Beware of little expenses. A small leak will sink a great ship.
Benjamin Franklin
Tough times never last, but tough people do.
Robert H. Schuller
I hope you enjoyed this edition of Under 2, an email series designed to share quick bites of wisdom to empower your financial journey (while challenging me to keep it short).
All for now,
Lindsey