What is a No Spend Challenge and how do you do it?
People dedicate a month (e.g FebFast or Nospendver) to doing a No Spend Challenge. I’ve done a few when I feel my spending has started to get out of control. It really helps you evaluate what you are spending your money on and change those habits.
So what is a No Spend Challenge? How do you do it when you have regular expenses that cannot stop such as rent, groceries etc?
I’ve done a few No Spend Challenges and they can really make a difference. Here is how I do them, my tips and the difference it makes for us. Plus I will share the one we are doing this time with stricter rules.
Disclosure – this post may contain affiliate links.
What is a No Spend Challenge?
A challenge where you don’t spend money on anything other than essentials. For example, all bills get paid but you can’t go on a spending spree for clothing. Groceries are still purchased but don’t get all the junk and treats or impulse buys. It helps you see where you a blowing your budget and can often help break bad habits.
For some people, this is their daily life, I know, I’ve been there. Years ago, I was completely reliant on Centrelink as a single mother. In 2020, in Honaira, Solomon Islands, my income had dropped by 70% due to the issues around the world and my websites being hacked. We couldn’t access Centrelink as we were out of the country.
So our budget was tight and we lived the No Spend Challenge because we HAD to. There was no spare money for anything. Yet, our lifestyle was still expat, not fully local so there were ways we could have cut back but didn’t due to safety.
My point is, a No Spend Challenge might not be for everyone but it is worth a try as you never know where you might be accidentally blowing some money.
No Spend Challenge Rules
It is your choice how you do this part. Personally, I am fairly strict but how you choose to do it is up to you. Here are my rules:
Only spend on essentials including rent, internet, electricity, phones and similar bills.
No extra treats in groceries.
All family activities and hobbies must be free this month.
No alcohol or sweet drinks in general. Water only.
If anything breaks, try to fix it first or go without. Budget in the replacement but don’t replace it yet if it can be avoided.
My Specific No Spend Challenge Rules
Food tends to be the area our spending blows out first. When we are good, we do it on a tight budget. Busy lifestyles, distractions etc cause it to get way too high.
I shared 21 tips to reduce the cost of groceries in 2022 to combat this.
A few other things I do during our No Spend Challenges:
Use the whiteboard. We bought one to organise ourselves, our chores, groceries, everything. Getting the family to write on there when we run out of something or pin school notes to the corkboard side helps a lot.
No treats. At times I was addicted to V energy drink (read how to quit energy drinks here) and we drink alcohol plus whenever I went to the shops with my kids they got a treat. Cutting energy drinks, alcohol and those little treats is always part of my No Spend Challenge. And usually, they do not return for some time.
Free entertainment. All other entertainment must be free for the duration of the challenge
DIY beauty which I do most of the time anyway. Check out 7 tips for beauty on a budget.
Delayed gratification. Anything we want goes on a list and needs to wait. If things break, fix it or wait to replace it and shop around unless it cannot wait.
How to Stop Spending
This is the hardest part for many. I wrote 10 tips to help you stop spending. A few things that helped me were starting a delayed gratification list, avoiding the shops and unsubscribing to all emails.
The delayed gratification list is where I write all the things I want then leave it for 30 days. At the end of 30 days I can review the list and if I still want those things, I will budget it in.
How to Avoid Temptation
Temptation can be everywhere. So whatever you decide to give up, avoid it or work out a compromise if you need to for parties or social events but for the most part, try to change your habits this month.
If drinking is a big thing in your social circles, consider trying 0% beers and other drink options. The taste is the same, the look is the same so you will fit in but it is typically cheaper plus no alcohol so you will feel better.
Read 5 tips to deal temptation for more help.
Transfer the Temptation
An extra thing I do is transfer the amount when I am tempted. For example, if I was going to spend $30 on something but put it back, I transfer that $30 to debt, savings or investing because I would have spent it anyway.
You see, not spending is one thing, actually saving what you aren’t spending is another. It is interesting to see the difference at the end of a month.
My No Spend Challenge Experiences
As mentioned, I have done this a few times. Sometimes out of necessity such as when we were locked down in the Solomon Islands or when I was a single mother. Other times, I have done it because our income was much higher and we were absolutely wasting it.
When I did it out of necessity, it was interesting to see there were still a few gaps at times in my spending which I could fix.
Doing it in the Solomon Islands was the most eye-opening. Due to the pandemic, Cyclone Harold and business issues, we didn’t have much. We shopped locally, ate local food such as taro, ferns and similar, lived like locals and saved what we could as we knew we’d need to pay for repatriation.
Other times, when we have had significant incomes and it was done purely to evaluate our spending, I was shocked. With 2 incomes and living right in the city of Melbourne, we wasted so much money, especially on takeout. We identified thousands in wasteful spending over a few months.
No Spend Challenge Now
Now, I live a fairly free life in Noosa, a wealthy area but still do No Spend Challenges at times. For example, last year we applied for a residency visa for Justin and his commercial diving course (Over $40,000 for those two combined).
When we do one, our whole family is involved and we are usually doing it for a specific goal. With teenagers, I feel it’s important to teach them these skills and be open about money.
In the next few months, we have around $25,000 worth of extra expenses. To do this, we are doing a combination of a No Spend Challenge and a Make Money Challenge. Meaning, living frugally while looking at every opportunity to make more.