Should you try a 'no-spend' month?
Author: Becca Stanek
Source: The Week US
Amid rising costs and record high levels of consumer debt, the idea of hitting pause on spending, at least for a little while, seems to be gaining traction. Recently, the no-spend month — essentially a month-long period where you don't spend at all, outside of the essentials — has become "the latest money-saving trend taking over" on TikTok, said CNBC.
The challenge is not only a "great way to pause unnecessary spending," but it can also "help you reset your mindset on your spending habits," said Bankrate. But for some, said CNBC, "even the best intentions can backfire."
What are the rules of a no-spend month?
During a no-spend month, you stop spending money on anything other than what you absolutely need to live. Long-standing monthly expenses such as mortgages, utility bills, insurance, and cell phone bills are still allowed, the same goes for medications and groceries.
What is banned is anything that falls outside of those categories. Generally, the types of categories that fall on the no-spend list include meals out, alcohol, clothing, entertainment, and impulse purchases. Ideally you will take the money you would have spent there and put it toward a long-term financial goal.
Are there any drawbacks to a no-spend month?
While challenging yourself to avoid spending can motivate some people, it can quickly go south for others. Researchers have found that the no-spend month has a similar success rate as New Year's resolutions.
No spenders also run the risk of splurging or "doom spending" once the month is up. Some may feel tempted to make extravagant purchases to reward themselves for completing the challenge.
How can you set yourself up for success with spending less?
To make your no-spend month a success, it's smart to get specific about why you are doing it, what your rules are, and how you will resist temptation.
For instance, it is "helpful to have a specific goal," such as "building an emergency fund, or saving for something in particular, an event, maybe, or weekend away," said The Guardian, "rather than setting yourself an impossible target."
Similarly, it is good to plan and make sure your rules are actually realistic. Make note of any pre-planned events or activities coming up so you can decide how you want to spend around them. It also helps to brainstorm alternatives for enjoyment so you don't end up feeling deprived — for example, "you could explore free events in your area, community gardens or online courses," or you might plan to "start do-it-yourself projects to develop new skills," said the article.
Lastly, do not forget to check in with yourself along the way and reflect on what the challenge reveals about your spending. When you start paying more attention to your financial habits, said The Guardian, "you might be surprised how often impulse spending kicks in over just one day, particularly when you're tired, stressed or distracted." You might even recognize that "you have fallen into a routine of buying a particular thing that you can actually live without."
This article was written by Becca Stanek and The Week Us from The Week US and was legally licensed through the DiveMarketplace by Industry Dive. Please direct all licensing questions to legal@industrydive.com.
