Can You Handle a No-Spend Challenge?
You’re always up for a challenge. You’re the type of person to sign up for a marathon that’s only a few months away or to jump into a new hobby in hopes of becoming an expert by the end of the year. You’re more than a little determined.
So, do you think you could handle a no-spend challenge?
The No-Spend Challenge
The no-spend challenge is a self-imposed financial test that you can put yourself through. It can last a day, a weekend, a week or even more — you set the term limits. It’s better to start small with a single day and then extend the terms as you go on. But if you’d rather jump into the deep end right away, you can set yourself a major goal (for example, a month) from the get-go.
What happens in a no-spend challenge? You don’t spend money on anything non-essential. You will obviously have to spend money on essentials like your mortgage/rent, insurance, groceries and utility bills, but you can’t spend on anything else.
Non-Essentials to Skip in the Challenge
In this challenge, you’re trying to push yourself not to buy anything that you don’t have to buy. You want to save your money to the best of your abilities. You’re trying to be as restrictive as possible.
What are some non-essentials that you can skip?
- Coffee Shop Trips
- Drive-Thru Meals
- Rideshare Trips
- Lottery Tickets
- Movie Tickets
- Concert Tickets
- Hobby Items
- Home Decor
- Beauty/Grooming Treatments
- Beauty/Grooming Products
Essentially, you should avoid any purchase that isn’t necessary to maintain your general well-being. You may not be able to go long without buying groceries, but you can last a month without buying home décor or getting your nails done.
The Reasons for Doing a No-Spend Challenge
Taking on a no-spend challenge can help you collect a lot of savings in a very short period of time. Once the challenge is over, you can put all of those hard-earned savings to good use, like building up an emergency fund from scratch.
Living without an emergency fund is not a wise decision. Without an emergency fund, you might not be able to afford an urgent expense that falls into your lap. Using the money sitting in your checking account to cover the expense could cause a terrible domino effect. After making the payment, you might not have enough to cover your usual bills and other budgetary needs. You could get a series of late penalties and NSF fees. And you could put your entire account into overdraft.
Without enough savings available, it might be wiser to borrow funds through an online loan to cover your emergency expense. You can look into borrowing options close to your home— as long as you meet the eligibility requirements for the loan, of course. With an approved online loan, you could manage the expense in a short amount of time and then focus on a straightforward repayment plan soon afterward.
Obviously, using an emergency fund will be easier than using a loan. So, you should start building one right away. Add your savings from your no-spend challenge to a separate savings account. Try to top up the account balance every single month. Eventually, you’ll have a very reliable safety net on hand.
If you have a bad habit of making impulse purchases whenever you go out, a no-spend challenge could help you break this habit. The challenge forces you to be mindful of your shopping, whether that shopping is in person or online. You will have to restrain yourself from wasting your money on items that you don’t need.
It can also stop you from emotional spending (sometimes called retail therapy). Emotional spending is when you make unnecessary purchases to cope with overwhelming feelings like stress, sadness and boredom. During the challenge, you can get into the habit of using healthy coping mechanisms to get through tough feelings instead.
So, are you ready to put your wallet to the test? Try the no-spend challenge!