You’re always up for a challenge. You like to test your limits and push yourself to improve. So, why not take on a no-spend challenge to give your budget a nice boost?
The No-Spend Challenge
The No-Spend Challenge is a personal challenge where you try not to spend any more money than you absolutely need to. You are still allowed to spend your money on essential expenses — these are expenses that you cannot afford to ignore, like housing payments, utility bills, groceries and fuel for your car. You are also allowed to pay for emergency expenses that crop up out of the blue, like when you need to hire a professional plumber to thaw a frozen water pipe.
The no-spend challenge encourages you to stop spending money on non-essentials that you can technically survive without. These are just some of the examples of what you can skip during this challenge:
- Eating out at restaurants
- Ordering food delivery
- Shopping for new clothes
- Going out for coffee
- Going out to the movie theater
- Getting salon treatments
- Buying concert tickets
- Taking rideshares or taxis
- Buying bottled water
- Making impulse purchases
You might be shocked at how all of this casual spending dwindled your budget. Avoiding all of these expenses for a short period of time could help you keep a significant amount of money in your wallet.
Before you start your challenge, go through your bank statements and credit card statements to see what your usual expenses are. Do you notice any of the examples above? Have you spotted that you get a drink from your favorite coffee shop at least 3 times a week? Or that you order takeout every single weekend? This could give you an idea of what you can sacrifice for your financial fast.
How Long Should You Do the No-Spend Challenge?
It’s up to you! You can do it for a week, two weeks, a month — or even longer if you feel like you really need to collect savings. However, it’s not the wisest decision to jump into the deep end of this financial challenge if you’ve never done it before. Start by dipping your toe in and trying the challenge for a weekend. See how you feel about the experience before you increase your deadline.
What Should You Do with the Savings?
If you do a no-spend challenge for longer than two days, you might find yourself with a whole lot of savings. In that case, you should use those savings to improve your finances.
The best way to do that is to turn those savings into an emergency fund. An emergency fund is a crucial safety net that you can rely on when you get hit with an urgent and unplanned expense. You can withdraw the necessary savings from your emergency fund to pay off the expense right away.
Without an emergency fund, you might not have enough in your budget to cover an urgent expense. You might have to look into an alternative method for handling the emergency, like applying for loans over the phone in hopes of getting access to funds in a hurry. As long as you meet all of the loan requirements, you could fill out an application. You just might get approved!
If you get approved for a loan, you can use the borrowed funds to manage the emergency expense right away. Afterward, you can focus on repaying the loan through a steady billing cycle. While loans are effective backup plans, you’re better off using personal savings to cover emergency expenses. So, use your extra savings to build your emergency fund.
You could improve your finances in a hurry with the no-spend challenge. It’s time to put your wallet away!