How to Do a No-Spend Challenge - Experian (2024)

What Is a No-Spend Challenge?

A no-spend challenge is when you commit to spending money on nothing but essentials, such as groceries, housing expenses, bills and gas. You can use a no-spend challenge to reset your spending by delaying or forgoing unnecessary purchases. At the end of a successful no-spend challenge, you'll be left with more money you can put toward savings.

No-spend challenges should be customized to fit your goals. For example, you might schedule an entire month of zero discretionary spending or opt for the smaller goal of going one weekend without buying anything.

You can also set up your challenge to target specific areas of overspending. If you've found that much of your budget goes toward dining out, you could commit to no spending in that category by only cooking at home for a week. If you struggle with online shopping, you could commit to going one full month without ordering anything online unless you need it.

Benefits of a No-Spend Challenge

The core objective of a no-spend challenge is to free up funds you can then use to put toward your goals. There are other, less obvious benefits as well. Here's why you should try your hand at a no-spend challenge:

• Recalibrate your budget. If overspending is a problem for you, you can replenish your cash reserves and get back on track with your budget by bringing all discretionary spending down to zero. Being too restrictive with your budget risks frustration and burnout, but challenging yourself for a set period of time can be a fun and rewarding exercise.
• Accelerate your savings. Reining in your spending will leave you with more funds to direct toward meeting your goals. If you're saving for a down payment on a house or another saving goal, freeing up spare funds can help you bolster your savings.
• Pay down debt. If you are trying to aggressively pay down high-interest debt, a no-spend challenge can help you make larger payments toward your balance—plus help you adjust your spending habits to avoid taking on any more consumer debt.
• Up your retirement contributions. Slightly increasing your retirement contributions can have a noticeable impact on your retirement savings. For example, according to Fidelity, a 35-year-old with a salary of $60,000 a year could invest just 1% more, or $12 per week, and end up with $85,492 more to spend in retirement. You can use a no-spend challenge to see what you can learn from a cheaper lifestyle and then adjust your contributions accordingly.

How to Plan Your No-Spend Challenge

No-spend challenges are fully customizable, which means you get to make your own rules. Here are the basic steps to designing your own no-spend challenge:

1. Create a Goal

You'll start by deciding how long you'll cut spending. Some people start with a weekend or a week, while others embrace an entire month of zero discretionary spending.

On top of setting a period for your challenge, get specific on how strict you'll be. Will you limit your grocery trips to bare essentials? Will you still purchase alcohol? Will you still pay for streaming subscriptions? Be sure to set realistic goals by balancing what's challenging with what's manageable for you. Setting impossible-to-meet goals risks hurting your motivation.

2. Create a Meal Plan

Necessary expenses such as your utilities and housing costs won't change, but food costs can vary greatly. Ordering takeout in a pinch could quickly derail your no-spend challenge, so it's critical to plan out what you'll eat beforehand.

Find easy recipes you can cook at home, and then ensure that you have everything you need in your pantry or fridge to make those meals. Some people find that prepping their meals for the week ahead prevents them from resorting to delivery in a moment of temptation.

3. Plan for Entertainment

Look for no-cost ways to treat yourself, and create a bank of activities to choose from before you start your challenge.

Check out resources from your library, see what's free to stream, bake your favorite treats at home, throw on a yoga video or go for a hike. You'll be less likely to splurge if you fill your time with free pleasures.

Need Some Help Completing a No-Spend Challenge?

These tips can help you stay on track:

• Find someone to keep you accountable. You can stay motivated to complete your challenge by telling other people about your goal. You might rope in your whole household, post to a financial accountability support group on social media or recruit your friends to try the challenge with you. That way, you can share your successes and struggles as you go.
• Track your progress. Seeing your progress in real time can help you stay motivated. Try using a free online printable or downloading a countdown app on your phone. You can also track your spending using a budgeting app.
• Focus on the big picture. Start your no-spend challenge with a long-term vision, such as tackling debt, saving for a down payment on a home or taking a summer vacation. Having a clear "why" will help you combat the temptation to quit when you find yourself craving a splurge.
• Come up with a reward. While it might be counterproductive to indulge in an expensive treat for completing a challenge, find something proportional to the savings you've amassed over the course of your zero-spend period. If you complete a no-spend month, something like a pedicure or a meal out may be appropriate. If you complete a no-spend weekend, maybe you treat yourself to your favorite ice cream or take yourself to see a movie.