The no-spend month challenge has been a trending New Year’s resolution for the last few years, but it’s been around since the mid-2010s. A no-spend challenge involves stopping all unnecessary spending to either fast-track savings goals, realign your budget or see where your extra money goes.
The no-spend challenge involves picking a month where you don’t spend money on anything unnecessary for that entire month. For most people, this means not spending money on going out to restaurants, clothes shopping, non-essential home improvements, hobbies and so on.
While the name “no-spend” implies you won’t spend any cash at all, your living expenses aren’t part of it. Essential things to leave out of a no-spend month include:
Feel free to customize the rules of your no-spend challenge. You can set some exceptions, such as allowing streaming services, gym memberships or gifts for people on birthdays or holidays.
And if an entire month feels too long or daunting, consider just trying a no-spend day or week.
Do we need a reason to cut back on frivolous spending for a whole month? Yes, sometimes we do. Here are five reasons to take on the no-spend month challenge:
Starting the no-spend month can be a great way to prioritize your savings goals and let you know how much you can really save each month if you halt your extra spending.
Are you preparing to go on a vacation soon? Need to refill or start an emergency fund? Want to recover your budget from holiday shopping? A no-spend month can help you fast-track those goals.
A no-spend month is a great way to reset your budget. And if you don’t have a budget at all, there’s no better time than a no-spend month to create one.
By not spending any “fun” money, you’ll have a solid baseline on how much you currently need each month to cover essentials. And at the end of the month, any leftover money is what you can afford to save or spend on wants.
If you’re like most people, you likely do a lot of shopping online, whether it’s ordering on Amazon, DoorDash or clothing sites. With a no-spend month, that’s less time you’ll likely spend on screens and scrolling through shopping and food apps since you’re “prohibited” from buying extra stuff.
You might also be someone who absentmindedly checks out sales or shopping sites when you’re bored, but a no-spend challenge could help you identify and drop that habit.
A no-spend month means you’re not bringing new items into your home that can clutter up your space, like books, kitchen tools, shoes, home decor or craft supplies.
Take advantage of your no-spend month to clean out your closet, junk drawer, garage and kitchen. It’s much easier to declutter when you’re not buying new things and refilling the space.
And if the holidays are around the corner, consider donating those gently used clothes, shoes, toys and dishware. You could even hold a garage sale or sell items to get some extra money during your no-spend month!
We’ve all got a guilty pleasure that we spend too much money on — mine is craft supplies. With a no-spend month, you can identify your big spending pain points, whether that be ordering takeout, makeup, video games, audiobooks or gas-station goodies.
Use a no-spend month to see how much money you’ve saved by not indulging in those extras. You might surprise yourself.
Instead of just cutting out all your unnecessary spending for an entire month, you can simply choose one or two categories to stop spending on for the month.
For example, you can do a “no eating out” month, where you make all your meals at home for the month to reduce spending at restaurants. Or if you have a lot of expensive hobbies, you can try a “no hobby spending month,” where you don’t buy new supplies for that hobby.
If you take on the no-spend month challenge, set yourself up for success and modify the challenge as you need to. And remember: essential living expenses don’t count!
Need someplace to store your hard-earned savings after completing the challenge? Check out high-yield savings accounts that can grow your balances passively.
The BNPL app Klarna has a new savings account that can earn up to 3.78% APY, but you’ll need the highest membership tier to get that rate.
Smartypig may have a silly name, but this goal-tracking savings account has a competitive APY and no monthly fees.
A look at the TAB Bank high-yield savings account and what customers say about it.
Earn up to 6% with Greenlight, 5% with Varo and just under 5% with Barclays, Western Alliance, Uphold, Wealthfront and more.
These international banks offer accounts with 12% APYs or higher, but watch out for risks.
The Ponce Bank high-yield money market account offers up to 0.20% APY, but earning even that rate requires a high balance. Look elsewhere.
The Affinity SmartStart Savings account earns up to 2.65% APY, depending on your balance. But you’ll need to join the credit union first.
The Varo savings account is a no-fee savings account with up to 3.75% APY, but you need the Varo checking account to get it.
Chime’s savings account has a solid APY and has no monthly fees, but it requires Chime’s checking account.
Compare some of the best high-yield savings accounts available.