How to Succeed a No-Spend Challenge

SHORT ANSWER: A no-spend challenge can help you reset your budget and save more. Personalization can make it doable for most families. 

If you’ve spent time on TikTok or Instagram, chances are you’ve seen the no-spend challenge. While no-spend challenges have existed for ages, January 2024 TikTok trends gave it new life. 

If you’ve recently finished your taxes and are considering how to save more this year, it could be time for a no-spend challenge. While a no-spend challenge is a bit like a fast where you don’t buy anything but the basics, it can also be a launchpad to take control of your budget. Read on for tips to build your own no-spend challenge to help you hit financial goals without feeling deprived. 

What is the No-Spend Challenge?

A no-spend challenge is when you choose not to spend money on non-essentials for a set period. That could be a month, a few months or a year. You’ll still have to spend money on essentials like housing, food, transportation and medical care. The goal of this challenge is to limit your spending to basic living expenses or certain other allowed expenses to save money.

This process can help you take control of your budget, be more mindful of impulse purchases and find creative ways to use or reuse what you already have. Depending on the limits you set for yourself, your challenge could include skipping the coffee shop or Uber Eats delivery or could extend to clothing, entertainment and other non-essentials.

Each family will have different definitions of essentials and non-essentials, and that’s better, as defining the parameters for your lifestyle can help you stick with it. How long you plan to do the no-spend challenge will also affect how extreme your limits are. 

If you only plan to do a one- to two-week no-spend challenge, you could set very strict parameters that only allow for the bare minimum and even encourage you to shop in your pantry before grocery shopping.

On the other hand, if you embark on a multi-month no-spend challenge, you may want to allow a certain amount for occasional non-essentials or to replace certain clothing items (especially if you have kids). You can still set limits. 

For example, you could replace your children’s uniforms if they are too damaged or buy them a set number of new (or used) outfits for the new season if they’ve outgrown their clothes. But you’d be conscious about the purchases and budget and wouldn’t just keep picking up clothes because they’re cute. 

The No-Spend Challenge Rules

Officially, the rules of a no-spend challenge are simple: you only buy the essentials and forgo all non-essentials for however long you do the challenge. But there are gray areas. Yes, you can buy groceries, but do you need ice cream, chips or extra protein bars? Maybe you throw in a few extras at the grocery store, like nail polish, makeup or a new face wash. Did you break the no-spend challenge? That depends on your personal rules.

While you can adjust the rules to fit your family and lifestyle, having a standard baseline is good starting point. Here are the general guidelines.

Allowed Expenses

• Housing: Housing costs, including rent or mortgage payment, insurance, taxes and utilities are basics that won't change during the challenge.
• Food: Food that is nutritious, and generally, made at home is allowed. If you purchase water, this is, of course, allowed. Not sure how much you should spend? Find a guide for how much to spend on groceries. 
• Medical care: Healthcare including insurance, doctor visits, dentist visits and medications or medical equipment and any other medically necessary treatments are allowed.
• Transportation: The cost of auto insurance, gas, car repairs or maintenance and public transportation are includable expenses.
• Education: If you pay for your children’s education or your own, those expenses are deemed essential and won’t change during the challenge.

Expenses not allowed:

• Eating out
• Impulse purchases that don’t fall into the above four categories
• Clothing, cosmetics, entertainment or other extras

You generally want to avoid treats, extras and impulse purchases during the challenge. The idea is to give yourself a reset or spending fast so that you enjoy the extra purchases you make after the challenge. 

Benefits of a No-Spend Challenge

The benefits of a no-spend challenge include finding extra money you were spending on purchases you didn’t value and saving more. It’s a way to take control of your finances and maximize what you have. 

Benefits include:

• Appreciate what you buy: People often become so accustomed to impulse purchases that they jump from one thing to the next without appreciating what they bought. A no-spend challenge cuts that cycle.
• Save more: One big reason to do a no-spend challenge is to hit savings goals for retirement, a home down payment or other big goals. Even an extra $500 per month can go a long way toward a comfortable retirement if you make savings a habit. You could pay off high interest debt, create an emergency fund or make savings a bigger part of your financial planning. 
• Readjust your budget: Like a digital detox or a juice fast, a no-spend challenge can be a way to reset your budget. You’ll be able to see the purchases you value. Long term, this can make hitting other financial goals easier. 
• Feel empowered: Knowing you can survive — and thrive — with the bare minimum is empowering. By breaking the cycle of consumerism, you might find new free activities you love, regain quality time with your family or know that you can make extra space in your budget when you need it.  

How to Succeed in a No-Spend Challenge

Adaptations to fit your lifestyle can increase your chances of success on a no-spend challenge. A pure no-spend challenge doesn’t allow for extras, but with some personalization, you can set yourself up for success. 

For example, you might give yourself one date night a month (or a week) or have a set entertainment or clothing budget. This can be helpful, especially if you want to do the no-spend challenge long-term. For example, you might give yourself $150 monthly in discretionary funds, even during the challenge. The steps for a successful no-spend challenge are:

1. Set the Rules

Decide whether you’ll stick to the basics or give yourself certain discretionary funds. For example, you would still pay for your children’s extracurricular activities. You can also give yourself a discretionary fund or a reward for each month you stick to the no-spend challenge. Need more help? Learn how to stop spending money. 

2. Get Everyone on Board

Before starting the no-spend challenge, enlist the support and agreement of your family. To increase motivation, you can set a prize for the whole family if you stick with it. Silly awards for creative free activities, pantry meals or other frugal solutions can make the challenge more fun. 

3. Get Support

If you have a friend who wants to join you in the challenge, the support can help keep motivation high and could make finding free activities easier. If you don't have local friends, consider reaching out to your online network or joining a no-spend challenge online group. 

Consider unsubscribing from marketing emails. You can also use expense tracking apps, or budgeting apps to track where your funds are going. 

4. Define Your Success

While you might want to stick to your rules 100% of the time, even an 80% change could be a huge success. For example, if you were eating out five days per week and cut back to once a week, give yourself credit for the no-spend challenge and celebrate your success.

5. Don’t Give Up

Don't give up if you slip up one day or a week. Start fresh the next day. Remember that the no-spend challenge is about shifting long-term habits, which can be a gradual, rarely linear process. Your challenge is successful if you keep trying and adjusting your lifestyle over time to find a sustainable balance. 

Should You Do a No-Spending Challenge?

Yes! If a no-spending challenge seems too overwhelming, start with a mini-challenge over a weekend or one week. You can work your way up to one month or longer. A no-spend challenge can be a great reset, but you’ll increase your chances of success by personalizing the challenge to your family and lifestyle. Remember to define your own success and keep going. Over time, you’ll build habits that can help you save an extra $50- or $2,000-plus each month. 

Once you're in the habit of saving, you'll want your money to work for you. You can find the best high-yield savings accounts or learn which credit cards to pay off first. You can also consider working with a financial advisor to optimize your savings and investing or implement the 50-30-20 budget. Remember to keep learning and having fun — consistency long-term is the key.