I have been wanting to try a no spend month for a while now as a challenge for myself both financially and mentally. I actually put it in my 2020 goals back in January this year. So with everyone already quarantined and most places shut down due to COVID-19, I figured now was as good of a time as any to give it a shot and I actually think it went pretty well.
So What is It?
It’s exactly as it sounds. It’s an attempt to spend as little money as possible for 30 days. You are allowed to spend money during this timeframe but you are trying to limit this spending to only basic needs for the month.
So Why Would Someone Do This?
Well the obvious reason is to save money. If attempting this challenge saves $500 that month, that’s $500 more dollars to use to pay off debt or invest. But that is a very simplistic view of this concept.
Bigger Picture
In the bigger picture, by making something a challenge first, it can motivate you to try something outside of your normal routine or comfort zone. For myself personally, I know that at times I can be very externally motivated. So making something a “challenge”, motivates me to grind away at it when normally it may not have been something I would self impose on myself.
Obviously we all want to be internally motivated to make any changes in our lives, but oftentimes it can take challenges like this to be the catalyst necessary to begin this transition. Look no further than the fitness industry to see countless more examples of this concept.
It’s hard to be intrinsically motivated to increase your savings rate or invest when you have never felt what it’s like to do so in the first place.
That’s where a no spend month comes into play. By challenging yourself for one month to see how much money you can save, you are casting a vote inside of yourself to become a saver. Even if this is a forced thing for the time being.
Then, once you see the results of the challenge, you often can begin to see the potential for how positive these changes could be for the long term. You are using these forced results to help break some of your bad spending habits and create some internal motivation.
Biggest Picture
If we step back even further, we can understand that it is impossible to sustain a savings rate that likely will be the result of this challenge. Although it would be amazing to save that much more, it’s unrealistic to only spend on needs. Most of us would go crazy.
We all buy things for a plethora of reasons, but how many of those things actually have a positive, lasting effect on our overall happiness?
So instead of trying to pinpoint which purchases actually had a true effect on our happiness, we are cutting all of them. By cutting any purchase not related to survival, we are starting over back at zero or baseline in our spending habits. A place that most of us have not experienced for years…
And you may be saying, “why would I cut things that I think bring me happiness, wouldn’t that be essential?”
Which I would agree with, but the problem is, we don’t actually know which purchases were making you happy. You may routinely eat out 1x per week, get a daily coffee, go to the movies, party, golf, buy new clothes, or travel and as a net result you are happy. But which of these brought you happiness?
It could be all of them, but in reality, you may find that you would be just as happy with only a couple of the things from the list.
All you know is that you are happy, and you are associating that happiness with spending habits that may not actually reflect what was bringing you happiness.
Maybe you were really making those purchases because you were lazy, bored, sad, or just stuck in a routine.
By doing a no spend month, you are essentially cutting all of your spending fluff and then assessing your happiness from there.
Now, we can see what it was that we truly valued and missed. It’s not done to cut everything we enjoy out forever, it’s done to fairly assess what it was that actually brought us happiness. Now, we can start to slowly add these things back in the upcoming month.
I think, what you may find, is that you’ll end up adding back much less than what you originally cut in the beginning of the no spend month.
What you did was cut the excess. You still maintained your same level of happiness, but you cut the waste. Which saves you money, yes, but ultimately, it helps you to declutter your life of both physical AND mental waste.
This is the true reason I think it’s important to do a no spend month.
My No Spend Month
I did my no spend month in April, 2020 as quarantine was in full effect during this time frame. Below are the results.
Spend:
- Housing: $200
- Loans: $300
- Transportation: $165.53
- Groceries: $555.49
- Other: $60.70
- Total: $1,281.82
Now the groceries may seem excessive, but this year I recently started paying for both my girlfriend and myself as she is still in school. So when divided in half, the monthly amount is much more reasonable.
How Much Did I Save:
- No Spend Month Savings Rate: 79.1%
- 2019 Savings Rate: 64.6%
- Difference: 14.5%
As you can see, I’m not the biggest spender to start with, but I was able to eek out an extra 14.5% this month which likely resulted in some extra cash to push towards investments during a discounted stock market.
What I Missed
Although I didn’t feel too deprived during this no spend month and first full month of quarantine there were definitely things that I missed. (This was felt further as quarantine continued through future months)
The first thing that I truly missed was travel. Although we were able to go out and hike during this time, I missed exploring new places and trips back home to see my family and friends. We originally had a trip to Zion National Park booked and a trip to Oregon in the works, but unfortunately these needed to be postponed.
So this is likely the first thing that I will be adding back into my normal spending habits.
The second thing I missed was the occasional date night or dinner with friends. Although simple, I missed spending time away from home enjoying good company and food that didn’t need to be prepared, nor cleaned up following.
What I Didn’t Miss
I didn’t miss going out for drinks as much as I thought I would. Not that I do this often anyways, but it still is something I do to socialize. What I did find, was that during this time, we invested more into our own liquor cabinet (which I grouped into groceries) to begin to experiment and make some awesome drinks for 90% less cost. I think I might have even created a fun, cost effective interest out of it.
Conclusion
I challenge everyone to attempt at least one no spend month. It will do a lot more than just save you money for the month, I promise.
Have you attempted a no spend month? Let me know how it went for you below
If you have any specific questions, feel free to email me directly at fiscaltherapist1@gmail.com
