A new year is almost upon us. Why not give up spending, except for essential household expenses, for an entire year? Too long? How about challenging yourself to a month of no spending? Here’s how to get started on a No Spend January.
Challenging yourself (and your family) to a No Spend Challenge can help to reset your finances. If you’ve overspent over the holidays, or have had a year of unexpected things hit your bank account hard, it can help get you back on track with money to commit to not spending for a period of time.
1. You’ve STILL Got to Eat
Most importantly, deciding to not spend for a month, or a year, doesn’t mean you stop paying your light bill. Things in your household still have to run. Keep paying your rent, mortgage, electric and water bills. Also, obviously food is still in your budget. You and your kids have to eat to live.
2. Set a Realistic Budget to Spend (wait what?)
Before you embark on your no-spend challenge you must prepare for the things you will need to pay for throughout the year, and set up a recurring saving plan for those items, so they don’t catch you off guard. You’re GOING to spend money on some things, it’s best to plan for it.
If it’s the beginning of the year and you’ve been budgeting every month, (like you should) – you likely have an idea of what you’ve been spending your money on, which is fantastic. However, if you haven’t been, now is the time to start. Look through old statements, or budgets, to determine where your money has been going.
For example, every year we have to make quarterly payments for our township sewer service. Those payments are around $100. If we set aside $16 a paycheck into a separate savings account, we’ll have $416 a year to pay those bills when they come in. $16 x 26 (bi-weekly paychecks) = $416.
3. Find Items to CUT From Your Budget
Now that you know what you’ve been spending money on, it’s time to decide which things you’ll be NOT spending money on during your challenge. This is the part that might not be so fun. This is a CHALLENGE remember?
Ask yourself some basic questions. Do you NEED it? Is it fun? Does it bring you joy? If the answer is “no” to any (or all) of those, you may be able to cut it from your life for your challenge period.
4. Set Aside An EMERGENCY Fund
Obviously, life happens. If you find yourself with an unexpected car repair, or a medical bill from the Emergency Room, you may need to spend some money. This is why it’s important to set aside at least $1,000 in an Emergency Savings Account. This should help cover the small things that pop up. Just be sure not to touch that money for anything other than an EMERGENCY. Seriously!
Take the time you need to save this money before you begin your No Spend Challenge. It’s important.
5. Prepare to Say “NO”
Once you’ve established a small emergency fund, set your budget and decided what expenses to cut, you’re ready to take on the challenge of a No-Spend week, month or YEAR. This means anything outside your pre-planned budget is off limits. You’ll have to be prepared to say “NO” to both yourself and to others.
6. Have a REASON
Why are you not sending money? Ask yourself that question, and keep it written down somewhere highly visible to remind yourself why you’re sacrificing the things you are. During the tough times, you’ll need to stay motivated.
7. What You’ll Gain
Confused as to why anyone would want to do this? Here are a few things you’ll have to gain by taking on a NO SPEND CHALLENGE.
- Save Money for a Specific Goal
- Get Out of Debt (throw extra money towards your debts by cutting expenses)
- Learn to Budget and Stick To a Plan
- Appreciate the Things you DO Have
- Become a Stronger Person, Couple or Family by Learning to Say “No” Together
