Will a No-Spend Week Help Your Finances?

Luxuries without spending: Take your lunch to the roof on a sunny day!

A popular trend to bring personal spending under control is a no-spend week or month.  The no-spend week or month is the financial equivalent of a fad diet.  Lose ten pounds in just one month!  Save $1,000 in just one month!  The no-spend week is a financial sprint to create a more positive financial baseline.

“No-spend” is a little misleading.  Most no-spend weeks and months allow essential purchases.  Categories of spending typically allowed include:

• Housing (rent or mortgage payments, home insurance)

• Transportation (gas and car insurance or public transportation fees)

• Groceries (but only enough for the time in question!)

• Health insurance, medicine, and medical bills

• Utilities

Anything else is off limits.  This means the Netflix subscription is paused, meals are prepared at home to eliminate takeout, and no new items can be purchased.  If your blender breaks, you either go without it for the no-spend time or borrow someone else’s blender for a particular meal.  If your shirt tears, you wear a different shirt.  You have to resist that coffee treat purchase you are craving until the no-spend period has ended.

Why Do a No-Spend Week?

Think of a no-spend week or month as a financial cleanse to reset yourself.  A no-spend forever is unrealistic, but a specific amount of no-spend time can improve specific financial positions and focus.

One good time to use a no-spend week or month is when you are building or rebuilding your emergency fund.  Once you have an emergency fund to cover your expenses for a designated amount of time, you do not need to continue contributing to it.  Cutting out extra spending over a short period of time to build this emergency fund can work because there is a point at which you have accumulated enough and can resume spending on non-essential items.

Powering through the final stretch of debt repayment is another situation where a no-spend period can help.  After working to reduce debt over time, you may notice you could finish paying it off in three months at the same, steady pace.  But if you eliminate non-essential spending for a month, you might eliminate that debt in just one month instead of three.  A no-spend month is worth it to get you positive in less time without restricting your spending for an unrealistic period.

Does a No-Spend Time Work?

A no-spend month with a specific goal, like building an emergency fund or finishing debt repayment, can work quite well.  The key is using a no-spend time period to achieve a specific, but small, financial goal.  No-spend weeks and months can work, but a no-spend quarter, six-months, or year is usually too much to comfortably maintain because giving up all the spending that gives us joy is unsustainable.

A no-spend period also does not work if you spend a higher amount than needed in “essential” categories.  For example, if you spend $2,500 to live in an apartment with a terrific walk-in closet in a complex with amenities you enjoy, much of your spending is wrapped into your housing cost.  Even if you could spend $1,500 for a similarly sized apartment in a simpler building, you cannot just move for a week or month to reduce costs since the act of moving incurs additional costs.  Removing non-essentials works when we pay for them separately, but it does not work when they are wrapped into large single payments with essentials.

Where People Get Stuck

Most no-spend week or month failures stem from boredom.  People do not know what to do with a weekend if they cannot spend money on entertainment.  Most of the advice around how to complete a no-spend week consists of suggestions regarding free activities.

I honestly could not believe this as someone who could endlessly entertain myself for no money, and often does not spend any money on non-essentials over the weekend.  I think it is a big spending weekend when I have to buy extra gas to travel to a far-away rugby match or tournament.  Most outdoor activities have little to no cost, a picnic with friends can involve everyone bringing one homemade dish apiece, a board game night with family costs only fun times, and reading to relax or jump into an adventure is absolutely free.  (Be sure to visit your local library!)  

If boredom is the kryptonite to your no-spend week or month, consider what activities you actually enjoy and what they must cost.  Too many of us are programmed to attend the concert, eat at the fanciest restaurant for date night, or go out to the bars with friends.  Listening to the concert outside the venue, preparing a gourmet meal at home, or enjoying beers with friends in one of your backyards or on one of your balconies allows you to have the same kind of fun without the price tag.

Long-Term Impacts

While a no-spend week does not have long-term impacts on your financial position beyond achieving small financial goals, it can change the way you look at spending more generally.  Impulse-buying is higher than ever since it is easier than ever.  Taking time where you must add something to a virtual shopping cart and sit on it until the next week may show you what items you actually need and what items you decide are unnecessary after waiting.  If a no-spend period makes you realize you are an impulse buyer, you may want to institute a 24-hour or one-week delay before you allow yourself to make a purchase: You can still buy whatever it is you wanted, but you have to agree that it is still worth it after the waiting period.

A no-spend week or month can also show you how much money you need to survive, a useful tool when figuring out how much money to keep in an emergency fund.  Most of us have a budget that we can sustain in perpetuity that gives us money for fun spending priorities, but we also have a bootstrap budget that just covers the essentials.  Knowing how much we absolutely need for only the essentials is good information to have in the event of an emergency like job loss, extended medical leave, or a need to take care of a sick relative.

No-spend weeks or months are not for everyone, but they have their place.  They can illuminate your spending habits and let you achieve a short-term financial goal to get your finances on the right track.  Most importantly, they are short enough to give an attempt risk-free.