On a few of the personal finance blogs that I frequent, there is one topic that gets presented on a regular basis. This topic is a No Spend Challenge. It works like this: you go a set amount of time, be it a week, two weeks, a month, etc. without spending any money on non-budget categories. Some variations set the spending restrictions on everything but gas and groceries. I question the effectiveness of these challenges.
In some situations, I see not spending challenges as a good thing. For those that have a “spending problem”, taking a break from spending may be the thing that makes you realize that you can afford to not have the latest and greatest items all of the time. Another instance where a no spending challenge may be beneficial are for impulse buyers. If you are the person that typically has buyers remorse after making a purchase, then taking part in this type of challenge may be for you. By making yourself wait, you hopefully with come to realize that you don’t need the item in particular. It may help you to build a foundation for learning to delay purchases so you can see if you really need the item.
But for most others, I see no spending challenges as simply a way to delay the spending. I see it as the same as those spammy emails we all receive about not buying gas next Tuesday. If you haven’t received this email, here is how it goes: The concept is that you refrain from buying gas on a set day. This will force the price of gas down because of a lack of demand. The problem is that everyone that needed gas on the “no gas day” will simply buy their gas on the next day, along with everyone else that needs gas.
No spend challenges act the same way. You are just going to buy the things you were going to buy the no spend week the next week. For example, if you typically spend $20 per week, you won’t spend anything during you no spend week. But the next week, you will buy your normal $20, plus the $20 you didn’t spend last week. You are in the same exact spot as before.
For the majority of people reading this, I don’t recommend taking part in these challenges unless you fall into one of the categories I mentioned above. For everyone else, I suggest making it a point to review your prior months spending and analyzing where you spent money that you can permanently cut out. Over the long run, you will be in a much better financial situation and you will understand your spending habits much better.
Readers, have you ever participated in a no spend challenge? What was your experience with it?