‘No spend’ challenge success: Tips to reset your spending habits

(InvestigateTV) — “No spend” challenges are popular as a way to get spending on track and kick off some savings, but they come with a high failure rate.

Kim Palmer from NerdWallet said they found one in four Americans have tried a no spend challenge and one in three who tried it this past January failed.

Palmer said that speaks to how popular it is, but also how hard it is to stay on track.

“A no spend challenge basically means you’re going to spend only on essentials for that entire month and you’re not going to buy any extras,” Palmer said. “So, that means skipping things like the clothes you might want or extra toy for your kids. And really just sticking with essentials, and the goal is to reset your spending and to realize ‘maybe I don’t need to be spending so much on these extras,’ then we can start saving more.”

You can start a “no spend” challenge any month. Palmer said there are a few things you need to keep in mind.

“First try to get some friends on board too because it can be really helpful if you can share the challenge with other people, maybe even share about it on social media and that just generates some extra motivation to stay on track,” Palmer said. “We also found in the data because such a significant portion of people do fail at the challenge, you want to make sure you’re ready to forgive yourself.”

Don’t feel bad if you trip up or make an extra purchase. You can always get back on track and Palmer said sometimes it can help if you narrow down your “no spend” challenge meaning, pick one category like “online shopping” and steer clear of just that for the month.

The goal is to have some extra money at the end of the month that you can either save, or you use to help pay off debt.