A few months ago I wrote a blog post about why I don’t do no-spend challenges. To me they seemed like the personal finance equivalent of crash diets. Instead of outright banning unnecessary spending for a month or more, I believed in taking a more moderate approach. I gave myself a small monthly fun money budget so I could still treat myself occasionally without going overboard and compromising my financial goals.
But the high rate of inflation has caused me to reevaluate my stance on no-spend challenges. Because the cost of gas and food have gone up so much, extras aren’t in the budget for a lot of us anymore. We’ve all had to cut back our spending on nonessentials to stick to our budgets and maintain our savings rates.
Here’s a closer look at why I’ve changed my mind about no-spend challenges and am planning on doing one this month.
Why I’ve Changed My Mind About No-Spend Challenges
As of April, the annual rate of inflation was 8.3%. That’s nearly a 40-year high. Since my spouse and I own our home and grow some of our own food to offset our grocery bill, we didn’t get hit as hard by inflation as other households until gas prices rose. The national average price of a gallon of gas is now $4.60, a 51% increase from a year ago.
My partner works in sales and has to drive to see customers every day. I work from home, which helps decrease our gas costs. But we’re still spending a little over $500 per month on gas. A year ago we were spending less than $300 per month to fill up our car, so that’s a pretty steep increase.
We don’t want to increase our monthly spending and be forced to decrease our savings rate. So we’re trying to find ways to cut back and reduce our other expenses to compensate for rising gas costs. We’re pretty frugal on a daily basis, so there isn’t much we can cut out. It’s not like we have bad habits we can stop indulging in like a daily latte or an Amazon shopping addiction!
That’s why my opinion of no-spend challenges has changed. Since we don’t have much fat we can remove from our budget, we’re going to have to get creative when it comes to saving money. A no-spend challenge could be just what we need to stick to our budget during this period of high inflation.
Rules of My No-Spend Challenge
Everyone’s approach to no-spend challenges is different, so I thought I’d give you an overview of the rules I’m going to try to follow. I’m going to try to buy as few groceries as possible and eat the food that’s been sitting in the back of my pantry and the bottom of my freezer for months. I’m also going to stop eating out, which I usually do about once per week.
I won’t be making any home decor or other unnecessary purchases. I’m just going to pay my bills this month and buy the absolute bare essentials. At the end of the month I’ll check back in and update you on how it went. If switching to a no-spend or low-spend lifestyle helps me combat rising inflation and continue to meet my financial goals, then I may stick with it after the month is over.
Have you ever done a no-spend challenge? Did you enjoy the experience, and did it help you meet your financial goals? Let me know in the comments section below!
Vicky Monroe is a freelance personal finance and lifestyle writer. When she’s not busy writing about her favorite money saving hacks or tinkering with her budget spreadsheets, she likes to travel, garden, and cook healthy vegetarian meals.