In this day and age of high cost of living, elevated inflation, steady rise in taxes, particularly property, and market volatility, the idea of cutting back on frivolous spending has gained significant traction. Consumers are working to cut back and save money often through trendy, fun challenges like the no-spend challenge.

 

Participating in a challenge like this might be a great way to help you cut back on spending and recognize which non-necessities you regularly put money toward without realizing it.

 

How does the no-spend challenge work?

 

The goal is to spend only on necessities. You try and go as long as possible without spending money on non-necessities. You can compete with friends and family and see who can tally the most consecutive days without needlessly spending money.

 

Consider these tips for completing the challenge:

 

Set yourself a timeline for completing the challenge

The amount of time you want to challenge yourself is up to you. You can go for as short as a weekend, a week, a month, or longer. The timeline determined by your financial goals.

 

Create a budget

A budget is a financial plan. Making a budget allows you to determine how much money you have coming in to help manage your spending, hopefully cutting down on the frivolous spending we all find ourselves guilting of doing. You want to make a list of your income and expenses. Then find the difference after expenses are subtracted from income. With the money left over, you can save some of it and track the other transactions to more accurately understand your spending habits.

 

Plan out expenditures you can control

Now that you have your budget figure out the expenditures you can control; for example, instead of eating out, prepare meals. During this challenge, you can meal prep breakfast, lunch, and dinner so you don’t overspend by eating out or purchasing groceries you don’t need. If your spending challenge spans multiple weeks, make Sunday the day you schedule the meals for the following week. You can also figure out what entertainment you may be interested in while participating in the challenge and plan out what you will do and how much you are willing to spend.

 

Review your progress

It could be helpful to periodically review your progress, determine if you can keep to the budget, and follow your schedule for meals, entertainment, or any other expenses you can control. Sometimes, we don’t realize that we are spending money unnecessarily simply because we have done it for so long it has become a habit.

 

Modify your budget and spending strategy if needed

After a review of your budget and progress, is there anything you need to modify? Our lives are constantly evolving, especially when it involves finances. Revising your plans may be helpful as you work to complete your no-spend challenge.

 

Consult a financial professional

When taking the initiative to make changes to your financial world and spending habits, it may be beneficial to consult a financial professional to see if there is anything you can do that you may not have thought of or strategies to employ to your challenge to make your money and savings work for you. Finances can be very complicated and the decisions you make could significantly impact your financial goals. Take steps to mitigate the risk by scheduling a meeting with your financial professional to review your budget and spending plans.

 

 

Important Disclosures:

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

 

All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.

 

Sources:

One-Third of Americans Spend More on Coffee Than on Investing | The Motley Fool

How To Do The No-Spend Challenge | Rocket Money

Your Guide to How to Budget Money – NerdWallet

 

 

This article was prepared by LPL Marketing Solutions

 

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