IF you’re struggling financially after the holidays, you may want to consider doing a no-spend month to get your finances back on track.
It typically means you freeze spending on unnecessary items, while still paying for essentials such as groceries and household bills.
If done right, a no-spend month may mean you can reduce expensive debt, build up a rainy day fund or even start saving for next year’s Christmas.
It could also teach you what you truly value and enjoy spending money on.
The typical UK household spends almost £740 extra in December, 29% more than the average of £2,500 in a month, according to the Bank of England.
In other words, it’s no wonder our wallets are feeling a little flat.
Meanwhile, many people are also paid early in December, meaning it’s an even longer stretch until the next payday.
Last month, a mum-of-five who saved £1,500 by doing a no-spend January shared her top tips for sorting out your money.
Meanwhile, Nicola Richardson, her husband Dave and their two children are doing a no-spend year so they can retire by the the time they turn 50.
Rachel Springall, finance expert of comparison site Moneyfacts, told The Sun: “Small simple steps can make a big difference to someone’s everyday finances.
“Being more strict with non-essential spends can mean that a consumer finds themselves much better off over the course of a month.”
In the process, you will also lay a “solid foundation” for the future when it comes to managing your money, she added.
Below we explain how to do a no-spend month successfully.
Adapt the challenge to work for you
A “no-spend month” may sound strict, but there are no hard and fast rules.
Naturally, it’s about reducing your spending but committing to spending no money whatsoever is unrealistic.
Everyone has expenses they can’t go without, like groceries and electricity. You get to decide which categories are untouchable and which ones to cut.
To make it easier, use a budgeting app to find your non-essential spending categories to pause – whether it’s subscriptions, takeaways or shopping.
Mrs Springall recommends people to use an app such as MoneyDashboard.
She told The Sun: “The app allows consumers to set goals such as saving for home improvement, a holiday or to just build a rainy day fund.
“One other interesting feature of the app is the ability to categorise spends, so someone could easily if they are spending too much on entertainment.”
Decide how long you can do it for
You also need to choose a time frame, is a month realistic for you?
Either way, you may want to consider doing a no-spend February as that’s the shortest month.
If that still seems too long, you may be better off by starting with a shorter period, said Naomi Willis, who runs the Skint Dad website with her husband Ricky.
She added: “I’d suggest starting small, like trying it for a weekend, as you are more likely to succeed.”
Know why you’re doing it
There’s no need to stop spending for the sake of it. Before diving into a no-spend period, think about what you’re trying to achieve.
Are you planning to reduce credit card debt or an overdraft? Do you want to start an emergency fund or save for a future trip?
By setting a more specific goal you may feel more inspired to carry on.
Mrs Willis said: “I understand others try the challenge to stop cycles of overspending, but people can end up forking out more money up front getting themselves prepared to not spend any, which defeats the purpose of saving.
“For anyone who wants to give it a go, I’d suggest setting a goal for how much they want to save by the end of the no spend period.”
Delete shopping apps and unsubscribe from newsletters
If you think you’ll struggle to resist shopping temptations, it’s worth deleting shopping apps for the time that you’re doing your challenge.
The same goes for newsletters, which are worth unsubscribing to as well.
The constant notifications about sales and new items aren’t helpful when you’re trying to save.
Leave your wallet at home
If you’re heading out, perhaps for a walk, consider leaving your wallet at home, said Ashleigh Swan, who runs the Money Saving Central website.
Ashleigh told The Sun she does a no-spend January every year to recover financially from Christmas.
Since she started doing it in 2013, she’s saved between £400 and £650 each time.
By leaving your wallet at home, you can avoid the temptation of impulse buying.
Of course, the UK is currently under “stay at home” orders due to the pandemic but it’s worth keeping in mind once non-essential shops reopen.
Get a prepaid current account
Another way to limit the amount that you spend on non-essential purchases is to set up a prepaid current account.
Mrs Springall recommends Pocket, which lets you load it with funds and removes the temptation to overspend.
Just keep in mind the provider isn’t covered by the Financial Services Compensation Scheme, meaning your cash is at risk if the firm goes bust.
Freeze credit cards for purchases
Alternatively, credit card users may want to freeze their accounts to help stop them from spending unnecessarily, Mrs Springall added.
Many credit card providers allow you to freeze and unfreeze your card on their websites or apps to prevent purchases on your account.
When you pause your credit card in this way, your provider won’t authorize any new charges but recurring payments already set up will continue to be processed.
Interest charges will typically also continue to accrue and you’ll still have to make monthly payments, if you have a balance.
Avoid public transport, if possible
If you’re a key worker or you can’t do your job from home, it’s still worth trying to avoid public transport to save cash when commuting.
Mrs Swan said: “Walking or cycling will not only save you money but it will be great exercise, especially if you’re like me and you overindulgence at Christmas.”
Plan your meals
For the no-spend period, go through the cupboards and write down what ingredients you already have at home.
Mrs Swan explained: “Then you can come up with the items you need to go with them to complete the meal.
“This is also a great way of avoiding waste – we have all found a tin in our cupboard that has gone out of date two months ago.”
How to cut the cost of your grocery shop
SAVING on your shop can make a big difference to your wallet. Here are some tips from Money.co.uk about how you can cut the cost of your shopping bills:
- Write yourself a list – Only buy items that you need. If it isn’t on your list, don’t put it in the trolley
- Create a budget – Work out a weekly budget for your food shopping
- Never shop hungry – you are far more likely to buy more food if your tummy is rumbling
- Don’t buy pre-chopped veggies or fruit – The extra they’ll charge for chopping can be eye watering
- Use social media – follow your favourite retailers to find out about the latest deals
- Be disloyal – You may want to go to different stores to find the best bargains
- Check the small print – It’s always worth checking the price per kg/lb/litre when comparing offers so you’re making a like for like decision as a bigger box won’t necessarily mean you get more
- Use your loyalty cards – Don’t be afraid to sign up to them all. They all work slightly differently – work out what bonus suits you better and remember to trade in your points for additional rewards
Get support from friends and family
A no-spend challenge can feel daunting if you’re doing it alone.
By telling friends and family about it – or better yet, getting them to join you – gives you an accountability partner, Mrs Willis said.
She added: “This way, it’s harder to cheat and you will more likely achieve your goal.”
Alternatively, if you don’t know anyone willing to do it, online forums such as Reddit and Instagram users sharing their journeys can offer support.
If you’re going to do it in January, it’s also worth planning before Christmas.
Mrs Swan said: “If relatives ask what you would like for Christmas, suggest smelly gift sets.
“That way, you will get your body wash, deodorants etc to see you throughout January and you get a great gift which will also save you ££ in January.”
Even if you’re not spending anything on entertainment doesn’t mean you have be bored for a month.
Mrs Willis suggested doing some research ahead of time for things you can do for free or keep you entertained.
In fact, many expenses have free alternatives.
Amazon Prime is available as a 30-day free trial, giving you access to plenty of music, series and movies – but steer clear of any shopping deals.
While you can test Kindle Unlimited, which gives access to more than a million books, magazines and audiobooks, for free for a month too.
If you’re after a binge-worthy box set, sign up to the 30-day free trial of BritBox, where you can stream top British series from the BBC and ITV.
Just make sure you cancel the trials before they end or you’ll be charged for the subscription.
In December, a mum who saved £25,000 through her no-buy year revealed how you can do the same in 2021.
While another saved £25,000 in one year by giving up luxuries.
A savvy vlogger has also shared 12 steps to saving £15,000 a year, including fakeaways to apps.