Imagine going a whole month without buying anything unnecessary. No food delivery, no impulse retail therapy, no online shopping. Sounds intense, doesn’t it? But that’s the concept of a “No-Spend Month”, a viral financial challenge where you commit to cutting superfluous spending for 30 days. But is it the best way to get hold of your financial situation? Let’s break it down.
What exactly is a No-Spend Month?
A trend that’s been doing the rounds the past year, a no-spend month is a financial detox. It curtails your expenses to the bare necessities– rent, utilities, groceries, transportation, fuel— for a whole month. The objective is to aggressively save your discretionary money and take charge of your financial situation.
Why It Works
A whole month without excessive spending will give your savings an active boost. This can be a great way to jumpstart your emergency fund or start saving for a big-ticket item.
A lot of us feel stuck in a rut of bad spending patterns. A 30-day respite makes you rethink all your decisions and introspect your spending habits. It may give you a whole new perspective and unshackle you from excessive spending.
If you’re struggling to repay debt, a no-spend month will allow you to allocate an extra sum of money to your repayment.
A no-spend month not only makes you more mindful of your spending habits, it can also make you feel in control of your money. Getting some extra cash on hand will make you feel empowered, and hopefully, help you prioritize.
Challenges
Temptation will come in many forms including social media ads that seem way more clickable when you’ve decided to not spend. You’ll inadvertently see that one piece of clothing you’ve been meaning to buy for months. Or stumble upon an irresistible offer on the newest smartphone. Additionally, unexpected social events can make sticking to the plan tough.
Can it Really Reset Your Finances?
A no-spend month can be a powerful tool and definitely help you take control of your finances. But it’s not a magic fix. If you return to spending recklessly after the month, a no-spend month will only be a temporary break, not financial progress.
For more sustainable financial habits, consider investing in mutual funds, which will result in lucrative returns in the long run. Or start a separate high yielding savings account, where you contribute an arbitrary amount every month for at least a year, without withdrawing any money. And if you’re striving to better your finances, talk to an expert or an advisor who might guide you with a customised strategy to improve your overall financial health.
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Disclaimer: The article is for information purpose only. The views expressed in this article are personal and do not necessarily constitute the views of The South Indian Bank Ltd. or its employees. The South Indian Bank Ltd and/or the author shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial/non-financial decisions based on the contents and information’s in the blog article. Please consult your financial advisor or the respective field expert before making any decisions.