By Michelle Wanjiku
Have you heard of the no-spend challenge? Just as the name suggests, it involves challenging yourself to not spend money on certain things for a specific period.
For example, you can decide to not spend money on buying lunch for a month, eating out every weekend or even walking instead of spending money on transport if possible.
When it comes to personal finance, you can save money by either increasing your income, that is, having multiple streams of income or you can reduce your spending. Someone smart with their money will do both.
As end month approaches, you need to start thinking about how you can ensure that the money you earn benefits you in the long run.
Why should you do a no-spend challenge?
Taking part in a no-Spend challenge can help you achieve your savings goals as well as enable you to pay off any debt you may have because you will have more money at your disposal.
But that’s not all, participating in this challenge can also help you;
- Break the cycle of living paycheck to paycheck.
- Help you build better financial habits that will enable you build wealth.
How to do a no-spend challenge successfully
1. Set clear goals
First, ensure you have clear goals laid out. What do you want to achieve with this challenge?
Without a clear idea of why you are doing the challenge, it might not benefit you. Meaning, it is not just about postponing your buying until the end of the challenge, you should have a clear idea of what you want to do with the money you save.
Therefore, don’t start the challenge until you know what you plan to do with the money you save. Ensure your goals will also benefit you, for example, you can use the money to pay your HELB loans, start a business, save for retirement or even put it in your emergency fund.
2. Don’t carry more money than you need
It is not possible to walk around with no money at all, especially if you use public transportation. Therefore, if you want to prevent yourself from buying shoes being sold on the streets as you get off work, carry exact money.
Think of it this way, you are more likely to buy the shoes if you have enough money for the shoe as well as to cover your transport. However, if you just had enough money for transport, you won’t buy the shoes.
So during the challenge ensure you don’t carry around more money than you need.
3. Keep a record of how much money you are saving
When you choose to not spend any money on a certain thing that you regularly spend money on, you should keep a record of how much money you are saving.
For example, if you decide that for three months you will not pay for TV subscriptions and will instead watch the free channels, ensure to have a record of how much money you save every month from not having to pay the subscription.
So put the money in a separate account and ensure you keep track of it. Seeing this money add up will also boost your enthusiasm on saving and might push you to save even more.
4. Find alternatives
It might be difficult to stop doing things such as hanging out with friends and other hobbies that you spend money on without really having an alternative.
For example, if you eat out with your friends regularly, you can decide to eat at home instead. This will help you cut down on food costs and will help you save more money while still maintaining your relationships.
Try and find free activities to do –such as picnics, that will entertain you and your family or friends so that you don’t have to give up on socializing with people altogether.
5. Have an accountability partner
It might be difficult to have the discipline to keep yourself from spending money. to ensure you go through with it, you should have someone who will keep you in check.
This can be your friend or a relative. Their job will be to ensure that you are sticking to the challenge and not spending money on the things you had said you will not spend money on.
You can even get someone who is also doing the challenge and the two of you can be each other’s, accountability partners.
Saving your money is a great start to building wealth, so you should always strive to find ways in which you can save more money.
Money-saving challenges can be a fun way for you to improve your savings and in turn, boost your financial situation.
In personal finance, people are categorized as either spenders or savers- which category are you in?
Do you know of any other saving challenges? Share them in the comment section
The writer is a Communication Officer/Digital marketer at Career Point Kenya. Email: firstname.lastname@example.org