Consumer Watch: No spend challenges, not a cure all
OKLAHOMA CITY (KOKH) —
It's a popular time of year to see people try out "no spend" challenges. After months of spending, probably more than planned, it's time to put a stop to that. Some people decide to have a little fun with the shift, but you should keep these things in mind before you jump into a no-spend month.
“I think that no spend challenges are a great way to do a spending detox, but they are tough. So it requires a lot of commitment on your part, and not cheating, but staying dedicated the whole time,” says Kelly Anne Smith, savings expert at The Penny Hoarder.
No spend challenges, like any diet, force you to see the world a little differently. For example, if you can only send money on essentials, your entertainment would need to be free. This makes people more resourceful, and teaches a lesson about reaching for your wallet every time you are bored.
However, this is a short term challenge not a solid way to treat your finances.
“They are not legitimate savings plans, so I would not recommend this for someone that is maybe saving for a house or retirement. These are strictly financial challenges so you can reevaluate your finances at the end,” says Smith.
If you’re not ready for a no spend challenge, a less extreme plan is The Weekly Money Challenge-- where you save a dollar the first week, two the second week, and so on, and at the end of 52 weeks, you'll have about 1300 dollars.
Another option is to stop using your credit card altogether until you have paid off your holiday spending.