Have you heard of the no-spend chalenge? It’s a popular concept among budget-minded and minimalist bloggers who encourage us to save more and declutter our lives. The idea is simple: stop spending on non-essentials for a set period and see how much you can save. The more you save (and invest), the sooner you’ll achieve financial freedom.
For the most part, I haven’t needed to try it. I don’t buy much aside from athletic gear that wears out every 6–12 months since I play a lot of tennis and pickleball. The last time I bought a pair of jeans was over a decade ago, and I can’t even remember the last time I bought a dress shirt.
Since 1999, I’ve averaged a ~50% saving rate. During my final year of full-time work, I pushed it to 80% to prepare for my exit. So while I’ve always been frugal, I’ve never done a formal no-spend challenge.
But if there were ever a time to try one, that time is now.
Let’s Give the No-Spend Challenge a Go
Here are some compelling reasons to take part:
- Inflation expectations are rising, meaning goods and services will likely keep getting more expensive. Adjusting now helps you adapt.
- There’s a ~30% chance of recession or stagflation over the next 12 months due to ongoing trade tensions and geopolitical uncertainty. As a result, you could get laid off and struggle to find work for an extended period of time.
- The stock market is priced at ~22X forward earnings, which makes it vulnerable to another correction. Holding more cash gives you options.
- You may have missed buying the dip. Saving now gives you a chance to be ready for the next one.
- You’re underinvesting in your children’s financial future. A no-spend month can help redirect funds to Roth IRAs, custodial accounts, or 529 plans.
- You’re working to become a wealthy Bank of Mom and Dad, giving your children a stronger launchpad for the future.
- Your local housing market is slowing, with overbuilding and persistently high mortgage rates. Grow your down payment to take advantage of better deals.
- You might be living paycheck to paycheck due to recent lifestyle inflation or a big-ticket purchase. A spending reset helps rebuild your liquidity.
More Reasons to Try a No-Spend Challenge
If the above practical reasons aren’t good enough to help you curb spending, here are some other reasons worth considering.
- Test your financial resilience before life forces you to.
- Strengthen your money discipline. It’s a muscle. The more you flex it, the stronger it gets.
- Reset your baseline for happiness. You may realize you don’t miss spending nearly as much as you thought.
- Reduce decision fatigue by eliminating what to buy — and focus energy elsewhere.
- See if you truly need to earn as much as you do. When I left work in 2012, I made ~80% less for the first two years (excluding my severance package, which I invested 100%). But because I had been saving 70%–80% of my income for years, my lifestyle wasn’t impacted. In fact, it dramatically improved. I felt freer, less pressured, and had time to mentally and physically heal.
Challenge Duration: Minimum 3 Months
Anyone can do something difficult for a week. But to really change behavior, a challenge needs to last at least three months – long enough to form new habits and make meaningful progress.
Here’s what I’m cutting out for at least three months:
- Cheeseburgers, potato chips, French onion dip, candy
- Tennis shoes so I can finally go through my inventory
- Haircuts (I’ll use clippers and do it myself)
- Flights nicer than Economy
- Budget-busting vacation rentals
- Electronics (laptop, phone, earbuds, games)
- Household labor for primary home or rentals (gardening, cleaning, etc.)
- In-game purchases, e.g. Pokémon Go coins
Of course, I’ll still spend on necessities: shelter, insurance (health, life, property, auto, umbrella), grade school tuition, and basic food. I will also spend what’s necessary to make my parent’s ADU unit inhabitable again, such as buying a new fridge and range.
However, the extra savings will go directly into stocks, Treasury bonds, private real estate, and venture capital. My goal is to reduce discretionary spending by at least $1,500 a month, or $4,500 during this challenge.
With AI innovation picking up speed again, I want to invest as much as possible now. One of the easiest ways I’m doing this is through Fundrise Venture, which has exposure to top-tier AI companies like OpenAI, Anthropic, Databricks, Anduril, and more.
If You’re Saving Less Than 20% Of Your Income…
You’ve got a huge opportunity.
To build financial freedom faster, aim to max out your tax-advantaged retirement accounts and save an additional 20% or more. If you earn under $100,000 a year, that might feel tight, but try it. You may surprise yourself with how little you actually need.
If you’re already saving 20%, challenge yourself to bump it to 25%–30% during this no-spend period. Saving that much means every year you work and save could buy you 3–4 years of freedom in the future.
Savings Rate Chart For Financial Freedom
To motivate you to save more, check out this financial freedom savings rate chart. Just bumping up your savings rate by 5% can shave years off your working life.
If you can push your saving rate to 50% or more, you could retire within 20 years of starting your career, and probably even within 10 years from today. My chart doesn’t include potential investment returns, which accelerates your path to financial freedom.
Believe me, you’ll adapt quickly to living on less. Don’t be afraid to spend less now in exchange for freedom later. Achieving financial independence requires tough choices, but once you make them and look back, they won’t feel so tough after all.
When I look back at my net worth progression, I’m often surprised by how much it’s grown after several years of strong investment returns. It doesn’t seem real, and I end up double checking the figures a lot. You will be just as amazed by how powerfully your net worth can compound over time.
If You Want to Cheat on the No-Spend Challenge
There’s a loophole, but only if you earn it. If you just can’t resist spending on something non-essential, you’re allowed to cheat only if you generate extra income through a side hustle or a smart new investment.
For example, if I want to splurge on first-class tickets to Honolulu, I’d need to earn an extra $1,200 per person, perhaps through personal finance consulting or teaching tennis. By coupling the challenge with earning, I’ll always be mindful of whether the extra spending is truly worth it.
So, will you join me? What are you willing to cut back on?
Let’s take on a no-spend challenge and see where it leads.
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