Does the new year call for a financial reset? Here’s an expert guide on where to get started with a no-spend month to reach your savings goals.
January has a reputation for being one of the leanest months of the year. Spending more than we usually would over Christmas and New Year can leave our pockets feeling lighter as the long, dark winter month rolls on.
Many of us aim to spend less in January, whether it’s prompted by a New Year’s resolution, the prospect of a credit card bill or the long wait for the first payday of the year. One of the best ways to cut back and give your piggy bank a boost is by having a ‘no-spend month’.
“The idea of a no-spend month is to use what you already have,” says Sarah Dove, who founded Copper Coin Club, a financial wellbeing platform with her sister, Laura. “It’s a great way to reset your finances and it will help you break bad spending habits.”
Pressing pause on luxuries for a month – including eating out, new clothes and coffee – can also help you identify where you are overspending and where you can cut back long-term, which means this technique works well for those who are looking to start saving or if you’re keen to start getting yourself out of debt.
Here’s Copper Coin Club’s guide on how to practically give up luxuries for a month.
How to plan for a no-spend month
A no-spend month isn’t necessarily something you can just jump into without a bit of planning. In fact, the more you can prepare for it, the better.
Set realistic goals
“It’s really important that you pick the right month to do your no-spend month in,” says Sarah, explaining that a month where you are going on holiday or the run-up to Christmas are not good times to do a no-spend month.
Once you’ve chosen the appropriate month, Sarah and Laura suggest starting by writing a list of essential items and working out the monthly cost for them so you can stick to this budget. “Challenge yourself to only include items that are really essential,” Laura adds.
You can also write down a savings goal for the month and a list of what you would like to put the money towards, which will motivate you throughout the month.
“It’s really important to tell your friends that you’re doing a no-spend month,” Laura says. “It’s easier to stick to a goal when people know you are doing it as it will help to keep you accountable.”
Sarah and Laura also recommend joining an online community who are doing the same thing to help find support and ideas.
Before your no-spend month starts, it’s a good idea to put your monthly budget onto a prepaid credit card or take the money out in cash and remove your other debit and credit cards from your purse. “You can even temporarily freeze your cards if you think you could easily fall victim to temptation,” Sarah says, adding that you should also remove autofill debit and credit card details from your laptop and phone.
“Another thing you can do is block shopping websites from your phone and laptop,” Laura adds. Instead of buying new clothes, clear out your wardrobe to try and discover clothes you already own and have forgotten about or ask your friends to borrow or swap clothes.
Plan free (fun) activities
When it comes to food, a no-spend month doesn’t have to mean eating bland, plain foods. It’s actually a great opportunity to use up interesting ingredients at the back of your cupboards. “You should also meal prep and go to the supermarket with a list of items to avoid buying too much,” Sarah says.
You can also discover new, alternative things to do that don’t cost money. Sarah and Laura suggest the following activities:
- Spend time in nature such as hiking, parks or a picnic.
- Board games, video games and film nights.
- Free attractions such as museums.
- Cook with friends (if you are going to a dinner party offer to help cook and/or clean up instead of bringing wine).
- Try a book club and borrow books from a library.
- New hobbies (do you have art supplies you can paint with or an instrument that you can play?)
- DIY projects and decluttering.
- Organise a clothes swap with friends.
How to move forwards after a no-spend month
After your no-spend month is over, try to avoid buying lots of new things straight away. Instead, take some time to evaluate what you learned from the time you spent avoiding luxuries.
“Are there any items you normally purchase that you didn’t miss and can eliminate from your future budget? Or can you find a cheaper alternative?” asks Laura. “Have you found you don’t mind eating out less or you don’t mind buying fewer clothes?”
From there, you can set a new realistic budget and a new savings goal.
“You can also consider introducing a no-spend week or a no-spend day each month,” Sarah suggests, although she warns against overspending on other days of the month if you do choose to do this.
Speak to a Financial Conduct Authority registered financial adviser before taking financial advice, and think carefully before making any decision.