Is the no-spend challenge like a crash diet? Not if it’s done right

Open this photo in gallery:

No skin care, no clothes, no cosmetics, no takeout, no Ubers (except at night) and no Amazon orders: Those are just some of the rules that Emily Kierstead enforced during her no-spend month recently.

Despite not making it through to the end, the 26-year-old has seen lasting benefits with the lack of expenditure and is committed to making it a regular practice.

“I’m trying to do it every quarter to hit the reset,” she said, adding that “it’s habit-changing – it requires you to plan all your recipes, plan out your grocery list.”

For the uninitiated: The no-spend challenge promises big savings in exchange for purging any expenses outside of food staples, housing and transportation for a set period of time.

This helped Ms. Kierstead and her partner consistently stay below a $400 monthly grocery budget in Vancouver. It also helped her identify recurring patterns of spending regret and draw attention to purchases that brought only short-term fulfilment.

While many dismiss the no-spend challenge as a financial crash diet, those who tried it say the problem lies in framing it as a month-long financial purge or a start-of-the-year detox. Instead, implementing the practice in small increments throughout the year might offer the biggest rewards.

“If we’re looking for long-term sustainable behaviour change, long-term deprivation is not the best approach,” said Shaun Maslyk, a behavioural finance specialist and financial planner. “There’s revenge spending where we deprive ourselves that much.”

Short no-spend challenges – a week or two at most – offer a “reset” without the rebound effects, Mr. Maslyk said.

While I’ve always tried to stick to a budget, I could think of a handful of expenses I’ve regretted in the past few months (I’m looking at you, Always Pan).

I decided to put the no-spend challenge to the test, both to save and get a better understanding of my spending patterns. My goal was to save 20 to 30 per cent on weekly expenses – roughly the amount non-essentials would normally account for.

As luck would have it, my no-spend week coincided with the warmest days on record in March. It was the sort of weather that had every group chat coming back to life and orchestrating plans that start with basking in the sun and end on a patio with the credit card terminal staring back at you.

For better or worse, I found myself rescheduling plans and dodging my friends to ward off any inkling of a temptation to spend.

Gen Z finance terms such as ‘doom spending’ and ‘loud budgeting’ is a rebranding of old concepts. Is there a downside?

Natasha Knox, founder of Alaphia Financial Wellness, a coaching service, suggests doing the challenge in a group or pair to avoid isolating yourself, as I did. It reduces the chance of friends tempting you with an expensive outing, while providing a source of support or accountability when the lines between a want and a need get blurred.

The latter happened embarrassingly often. Thinking of my purchases in the strict dichotomy of “essentials” and “non-essentials” had me second-guessing everything – especially in the grocery aisles.

For example, I spent 10 minutes mulling over a pack of reduced Zucchini and cinnamon Cheerios to decide whether they could somehow fit my “essentials” list. More time yet was spent scrutinizing concert tickets – most definitely a non-essential, but one I was sure would sell out by the time my no-spend week was up.

Mr. Maslyk said this discomfort is part of becoming conscious of your spending habits beyond numbers on a statement – especially now that transactions can be made with a click of a button.

“The challenge should put you in the habit to pause and think, ‘Okay, what do I actually value?’ What brings me closer to my goals or brings me joy?,” he said.

It’s about being deliberate with our spending. Mr. Maslyk recommends keeping a journal during the challenge in addition to any budget tracking tools you might already use.

“Ask yourself in the beginning, ‘Why am I doing this? What am I trying to get out of this?’ Write it down and be honest with yourself.”

Looking back at what you didn’t buy during your no-spend week is also a simple but powerful way to curb unnecessary spending long-term, Ms. Knox said. She suggests allowing non-essential purchases to pile up in a cart, or to ”write them down, then choose one day a month where you can spend on them.” When that next day comes around, there’s a good chance you’ll have lost interest.

Though I didn’t lose interest in those concert tickets I had pushed aside, I had ample time to mull over the purchase. I no longer had doubts about whether it was important to me – unlike the limited edition Cheerios, the Aesop soap and a handful of other expenses I had dodged that week (and continued to in the days to follow).

Are you a young Canadian with money on your mind? To set yourself up for success and steer clear of costly mistakes, listen to our award-winning Stress Test podcast.