How to Do a No-Spend Challenge When You Have Kids

Every January, Siobhán Alvarez-Borland and her family embark upon a different kind of New Year's resolution: a month-long no-spend challenge.

The Atlanta, Georgia-based mom of three says it's one of her favorite ways to start the new year.

"By creating a no-spend challenge with your own family, there are a few benefits that consistently happen," she says. "The first is that of course, you save money. You also are much more intentional in paying attention to what you're buying, when and how. It also resets the way you view your own income and spending habits."

Scroll through TikTok, and you'll likely see dozens of parents following suit.

While not a new financial trend, the no-spend challenge has recently surged in popularity among influencers, accounting for more than 155 million views on the app alone.

So how does this challenge work, and does it actually help you save money or reset your budget? And why are families so intrigued by the idea of not spending at all? Learn whether the no-spend challenge is a helpful saving experiment — and if it's right for you.

What is a no-spend challenge?

A no-spend challenge is when you don't spend any extraneous money for a set period of time — usually a month, but potentially as short as a week or as long as a year.

It's important to note that these challenges don't prohibit all spending. Rather, they don't allow nonessential spending. That means not eating out or buying new clothing, toys or electronics. But you can still spend on essentials like housing, bills, food and medical care.

How does a no-spend challenge work?

Ready to take on a no-spend challenge? Most follow a set formula:

Determine your financial goals — the more specific, the better. For example, do you want to reduce debt or save up for a down payment?
Set a timeframe. How long do you want the challenge to last?
Establish the rules. What you can spend on, and what's a no-no?

Once you start, don't forget to track your progress. Research shows that those who frequently track their progress are more likely to reach their goals.^[1] Use a calendar to mark no-spend days, trying to get as many in a row as possible, or use an app like Habit Tracker.

What are the benefits of a no-spend challenge?

A no-spend challenge can help you achieve long-term financial goals, like increasing your retirement savings or paying off debt. In the short term, it can help you reset your budget or set up an emergency fund.

Doing the challenge also allows you to zero in on where you're overspending.

"The first two weeks are always the hardest because you're essentially breaking spending habits that have become muscle memory," Alvarez-Borland explains. "However, for most families, it quickly becomes apparent just how many extra unnecessary purchases you're making on a regular basis."

These challenges are also a great way to create lasting financial habits, says Courtney Alev, a consumer financial advocate at Credit Karma.

"The no-spend challenge helps you adjust your budget," she notes. "You may realize it's easier than you thought to cut back spending in certain categories and stop spending as much on those items in the long term."

No-spend challenge rules for families

If you have kids, a no-spend challenge may seem impossible. But getting everyone on board and reviewing the no-spend challenge rules are the first steps to success.

"Every family has unavoidable expenses, so before you start the challenge, sit down as a family to understand how much you tend to spend each week or each month, and in what categories," Alev says. "Talk through where you can temporarily pull back spending, and get everyone to agree to stop spending in those areas for a set amount of time."

While a no-spend challenge is the perfect time to teach your kids the difference between essential and nonessential items, it may also call for some flexibility. In addition to putting money toward must-haves like housing, utilities, food and pet care, you may want to continue paying for activities for your kids like soccer or Cub Scouts — and that's okay.

Tips for a successful no-spend challenge;

Here are some tips for a successful no-spend challenge with your family:

Pare down your wallet. Take your credit and debit cards out of your wallet and only carry a set amount of cash, Alvarez-Borland recommends. It'll help you curb any impulse purchases.
Do the same online. Remove your saved credit cards from sites like PayPal and Amazon to slow down frictionless purchases.
Meal plan strategically. For Alvarez-Borland, a big part of her no-spend challenge is about meal planning. "Create a menu with your children so that there are clear expectations," she advises. "This conversation might look like 'We have chicken nuggets in the freezer right now, but once those are gone, we aren't going to buy them again until next month. Let's look in the freezer and pantry, and you can tell me what other meals we can make after that.'"
Plan free entertainment. Take advantage of public programming at your local library, free admission days at museums or other unticketed festivals or concerts during your no-spend challenge.

Other ways to save besides doing a no-spend challenge

Is a no-spend challenge just not for you? That's okay. You can try turning the challenge on its head.

"Instead of saying, 'You can only buy necessities,' you actually make a list of what you can't buy," explains Howard Dvorkin, CPA and chairman of Debt.com. "So, no eating out, no extra entertainment, no new clothes, electronics or toys. For some, this may be a much more realistic means to reset their budget."

The idea of not spending any money for a specific time period may seem a bit scary or even completely unattainable. But a no-spend challenge can be a simple way to jump-start your savings or reset your budget.