A spending freeze challenge is a great way to get you closer to your financial goals. It can help you to reset your budget, save extra money, or pay off debt.
May was a pretty expensive month for us with family in town and a planned vacation. Although we had planned for it to be that way, we weren’t able to save much last month.
So, June was a perfect time to start a one-month spending freeze. We budgeted for all the necessities (bills, groceries, gas, etc.), but decided to freeze the extra unnecessary spending we usually budget for. Our goal was to save as much money as we could to make up for the lack of savings last month.
It’s been quite the challenge to only spend on the necessities for a whole month, but so far we have successfully saved extra money.
So, if you’re wanting to refocus your budget and save money, keep reading to find out how a spending freeze can help you!
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Table of Contents
What is a spending freeze challenge?
A spending freeze is exactly as it sounds, you challenge yourself to not spend any money for a designated amount of time.
You choose the time frame you are comfortable with and then you freeze any spending that is not absolutely necessary or planned.
Depending on the length of time, you may have to spend some money on things such as food, housing, gas, and utilities. But, any non-essential items are off-limits.
What are the benefits of a spending freeze?
There are several benefits to a temporary freeze in spending.
You can save money fast
By not spending the money you usually spend, you’re able to save money faster. Even if you have a tight budget, most times you can find things to cut out that aren’t absolutely necessary to help you save.
Helps you visualize bad spending habits
When you stop spending money except for the bare essentials, you’re able to see how you’ve been spending money. This helps you to see what bad spending habits you may have so that you can figure out a way to change them.
Changes your money mindset
Starting a spending freeze helps you to learn more discipline and willpower when it comes to your money. It also changes your mindset and helps you better appreciate what you have and spend money on.
Why try a spending freeze?
A spending freeze is a great way to reset your budget. When we have a month where we have gone really over budget, we’ll do a spending freeze until the new month starts. This allows us to refocus and get our minds right for next month’s budget.
But, a spending freeze is also great idea for when you want to save for something. Whether you want to pay off debt or go on vacation, cutting your spending way back for a certain amount of time can help you save for it!
How long should I do a spending freeze?
The length of your no spend challenge is completely up to you. If this is your first spending freeze, I recommend starting with a weekend.
Weekends are a great way to start because they’re short, but they’re also challenging because this is where people tend to spend the most money.
Then, after you conquer your no-spend weekend, you can move on to a no-spend week or even an entire month. I have even heard of people doing an entire year.
What are the rules of a spending freeze challenge?
Everybody’s spending freeze rules will be different, and that’s the great thing…you make up your own spending freeze rules.
But, you must make up your rules before starting your no-spend period. Start by creating a list of things you can and can’t spend money on during your freeze.
Then, create any other rules you think you need from there.
Preparing for a spending freeze
There are a couple of things you should do to prepare for your spending freeze to be successful.
Create your budget
Create a budget specifically for your no spending money challenge. If it’s a month then you would make a bare-bones budget with just the necessities.
If you’re doing a weekend, figure out how much you normally spend per weekend, and then cut one weekend out of your budget. Same for if you were doing a week of no spending.
You’re doing a spending freeze for a reason, so make sure to write it down and keep it somewhere where you’ll see it every day to stay motivated.
You can also create a calendar or coloring chart to help you stay motivated and keep track of the days or money saved.
Doing a spending freeze challenge can be hard. It helps to find things to help keep you motivated so you can get through it successfully.
The biggest thing that helps us stay motivated is to have a dollar amount in mind that we want to save, and then we keep track. We also keep each other accountable for our spending and discuss our progress daily.
Do some research
You can still have fun while doing a no-spend challenge! Research fun things you can do with your family for free.
- take a trip to the library, they have more than just books to check out.
- go to the park
- have a picnic
- go geocaching
- set up a field day in your backyard
- bake cookies together
- have a yard sale
- go through and declutter (you can sell your items if you want to make a little more cash too!)
- have a movie marathon
- have a video game marathon
How do I do a spending freeze challenge?
You may be wondering about the actual logistics of a spending freeze. It’s pretty simple, but knowing why you need to do a freeze will help you set your goals, make a plan, and execute your no-spend challenge.
Set your goal
First, you need to figure out why you need a spending freeze. This will help you set your goal and stay on track.
Do you need to reboot your budget?
Maybe you have gone over budget this month, and you need to stop! Freezing your spending until your new budget rolls around is a great way to refocus and reset.
Schedule an emergency budget meeting and figure out how the rest of the month will go. Do you have enough money to cover the rest of the month (if not, you’ll need to figure out how you’ll get by), or are you just falling short on saving money or paying extra on your credit cards?
Set your goal for the rest of the month depending on your situation.
Are you saving for something?
Whether you’re saving money to put toward your emergency fund or you’re putting money into sinking funds, such as a vacation or a new bedroom set, it helps to know the details.
Knowing the total amount of money you need to save versus the estimated amount you can save during your spending freeze can help you stay on track and keep you motivated throughout.
Do you want to pay off debt?
Paying off debt is easier when you have a debt repayment plan. Figure out the total amount of debt you have to pay off and which debt you want to tackle first.
Then, figure out how much you can save to put toward debt during your spending freeze.
Make a Plan
Next, make a plan for the money you save during your spending freeze.
Where are you going to keep the money you save?
Whether you’re paying off debt or saving, you need a place to keep your money so you don’t spend it until you’re ready to.
I recommend having a savings account where you can safely place your money, this way you’re not tempted to spend it if it’s sitting in your checking account.
What day are you going to transfer?
Pick a day to transfer your money into a savings account or pay toward debt. Some savings accounts will start to charge if you make too many transactions, so choose a day or two that you will make deposits or payments.
For example, we will transfer the money we save into our savings account at end of the month when we have our monthly budget meeting.
How are you going to track your progress?
Tracking your progress is important because it helps you stay focused and motivated to reach your financial goals.
A couple of ways to track your progress are:
- a simple calendar that you can cross off the days of no spending.
- a coloring page that helps you keep track of no-spend days or money saved.
- a whiteboard to track your spending and savings.
- a budgeting app like EveryDollar that tracks your progress.
Go for it!
Now that you’ve set your goals and made your plan, it’s time to set a date to start your no-spend challenge!
What to do after the spending freeze challenge is over?
The most important thing after a spending freeze is resisting the temptation to go and spend all the money you just saved.
This is why making a plan for your money is essential. When you have a goal and a plan to get there, you are more likely to be successful.
So, when you’re done with your spending freeze, you put the saved money where you intended it to go (a bank account for an emergency saving fund, a sinking fund, or pay off the debt you chose).
What happens if I mess up?
We’re human, and we make mistakes. Things come up or we forget to budget.
The most important thing is that if you fall off the wagon, just climb back on. Don’t think because you messed up once, you can’t continue your spending freeze challenge.
I suggest budgeting a miscellaneous category in your monthly budget, this way if you do have unexpected expenses or mess up, you have a bit of wiggle room and feel less guilty and more likely to succeed.
Tips for doing a spending freeze
Here are the top five tips for a successful spending freeze.
Meal plan and eat what you have
Meal planning will help you spend less money and stay within your grocery budget.
Therefore, create a meal plan using what you have in your house.
Try to empty your pantry, fridge, and freezer before you go shopping again. I recommend you check out the blog post for Jordan Page’s Shelftember Challenge. She inspired me years ago to save money by shopping my pantry before shopping at the grocery store.
Borrow or get it for free
If there is something you absolutely need during your spending freeze challenge, see if you can borrow from family members or a friend. Or, join a Buy Nothing Facebook Group to see if you can get it for free.
Get your family on board
Talk with your significant other and children about why you think a spending freeze is necessary. Come up with a small incentive to get everyone on board and stay motivated. Then, find free activities in your local area that you can enjoy as a family.
Let your friends know
It may be a good idea to let your friends and family know about your spending freeze. This way, they don’t invite you to anything that would tempt you to open your wallet and spend money you don’t want to.
Have Realistic Expectations
Lastly, have realistic expectations. Don’t plan to stop spending if you’re not able to commit. Also, don’t expect to save your whole paycheck when you have bills to pay. Only do what you can do…period!
And make sure to give yourself some grace. If you don’t make it through the first time, it’s ok. Try again. The point is to save money, and anything is better than nothing!
Doing a spending freeze is a great way to save money or reboot your budget. It can help you to visualize bad habits and change your money mindset.
Be sure to set a goal, make a plan, and go for it! The great thing about a spending freeze is you can plan it for however long you want because you make the rules!
So, go on and try a spending freeze challenge and see how much you can save!
Make sure to leave a comment below and let me know how it went!