I first encountered this challenge back in 2012. In fact, in one month, I came across two different versions of it. The first, printed in the Dollar Stretcher, challenged readers to have "no discretionary spending at all" for the entire month of February. This means more than just limiting spending to "necessities": it means that you should not allow for any spending at all beyond your regular monthly bills. Even groceries are supposed to be bought ahead of time, so you don't make any extra trips to the store (though you're granted a small allowance for "fresh milk and produce"). Spending for medical emergencies is allowed, but if it's your car that suffers a sudden injury instead of you, you're supposed to find some way to do without it for the rest of the month rather than pay for a repair.
The other version, somewhat less strict, was the "21-Day Financial Fast" promoted by the Washington Post's Michelle Singletary. In addition to being three weeks long instead of four, this challenge allows spending for personal needs, including (but not necessarily limited to) gas, groceries, medicines, "essential personal hygiene products," and all "regular household bills." However, all these necessities must be purchased with cash only—no credit cards, and ideally, no debit cards either. Like Yeager, Singletary sees the purpose of the challenge as "breaking the chains that keep you from being a better manager of your money"—i.e., kicking mindless spending habits.
When I first considered this challenge three years ago, I objected to it on the grounds that it "impose[s] a set of arbitrary rules that could actually end up costing you money in the long run." By enjoining you from spending money on anything that can't reasonably be defined as a necessity of life, the challenge prevents you from taking advantage of bargains on items that would genuinely enhance your quality of life and possibly even help you save money in the future. To take a common example: suppose you want to replace all your old, inefficient light bulbs with energy-saving LEDs. And suppose, further, that a local store is offering a special sale on them this week: just $2 for an 800-lumen bulb, which would normally cost around $8 at Home Depot. At that price, the new bulbs would pay for themselves in just a couple of months, according to the savings calculator at LEDwaves.com, and they'd continue to save you $10 a year—each—for the rest of their lifespan. Sounds like a no-brainer, right? Well, sorry, but as long as you currently have some sort of working light source in your home, those new bulbs are not a "necessity." You'll have to wait to buy them until your no-spend month is over and pay an extra $6 per bulb.
It might have been a situation like this that prevented the Bankrate reporter who tried this challenge, Lance Davis, from sticking it out for the whole month. He reports that he "only made it about 10 days," though he doesn't actually explain how he came to fall off the strict-necessities wagon. Still, he claims that the challenge definitely helped him "significantly decrease how much I spend on extras," saving him about $100 altogether. More to the point, it helped him "define what I need and what I think I need," possibly pointing the way toward future savings.
Based on Davis's experience, I can see the possible benefit of a no-spend month, but at the same time, I don't want to get myself stuck in a no-LED-bulbs-for-you situation. So rather than following the challenge as written, I'm going to try to practice mindful spending in a different way. For the whole month of April, I'm going to keep track of all the money that Brian and I spend—which is easy enough, since I routinely do this anyway. But then I'm going to add a new twist: at the end of each day, I'll mark my spending list (possibly with some sort of color-coding) to sort all my purchases into three different categories:
- True necessities: things I genuinely couldn't get by without.
- Investment purchases: things that I could manage without, but will definitely manage much better with.
- Clear luxuries: new clothes, meals eaten out, concerts, any kind of entertainment.
I'm sure this is just the first of many tough calls I'll have to make over the course of the month between necessities, luxuries, and wise investments. For instance, what about charitable giving? It's not a necessity for me, but it may be providing necessities to others; does that make it an investment? Or how about our cable TV bill? Cable is clearly a luxury, but ours is bundled inextricably together with our phone and Internet service, both of which I consider necessities (at least for someone like me, who works from home). So should I pull out the cable portion of the bill and file it under luxuries, or treat the whole bill as a necessity? If we buy a bottle of wine to go with our dinner, does that count as a luxury, or is it lumped together with groceries, a necessity? Does it make a difference if the wine is for the Seder on Friday, and could thus be considered a religious or cultural necessity?
My guess is that, when I look back over my expenditures at the end of the month, I'll find very few definite luxuries, but a lot of tricky expenditures like these—things that could be necessities or luxuries, depending on how you look at them. But after all, the whole point of the no-spend challenge, or at least the main point, is supposedly to make you more mindful of the way you spend your money. So for me, thinking about these fine distinctions, and figuring out where I personally want to draw the line, is probably the best way to do this. I expect that, in the end, it will prove much more useful than blindly following a set of rigorous rules that may or may not be relevant for me.