How to Have a Low-Spend Month
Living in New York City, which is known for its high cost of living, can be a financial challenge. Hannah Yoo, a resident of the city, understands this all too well. She says, “You step outside your house and you’ve already spent $200. It’s crazy how quickly things can get out of control.” To combat this, Yoo decided to try out a “low-spend month” – a budgeting trend where participants aim to spend only on essentials and limit or eliminate discretionary spending.
Yoo is not alone in her quest to save money. The hashtag #lowspendmonth has gained tremendous popularity on TikTok, with videos tagged with it garnering over 13.5 million views. Catherine Arnet-Valega, a wealth consultant at Green Bee Advisory, says, “The cost of living has been really tough for a lot of folks. People are paying attention to their finances more than they used to.”
A low-spend month can provide an opportunity to pay off debt, save for a big purchase, or gain a better understanding of your monthly spending habits. Yoo, who completed her first low-spend month last August, says, “Fighting overconsumption and becoming more intentional with your spending is a muscle that you have to practice. As I’ve continued to do it, I’ve seen my mindset change.”
Set your intentions
Before starting a low-spend month, it’s important to identify why you’re doing it. The reasons may vary from person to person. It could be to pay off debt or save up for a new car. Setting your intentions will help you stay motivated and focused even when faced with temptations to stray from your goal.
Be mindful about purchases
Take a close look at your monthly budget, even if it seems daunting. Sarah Paulson, a financial planner with Valkyrie Finance, suggests starting the challenge by cutting back on one category in which you tend to overspend. For example, you can make coffee at home instead of buying it daily or reduce food delivery orders. Paulson advises, “You can be more frugal about your purchases without cutting yourself off completely.”
During her low-spend month, Meg, who declined to provide her last name, refrained from impulse buying trendy products she saw on social media. Instead of immediately making a purchase, she made a wish list of items and revisited it a week or two later. This allowed her to reevaluate if she really needed those items.
Don’t be too restrictive
Cutting back too much during a low-spend month can lead to overspending once the challenge is over. Sarah Paulson compares it to a rubber band snapping back, saying, “You do really well for a month, and then you go overboard.” It’s important to be honest with yourself about areas where you may be overspending, but also allow yourself some joy. If you enjoy a monthly facial or treat yourself to takeout on Fridays, you can tailor the challenge to accommodate those activities. Paulson advises, “Saying no to yourself constantly doesn’t feel good. Spending isn’t necessarily a bad thing. It’s just when we let it get away from us.”
Repurpose your savings
To avoid overspending once the month is over, Jack Heintzelman, a financial planner at Boston Wealth, suggests redirecting the money you save toward your financial goals. If you find that you can spend $100 less in a certain category, allocate that amount toward your savings. Automating the saving process, whether it’s for retirement, a savings fund, or paying down debt, helps keep your goals in focus and prevents impulse spending.
Join a community
Having a partner, family member, or friend join you in the challenge can provide accountability and support. Heintzelman says, “If you speak it out loud or surround yourself with others who understand what you’re doing and your goals, then that helps with accountability.” Sharing your low-spend journey on social media, like Yoo did on TikTok, can also help keep you on track and prevent excessive spending.
Remember to be patient with yourself and understand that slip-ups don’t mean you have to give up. Yoo and Meg both struggled initially with the challenge, but pushing through allowed them to build habits that lasted beyond the month.
Having a low-spend month can be a powerful tool to gain control over your finances. By setting intentions, being mindful about purchases, avoiding excessive restriction, repurposing savings, and joining a community, you can successfully navigate a low-spend month and develop healthier spending habits for the future.