{This post may contain affiliate links. See my disclosure policy here}

You might be reading the title of this post and think “there is no way that is possible. That’s just click-bait.” But I assure you it is true. I am going to explain how a no spend month led us to saving $25,000 cash in one year.

This post was both tough and fun to write. It was tough because I don’t want it to come across that I am bragging about our progress. Rather, I want to get this out there to demonstrate that if we can do it so can you. It was fun to write because it made me reflect back on this time and think about the huge amount of progress we made in just one year! Anyways…

Back in January 2016, my husband and I decided to do our first ever no spend month. We had never done anything like this before. In fact, we were spending idiots. We had just started budgeting and realized that we kinda sucked at managing our money.

At this time, we were just starting to wrap our mind around actually saving money before spending it. Imagine that. You see, we had been trying to get a hold of our finances for about six months by that time with very little traction. Also, I really needed a new vehicle but didn’t want to take on any payments.

Before, I didn’t think we needed to watch our money that closely as we both worked full time at decent paying jobs. So, we just bought pretty much what we wanted. I thought it would all workout. We weren’t extravagant so it seemed all fine and dandy. But it all caught up with us when I went on maternity leave for the second time for a full year and bringing in hardly any money.

I will take you through the steps that we went through to get us there.

Get clear about your situation.

Own your situation. Take full responsibility. Know exactly where you stand.

You need to know exactly where you and your partner are spending and how much money you have coming in. This is basic personal finance but at first it can seem like a daunting task. But once you get the hang of it, you will wonder how you could have lived in oblivion.

Prior to our first no spend month, I created a budget. It was quite simple. It was a list of all our regular monthly expenses such as utilities, cable, mortgage payment, insurance, etc, etc.  Below is an example:

Payment Due DateExpense TypeMonthly Budget
1Daycare $915.00 
1Property taxes $259.70 
2Mortgage Payment $1,272.21 
3Children’s Education Fund $200.00 
3Your Retirement Contribution $300.00 
3Spousal Retirement Contribution $300.00 
3Life Insurance Premium $250.00 
3Heating & Electricity $250.00 
6Internet & Cable $115.00 
7Cell Phone $91.81 
15House Insurance $248.59 
15Auto Insurance  $63.50 
19Netflix $10.99 
21Gym Membership $40.00 
28Water, Sewer, Waste Pick up $145.00 
 Groceries $800.00 
 Misc. house costs $200.00 
 Clothes $75.00 
 Gas $300.00 
 Entertainment $150.00 
 Monthly Irregular Expenses* $325.00 
 $6,311.80 

Account for Irregular Expenses

Do you see that last category above called “monthly irregular expenses?” 

Because life isn’t as predictable as a static budget, I created a separate budget of irregular expenses that don’t happen every month such as oil changes, birthdays, subscription renewals, kids activity fees, etc. I totalled this up for the year and averaged it over 12 months. In the above example, it was an extra $325/month.

Let me tell you, when I went through this basic budgeting exercise I was shocked! I couldn’t believe how much money we spent every month and year just on budgeted items and irregular expenses.

But I also realized that we should be able to live below our means. So why were we struggling?

After looking at our spending habits, it was painfully obvious that we were spending money without thinking about it. $10 here $50 there, etc, was killing our bank account. It all adds up fast.

At this point, I was thinking “what can we do to get us to change?” After searching various personal finances topics, I came across the idea of a no spend month. My first thought was that’s too restrictive. But after some thought I knew we had to do it. We had to stop our bad habits.

I talked to my husband about it and I was surprised that he immediately agreed. We had been talking about money for months and not really getting anywhere so this was taking action. 

How to Prepare for a No Spend Month

Agree on the terms.

Now that you know your budget, look at it and agree where to cut back or eliminate for the no spend month.

For us, we agreed that we would not go out for lunch or dinner at all. We also decided we would not spend any money on entertainment or new clothes.

During this time, since my mind was on our budget, it led me to examine all the categories on our budget. For instance:

Savings Tip: Go through every single category of your budget and see where you can cut back or eliminate. Make sure to go through all your statements for the last 3 months to ensure you don’t miss anything.

Set a goal.

With the savings we made by committing to not spending any money that wasn’t absolutely necessary, we set a SMART goal of saving $500.

Here is our SMART Goal:

  • Specific (Clear and well defined): No spending on anything that isn’t absolutely necessary.
  • Measurable (Includes exact amounts and/or dates): $500
  • Achievable (Small stretch which means you can definitely accomplish your goal but it will stretch you just a little bit): Based on our budget, the agreement we made to not spend, the math of $500 felt achievable.
  • Relevant (Consistent with your life goals): Yes, we needed to save money to build an emergency fund and also save for a new vehicle.
  • Time bound (Set a deadline): Month of February 2016.

Setting a SMART goal SUPER important. Do not skip this step!

Have you ever heard the phrase “what gets measured gets done?” This something we say in HR a lot because it’s true. This phrase applies perfectly to a no spend month. When you have a realistic number to achieve, you will do it. 

Because we set a very specific SMART goal based on our current situation, we were very focused. We knew we could do it if we stuck to our plan. 

The result was that we blew our goal out of the water and saved just over $1000! 

Honestly, we weren’t even perfect. A couple of things were bought that shouldn’t have but we learned some more important lessons from this experiment…

Lesson’s Learned

Change your mindset about money.

Two things I realized during this month was the power both of us being in agreement and the power of goal setting.

The more important thing I learned is that with some focus, money was actually not as hard to save as I thought. It made me realize that not only could we save money and not feel deprived but I should also focus on making more money as well.

This whole thing got me researching every which way to save and earn which led me to saving on every day expenses that didn’t affect our lives negatively and make more money with HR consulting.  I was increasingly driven to make more money because I was crystal clear with the fact that I needed to in order to reach our goals. Whereas just a few months before, I didn’t think I needed to make more money.

Stop impulse spending. 

The thing about a no spend month to save money is that it made me think about each and every purchase. Was it a need or a want I would ask myself. Would this purchase make my life better in the long run? Usually the answer was no.

Use up what you have.

This was particularly the case for food. Before I would go to the grocery store and buy things if I wasn’t sure I needed them since I was there. Instead, during the no spend month, I actually went through my pantry and fridge to see what we had and planned meals accordingly.

This accomplished two things: 1) We saved tons of money. 2) We cleaned out our pantry! Win-win.

Change your relationship with money.

What I also realized was that I got a rush from spending money. Spending money was an addition. Like it gave me power.

Now that I see that power in saving money and having the ability to buy things without putting them on my credit card or line of credit, is that feeling is 1000% better!

Frugality is freeing.

This may seem counterintuitive but it was true for me. And don’t confuse frugality with being extremely cheap.

During this time year, we still went a vacation and did other fun things. The difference is we planned for them and saved the money in advance.

I realized I enjoyed saving money because it didn’t affect our overall quality of life. I enjoyed finding the best price on everything.

In fact, I think our lives have improved because of being more frugal. We are making more home cooked meals, spending more quality time at home such as at-home movie nights, baking muffins, etc.

I no longer feel the need to make myself feel good by buying stuff. Retail therapy is a dangerous trap that I have freed myself from. 

Savings Tip: If I really want something, I make myself wait at least a full day. If I still want it and have the money, I will probably buy it otherwise I don’t.

How we saved $25,000.

You might be thinking “ok great, how did they save so much money?” 

The reality is that by these lessons learned, we kept going and continued to spend so much less money on the every day stuff that doesn’t add to our quality of life such as regular meals out, expensive clothes, etc.

Our mindset shift and the results we have seen have led us to save thousands of dollars every month. Just like spending money adds up, well saving money does too.

Further to this, we also focused on making more money. I took on more consulting work that I probably would have before.

Call to Action.

If you have trouble keeping your budget in line, you should try a no spend month. If you are worried you can’t make the month, go back to the SMART goal principles and determine what timeframe is achievable for you. Maybe you try a week first.

During your no spend month or whatever timeframe you select, pay attention to how you feel about spending money. Then, once you meet or exceed your goal, soak in that feeling and compare it to how you feel when you buy something that you don’t need. I bet the feeling you get from meeting your goal will be a lot better!

Remember, it’s about progress not perfect.

Tell me how it went and any additional tips for our readers!

I sincerely hope you found this post to be helpful and I deeply appreciate you reading it.

If you like this post, I would greatly appreciate it if you shared it!

how we saved $25K in one year by starting with a no-spend month