This personal finance strategy has the potential to backfire.
The personal finance world is awash with different strategies and challenges aimed at reducing spending, avoiding debt and bulking up savings.
This time of year, you might encounter people trying out “No Spend November.” But finance experts warn this challenge is not for everyone, and there are some serious drawbacks to consider before you embark on it.
“No Spend November is a challenge to avoid spending on anything outside your essentials like rent or mortgage, groceries, health care, bills and gas,” explained consumer finance and budgeting expert Andrea Woroch. “The idea is that there are many spending temptations this time of year and the holidays often lead to debt.”
By committing to the challenge, you’re making a conscious effort to reduce thoughtless spending and build up your savings. “Some people may do this to bolster savings for gifts and other holiday expenses … while others may do it to simply reduce wasteful purchases that inevitably come about this time of year,” Woroch noted.
By pressing pause on nonessentials, you can get comfortable saying no and become more intentional with your financial values. As we enter the holiday season, retailers are also dialing up the pressure to buy, buy, buy. No Spend November helps consumers resist the temptation and avoid impulse purchases.
“No Spend November isn’t actually about spending nothing ― it’s about only spending on necessities and avoiding discretionary spending,” said Bobbi Rebell, a certified financial planner and personal finance expert at CardRates.com. “That said, it is up to everyone to set their own rules, and exceptions are often made for things like holiday gifts that are planned. The same goes for planned social activities.”
That said, the extreme level of commitment to saving that a true No Spend November requires comes with potential downsides.
Here’s how ‘No Spend November’ can backfire.
“It can feel like a crash diet but with money instead of food and drink,” Rebell said. “Even if you stick to it, it can leave you feeling deprived and sad. Just like with a diet, you can quickly lose all the progress you’ve made when the month of controls wraps up.”
After feeling so deprived, many people overcompensate once the challenge is over.
“Restricting yourself for an entire month during a time when there are many temptations, could lead to burnout and a buying frenzy in which you end up spending even more when December rolls around,” Woroch noted. “In fact, there could be some psychological effects at play such as rewarding yourself for going a whole month without spending by splurging even more on something you don’t need.”
There are also social implications that can be problematic.
“I think people could also fall into a bit of a depression if they were to not spend any money outside the essentials as it could mean missing out on joyous occasions with the people you care about like going out to a holiday meal with friends or catching a holiday show with a family member,” Woroch said.
Although you don’t have to spend a ton to enjoy this season and a simple budget can help keep things in check, being too restrictive has the potential to backfire if you aren’t prepared to deal with all the implications.
“It can also be tough on relationships if you constantly turn down social invitations that cost money,” Rebell said. “It is a delicate balance. Staying home can make you feel lonely and isolated, which is especially tough in the holiday season.”
Focusing your spending cuts on one particular month may lead to unnecessary misses as well if you strictly hold yourself to the pledge.
“You may end up saying no to something that is truly once in a lifetime like attending a friend’s destination wedding or seeing your favorite band live in concert,” said Julien Saunders, co-author of “Cashing Out” and co-host of the “Rich & Regular” podcast.
The choice of month in particular could also be an issue.
“November is an especially tricky time for a no-spend challenge, as some of the best shopping deals can be scored during Black Friday and other retailer-specific sales this month,” explained Jack Howard, the head of money wellness at Ally Financial. “Cutting back on nonessential purchases right before the busy holiday shopping season may cause you to miss out on sales that give you more value for your dollar.”
In addition to missing out on annual discounts that allow you to stay on budget overall, you may run into inventory issues once the month is up.
“Popular items that are on sale early could sell out, so you may not get a chance to buy specific goods you need or want to gift in December before the holiday,” Woroch said. “You could run into shipping delays by waiting to order online late in the season and that could mean that gifts don’t arrive in time for the holiday.”
She also cautioned against putting extra pressure on your budget to buy everything you need for the holidays ― gifts, decor, wrapping paper, etc. ― in December with your last two paychecks of the year.
“Shopping earlier and spreading out purchases through November allows you to manage your cash flow better,” Woroch explained. “Waiting until December to make all your purchases can also cause more stress. There are so many things going on in December and finding the time to shop may be difficult! Plus, stores are busier so the whole shopping experience is more stressful overall.”
Are there any real benefits to ‘No Spend November’?
“No Spend November is a powerful way to boost your savings, reset your spending habits, and figure out what’s truly essential,” said “Crush Your Money Goals” author Bernadette Joy Cruz Maulion. “Think of it as a month to get clear on where your money actually goes. Plus, it’s a great way to get a head start on your holiday savings or financial goals without feeling deprived. It’s empowering to see how small changes can lead to big wins!”
She enjoys participating in No Spend November as an empowering way to wind down the year and distance herself from the overwhelming consumerism this season brings.
“November has turned into an entire month of deals, which creates a buying frenzy and can lead to unnecessary spending,” Woroch noted. “Committing to a no-spend challenge for the entire month of November can cut out wasteful spending and help you avoid debt.”
A recent spending report from NerdWallet found that 28% of shoppers who used credit cards to pay for holiday gifts in 2023 still hadn’t paid off their balances by September of this year. No Spend November can be a useful tool for people in debt to avoid getting caught up in the holiday hype, adding to their balance and getting charged even more interest.
“It creates a sense of control and financial awareness,” Rebell noted, adding that the challenge creates a mandatory waiting period for bigger purchases too. “If, after the month of November is over, we still want something, that means it must be something we do really want and may be worth the money to us.”
These kinds of challenges create accountability by forcing participants to implement specific spending goals in their everyday lives. The idea is to slow down your buying process and become more present and mindful with spending.
“No Spend November can help realign spending values and invites you to rethink the why behind each purchase,” Howard explained, adding that it serves as a reality check to help consumers identify what’s actually essential. “A person may realize they are overspending only because they’re trying to keep up with friends, or maybe something they saw on social media. Being hyper-aware of where you’re allocating your funds opens the door to resetting your financial values, goals and mindset to what matters most to you.”
How can people find balance in order to save properly?
“I don’t think most people will succeed in sticking to a no-spend month especially around the holidays,” Woroch said. “It’s best to set a realistic budget by thinking beyond just gifts and considering all the other seasonal purchases and expenses or experiences you are likely to spend on.”
Limiting purchases that fall outside your holiday budget and gift list is a better approach to deterring unnecessary spending around this time of year, she added.
“If the thought of a full-on ‘no spend’ feels like too much, how about trying ‘Low Spend November’ instead?” Cruz Maulion said. “Choose one or two spending areas to focus on ― like maybe swap Uber Eats for cooking with a friend or postpone the Target runs until Dec. 1. Another fun option is setting a weekly saving goal and challenging yourself to stick to it. Whatever you choose, make it your own!”
Alternatively, try a no-spend week or two in November to cut back on wasteful purchases. Or commit to three no-spend weeks out of four in the month to give yourself a break around Thanksgiving.
“Consider a one day a week no-spend day,” Rebell suggested. “You won’t miss out on any sales and you can often put something on hold so you generally won’t have issues with things selling out but it will help you ‘hit pause’ and be more aware of your spending.”
She emphasized that a “consistent and realistic” strategy is more likely to set people up for long-term success. There are many different approaches you can take, and there’s no such thing as a one-size-fits-all solution.
“Those who feel stuck in a cycle of overspending or who are making money decisions that don’t reflect personal goals should consider financial education that uses the principles of money psychology,” Howard noted, pointing to Ally’s Money Roots program, which aims to help people better understand and improve their spending behaviors.
She also suggested implementing other forms of mindfulness like meditation and figuring out which methods keep you most engaged.
On the more practical side of things, consider putting your credit cards away during holiday sales events and paying with cash.
“This forces you to limit your spending and stick to whatever budget you set for gifts or other purchases,” Woroch noted. “If you are carrying debt leading into the holiday season but don’t want to commit to a no-spend challenge, use a balance transfer card to buy you time to get through the season without additional interest fees piling up. Then, you can commit to a no-spend month in January, allowing you to put more money toward your balance so you pay it off before the no-interest period is up.”
She also urged people to set gift expectations with their loved ones and even suggested cutting back by just focusing on the kids or setting up a Secret Santa exchange so you only have to buy one present instead of many.
“When it comes to work associates, friends and others, come up with less expensive gift-giving alternatives,” Woroch said. “Bake your famous cookies, gift services you’re good at like family photos if you’re skilled with a camera, or just spend time together.”
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