‘No-Spend November’ Can Help You Find Leaks in Your Budget

Photo (cc) by Alina Sofia

November can be a rough time for personal budgets. By this time of year, many folks have already blown the financial goals they set for themselves in January.

Life happens. Car breakdowns happen. Layoffs happen. And then the looming end-of-year splurges arrive. Time to buy the insanely expensive plane ticket home for the holidays, or to keep up with the cousins who give rich gifts. Add to that the arrival of cold, dark weather, and November can really get you down.

Some folks are taking this malaise and turning it on its head, taking up a new trend called “No-Spend November.” It’s like a crash diet for your finances. Come up with a very limited budget for 30 days — no eating out, for example — and you’ll at least reset your checking account for the holidays.

As I learned recently from Chicagoan Nicole DiVito, there’s an even bigger benefit to No-Spend Novembers. Unlike crash diets, which often fail and see eaters regain their weight, No-Spend November can permanently alter your outlook on money and budgeting.

Last year, DiVito allowed me to come along for the ride as she tried No-Spend November. Single with roommates in an exciting city, she was concerned that her spending had gotten out of control, and realized that at age 27, after five years with a good job, she hadn’t managed to save any money.

So she decided that she would try to spend only $100 per week (excluding rent and transportation costs).

“Why am I doing this? The short answer is to substantially save while still paying down my credit cards,” she said last year. “Although I don’t have a history of overspending, I definitely overspent in 2013. By Aug. 1, I was up to $4,000 in credit card debt, and I knew something had to change.”

At the time, DiVito’s take-home pay was about $3,500 every month. She wasn’t living a lavish life: Her rent was a manageable $766 monthly. But her other bills added up, including: Cellphone ($140), car payment ($235), utilities ($100), and mass transit ($80) ate up a big chunk of her earnings. Essentially, she was spending more than two-thirds of her income on bills, before food.

November 2013 was the first month she kept close track of every penny she spent, and it was a real eye-opener. She spent $224 on food, for example, even after cutting all the spontaneous Tuesday happy hours out of her schedule. And her weekend entertainment budget was “shattered” because of two trips that came up. Still, she stayed within spitting distance of that $100 weekly goal, which set her on a great path.

“I successfully paid off two of my three credit cards, and my credit score jumped 25 points. In addition, one of my credit cards extended my credit line another $2,000. This is all great, and I couldn’t have done it without budgeting,” she said.

The real test of No-Spend November, however, is this: Did Nicole break bad habits and make new ones?

“One year out, I’d say No-Spend November practically saved my finances,” she said. “I’m debt-free … and have five savings accounts for various goals. Ultimately, No-spend November got me to take budgeting much more seriously, and it kick-started a more realistic – and thus more effective – budget.”

Taking inventory, without even committing to any adjustments, is often the most effective first step toward spending (and eating!) healthier. Many folks with money problems have lost track of where things go. Think of No-Spend November as a stress test, with a huge side benefit of revealing where the biggest budget leaks are.

For DiVito, the leak was pretty typical for a 20-something in an exciting city. Last year, nearly all of her leftover income was frittered away on fun.

“I think it was just concerts, shows, etc., and not budgeting so not realizing how much I was spending,” she said. “Now I budget every paycheck — allocating all of the money to savings or otherwise.”

No-Spend November had another, even more profound, impact on her life, however. She realized that if she wanted to remain in Chicago and have a secure financial future, she simply had to make more money. After looking hard at the numbers, she worked hard to secure a better gig that came with a nice pay raise.

“Ultimately, I realized that to really save and live in Chicago, I needed a higher salary. Hence why I started a new job two months after,” she said. “Getting the new job was definitely key. It was a little more than a 20 percent raise. But the difference all went to my retirement plan.”

Save More Tomorrow

DiVito deployed a technique sometimes called “Save More Tomorrow,” a favorite of behavioral economists. With Save More Tomorrow, workers promise to put some or all of their future raises directly into their retirement or savings accounts, before the added income gets lost in monthly expenses. Studies show that Save More Tomorrow dramatically increases savings rates.

It worked like a charm for debt-free DiVito, now halfway to her goal of having a $20,000 emergency fund.

She’s is realistic about the challenges facing others who might try the same thing, however.

“I wish I could say everyone could do this, but it really does take a certain salary level to do so. It’s hard for anyone to achieve savings and retirement savings with anything less than a $50,000 salary in a big city.”

Still, No-Spend November is a great excuse to kick-start your own budget examination. What is your biggest money leak? What could you do without, just for a month, that might at least give you a head start on those dreaded January credit card bills?

“I’d definitely recommend it. Even if you don’t quite reach your goal, it’s a great way to start thinking more positively and productively about your finances,” she said. “And I’d really like to emphasize the positive part. … So many people have credit card debt, school loans, or just nothing saved, that it’s easy to feel overwhelmed and down about money, to the point where you’re doing nothing about it because seeing progress seems so far away. But a little bit goes a long way.

“Budgeting really does take your money further, and No-Spend November is a great way to start getting financially organized.”

More from Bob Sullivan:

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Read Next
8 Things You Should Never Put in a Microwave
8 Things You Should Never Put in a Microwave

A microwave can be a busy cook’s best friend. But heating certain things in a microwave can cause disaster.

Avoiding These 5 Foods Could Save Your Vision as You Age
Avoiding These 5 Foods Could Save Your Vision as You Age

Millions of Americans may be able to prevent an incurable cause of blindness by making a basic change.

How to Achieve Your Financial Goals in 2020
How to Achieve Your Financial Goals in 2020

New year, new you. Get your finances on track with the help of these tools for investing, saving, budgeting and earning.

7 Steps to Keep Your Car Looking Like New
7 Steps to Keep Your Car Looking Like New

Take a few steps to preserve the beauty of your car, and you stand to get a lot more money at trade-in time.

How to Prepare Your Finances for Retirement in 7 Steps
How to Prepare Your Finances for Retirement in 7 Steps

Here is how to get your finances in shape for your golden years, one step at a time.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Most Popular
7 Kirkland Signature Items to Avoid at Costco
7 Kirkland Signature Items to Avoid at Costco

Even if it seems you save a bundle buying Costco’s Kirkland Signature brand products, they may not be the bargain they appear to be.

Am I Eligible for My Mother’s Social Security Benefit?
Am I Eligible for My Mother’s Social Security Benefit?

Can an adult daughter tap into her late mother’s benefit?

9 Things You’ll Never See at Costco Again
9 Things You’ll Never See at Costco Again

The warehouse store offers an enormous selection, but these products aren’t coming back.

3 Ways to Get Microsoft Office for Free
3 Ways to Get Microsoft Office for Free

With a little ingenuity, you can cut Office costs to zero.

This Surprise Factor Can Raise Your Risk of Dementia
This Surprise Factor Can Raise Your Risk of Dementia

Nearly half of U.S. residents may face this threat.

Organize Your Home With These 10 Thrift Store Finds
Organize Your Home With These 10 Thrift Store Finds

Resolve to be clutter-free in 2021 with these secondhand purchases.

This Gas Station Scam Is Victimizing More Drivers
This Gas Station Scam Is Victimizing More Drivers

For the second straight year, a growing number of Americans believe they’ve fallen prey to this scam.

11 Laws You Could Be Breaking Without Knowing It
11 Laws You Could Be Breaking Without Knowing It

Seriously? Fibbing about the weather is a crime? This and other little-known legal traps await the unwary.

11 Generic Products You Should Buy at Costco
11 Generic Products You Should Buy at Costco

Not all generics are worthwhile, but these are among the best from Costco’s Kirkland Signature brand.

These Are the 3 Best Used Cars You Can Buy
These Are the 3 Best Used Cars You Can Buy

These vehicles boast reliability, safety and long-lasting value.

6 Legal Documents Retirees Need — but Don’t Have
6 Legal Documents Retirees Need — but Don’t Have

Few retirees have all of these documents that are crucial to their golden years — especially during a pandemic.

13 Things Seniors Can Get for Free — or Almost Free
13 Things Seniors Can Get for Free — or Almost Free

There are many ways to get cheap or free services and goods after reaching a certain age.

8 Tips for Retiring Comfortably on Social Security Alone
8 Tips for Retiring Comfortably on Social Security Alone

It’s never too early to start learning how to live well while living on less.

Internet Providers Can’t Charge You for This Anymore
Internet Providers Can’t Charge You for This Anymore

Starting this month, your ISP no longer can bill you for this fee.

15 Painless Ways You Can Cut Costs in 2021
15 Painless Ways You Can Cut Costs in 2021

Follow these tips to save, so you’ll have money for things that really matter.

9 Small Expenses That Are Bleeding Your Budget Dry
9 Small Expenses That Are Bleeding Your Budget Dry

Keep more of future paychecks by eliminating these budget-busting unnecessary expenses.

The 4 Best Things to Buy in January — and 4 to Avoid
The 4 Best Things to Buy in January — and 4 to Avoid

As a new year dawns, deals abound for some types of products. In other cases, it pays to wait.

11 Huge Retirement Costs That Are Often Overlooked
11 Huge Retirement Costs That Are Often Overlooked

Does your retirement budget account for all of these costs?

7 Bank Accounts With Extra Perks for Seniors
7 Bank Accounts With Extra Perks for Seniors

These accounts offer exclusive discounts and other perks — including interest — to older customers.

View More Articles

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Add a Comment

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.