How much could you cut spending? Economic concerns have some Americans setting a ‘no-buy’ rule

By Lane Gillespie Bankrate com Spend any time on FinTok the personal finance corner of TikTok and you may have heard of a no-buy month which is a budgeting challenge to not spend money on certain discretionary purchases for a month Whether you eliminate one spending category in particular or cut discretionary spending altogether the point of a no-buy challenge remains the same less spending more saving As Americans try to rework their budgets amid in contemporary times s economic challenges such as inflation and stagnant wages people are taking on variations of no-buy challenges to save more and change their spending habits These challenges come in a broad spectrum While specific people are just cutting a sparse expenses to free up room in their budget or are absolutely trying to spend less others are taking the more dramatic highway by cutting nearly all spending for a year Kelci Crawford a -year-old in Toledo Ohio is one such person Crawford has sworn off spending throughout the entirety of except for bills such as rent and utilities groceries replacements of needed items such as shampoo and a limited amount of mutual aid for friends and locality members They won t be spending any additional money on discretionary purchases Crawford a full-time freelance artist whose yearly income is below the federal poverty line has a goal to reach their target crisis savings fund this year and pay off a little less than of business and personal debt After looking at their budget last year they realized they couldn t afford to keep spending on discretionary purchases if they needed to meet their goal I caught myself overspending and I m like OK I ve got to do a hard reset I ve got to do a no-buy year Crawford says While cutting out all discretionary spending entirely for a whole year may guarantee you certain extra savings by December it s not realistic for largest part people Cutting out discretionary spending entirely is a major change and cutting out toys electronics and engagements may be especially arduous for families with children That s why a multitude of people doing a no-buy challenge are adapting it to meet their own budgetary requirements choosing to cut out only certain spending categories where they think they re overspending such as eating out clothing or beauty items No-buy challenges are proving popular as multiple Americans say their savings need a reset Nearly half percent of Americans would borrow money to pay for a major unexpected expense such as for an exigency room visit or car repair according to Bankrate s Emergency Savings Account Without that sufficient savings cushion a small crisis could lead to big consequences such as being unable to pay your bills which is also a concern for countless people About in percent workers are living paycheck to paycheck meaning they have little to no money left for savings after covering monthly expenses according to Bankrate s Living Paycheck to Paycheck Survey While the no-buy challenge isn t for everyone as Americans analysis low savings and as the cost of living continues to increase creative solutions like a no-buy challenge may be just what selected people need to stay the class in the present day s business activity Americans are adapting the no-buy challenge to fit their requirements Iris Ayala a -year-old content creator in Chicago has adapted the no-buy trend to meet her own goals To cut down on clutter and unnecessary spending Ayala made a long list of items she won t be buying in including makeup athletic clothing new equipment hair tools hair care and reusable water bottles So far she estimates she s saved about I moved into a new place and naturally when you move you declutter things you don t need anymore I looked around and I just had a ton of junk Ayala says That s what really inspired my no-buy year because I m looking at all these items I was buying just nonchalantly and it s all just money in the end that I threw away A no-buy challenge may save you money but there s no guarantee that it will break an overspending habit in the long run Without taking more measures towards a permanent mindset shift it could be easy to fall back on old habits and revenge spend when the year s up But four months in Ayala feels that the challenge has permanently changed the way she approaches spending Before she felt she was buying too numerous unnecessary items based on online trends or because she saw them advertised on social media not because she genuinely needed them Now thanks to the challenge before buying something she s more mindful about whether she s going to use the entire product and if she s going to get her money s worth I ve revealed a lot of benefits that aren t just financial Ayala says My wallet is feeling a difference for sure I didn t realize how much unnecessary spending I was doing now that I m a no-buyer But I noticed just having less clutter has been good for my mental soundness Money tip If you re curious about doing a no-buy challenge try cutting discretionary spending for one week per month or one month per year But take the time to examine your spending habits and understand why you re spending the way you are so you can avoid revenge spending as soon as the no-buy is up The economic system is incentivizing selected to cut spending Countless Americans are doing a no-buy challenge now because of macroeconomic concerns High inflation high credit card interest rates stagnant wages new tariff policies and widespread federal layoffs in have made it more appealing to focus on saving over spending Peter Cohan an associate professor of practice in management at Babson College breaks the appeal of the no-buy trend into two categories economic and psychological From an economic perspective a great number of Americans are worried about how the state of the market system will impact their finances Economists say there s a percent chance the U S will enter a recession by March according to Bankrate s Economic Indicator Survey Between a workable upcoming recession and the high prices Americans are facing this day particular people feel it may be smart or even necessary to dramatically pull back spending Related Articles Your Money Current blockades a woman s guide to building wealth What your net worth comment is telling you The new rules of airline loyalty programs Should you handle debt or build an urgency fund first How to recession-proof your grocery budget do s and don ts Meanwhile psychologically when someone has no control over commerce strategy or inflation choosing to spend less may also give them a sense of control over their finances according to Cohan From my perspective there are a lot more people feeling a great loss of control of their lives since the beginning of the year Cohan says One thing they certainly still control is how they spend whatever money they have Ayala for one is going to put that extra money she saved towards her exigency savings fund At present she has about six months of expenses saved but she says due to in the present day s economic uncertainty she wants to increase that by at least a couple of months I feel like we re uncertain about things even grocery prices Ayala says Everything at the moment is just up in the air with the political and economic landscape at the moment Having that cushion gives you a little more peace of mind and alleviates chosen stress Meanwhile Crawford is concerned the Trump administration s tariffs will affect their small business A major portion of Crawford s yearly income comes from selling art prints books and merchandise at fan conventions but the paper they use is imported from Canada and the acrylic goods they use are imported from China If those items are affected by tariffs it could affect the supply and cause prices to skyrocket which could affect Crawford s bottom line they say I m not sure how the Trump administration is going to affect me in the future Crawford says so I m just trying to hedge my bets and stick with the stuff that works No-buy How to take control of your spending If you re interested in doing a no-buy year or just interested in cutting back on spending over a certain time period these tips can help you get started Consider if a no-buy challenge is right for you No-buys will definitely save you money but putting restrictions on your spending overnight is a substantial challenge A no-buy challenge might be best for you if you re on a tight budget and are looking for creative approaches to save money Or if you re concerned about your spending and are looking for a way to change your financial habits a no-buy can buy you selected time to consider the reasons behind your spending and change your mindset You can start over with a clean slate when the no-buy is over If you re just looking to free up a bit of room in your budget but aren t interested in making a major lifestyle change consider other means of cutting basic costs like unsubscribing from unused subscriptions shopping for groceries using coupons and price-matching or cutting spending on brand-name goods Identify your goals If you re looking to save money this year it might help to set a specific savings goal Doing so would focus your efforts around a tangible benefit and motivate you to keep going Change is hard and saying no to certain habits is complex Melinda Opperman chief external affairs officer at Credit org a nonprofit credit counseling organization says Common goals that she sees in her work are paying down debt such as in credit card debt or in learner loans saving for a down payment on a home increasing your employer s k match to the yearly maximum saving for a new car Opperman also suggests announcing your goal and intention to save more money publicly so your friends and family can help keep you accountable That extra positive peer pressure can be the push you need to get you over the hump and meet your goals Avoid temptations Social media is a great tool to stay connected with your friends family and favorite online creators but it s also a great way to be bombarded with ads encouraging you to spend Help keep spending to a minimum by decluttering your phone and making it harder to spend money online You can do that by deleting the apps to your favorite stores unsubscribing from store texts and emails considering the -hour rule After putting an item in your online cart wait hours before hitting Buy That gives you time to decide if you really want to buy the item or if you re just impulse shopping using social media app settings to control what accounts show up on your feed curating your social media feeds to only show you people you re following not suggested content Utilize your savings to the fullest extent Once you ve begun spending less you ll need somewhere to put those funds Consider a high-yield savings account HYSA or certificate of deposit CD both of which can give you a higher rate of return on your savings than a typical savings account HYSA HYSAs are similar to standard savings accounts but pay a higher yield on your money often four times as much An HYSA can be a great way to keep your savings readily accessible and it s low menace if it s kept in an FDIC-insured bank CDs Unlike HYSAs which you can access hastily CDs lock your funds for a set period of time in exchange for a guaranteed annual percentage yield APY That APY is often much higher than a traditional savings account A CD term can last anywhere from around a month to years though three months to five years is more common Key takeaways As Americans reckon with high prices no-buy challenges which swear off preponderance discretionary spending have become popular online No-buy challenges are designed to help people re-examine their spending habits and save more money To optimize your own no-buy challenge it s major to identify why you want to do the challenge eliminate spending temptations and pick a savings account with a high annual percentage yield 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