Saving Money
08.20.24
Budgeting and saving money have always been key themes of every New Year’s resolution. In fact, this year is the first year where “saving more money” has taken the number one spot for the most common New Year’s resolution. If you’re one of the millions of Americans thinking about how to better manage and save your money in the new year, one extremely effective method is the “no-buy (or “no-spend”) year.
I know, because my feed has been flooded with content from people who have done it, and I've seen the benefits first-hand. So to help you reap those same benefits this year, I've put together a guide on how to complete a no-buy year and actually enjoy it.
1. Make your no-buy year goals
Before you start on anything, make a clear goal that will help keep you going. It can relate to debt repayment, a savings goal, or both.
Without a clear goal, it’s going to be easy to lose motivation a few months in and abandon the venture. Make a goal, and track how far along you are to that goal every month. Trust me, the results alone will be enough to keep you motivated.
2. Write down your “essential” expenses
Before you start your no-buy year, you’re going to want to be able to differentiate between what expenses have to be made, and which ones can be avoided during the no-buy break. Lay out your monthly expenses from the previous 3-6 months and figure out the average amounts for essentials like: utilities, food, toiletries (toilet paper, toothpaste, soap, etc.), and transportation. You will also need to include fixed costs like rent/mortgage, insurance (if applicable), and any other bills you may have.
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3. Make a list of all the “non essential” expenses
On the flip side, in order to encourage accountability during your no buy period, it’s equally – if not more – important to list out all the expenses that would be considered non essential. These can include takeout (including coffee/lattes), clothes/shoes, jewelry, video games, travel (with some exceptions), and anything else you deem applicable.
Note that I didn’t include categories like makeup or skincare/haircare because the point of a no-buy year isn’t to abstain from buying anything, just not anything that is unnecessary. Now, unless you have 5-10 of the same products lying around, it’s entirely reasonable to buy a new moisturizer when you run out of your current one. But it’s important to be held accountable as to how you are replacing products – if you already have 3 different kinds of moisturizer, do not buy a new one when one is finished. You are meant to finish the other two before buying your next replacement.
4. Make a monthly budget
A year is a long time, so it’s easier when you can break it down into smaller, monthly chunks.
Now that you know which monthly expenses are essential, and what they amount to, you can easily plan out how much you’re going to spend – and how much you’re going to save. If you don't know where to start, follow our easy guide on how to budget and save money.
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5. Make a savings plan
Now that you know your monthly input/output (how much is coming in, and how much is going out), you invariably also know how much is left over. To avoid caving in and using that leftover money on unnecessary buys, make a plan for it.
If you have debt, set up an automatic withdrawal/payment to the lender that is holding that debt either bi-weekly if it matches your paycheques, or monthly. You’ll be surprised to see just how quickly that debt starts melting away! Again, remember to leave some money on your account for the “unexpected” expenses.
If you don’t have debt, or it’s planned to be paid off before the end of the year, make a savings plan! With inflation these days, leaving that money sitting in your chequing account is doing yourself a disservice – that money’s value drops every day. Instead, look up what makes the most sense to you: a high-interest savings account, a 401K or a Roth IRA, an investment account, anything that helps your money grow!
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6. Make your no-buy rules
The no-buy year sounds great when it’s on paper, but in practice, it requires a lot of discipline, which requires rules. No-buy year rules differ person to person – some people quit cold turkey, meaning they implement strict rules of no spending on anything outside of the essentials, period. Some are more realistic and set guardrails that allow them to spend in a very controlled manner. For example, only going out to eat/getting takeout once a month, or allowing themselves to buy 1-2 new items of clothing every season. At the end of the day, the rules will have to be set by you, and make sense for your lifestyle. You may choose to include one vacation a year, but only if you’re able to save up for it and pay for it with your sinking fund.
Write down the list of rules that feel manageable but still allow you to meet your debt repayment/savings goals by the end of the year.
7. Prepare ideas for no spend activities
The hardest part of a no-buy year is the inability to participate in most social gatherings. Plan for it, and make the transition easier by coming up with ideas for social activities that don’t have to cost anything – game nights with friends with existing materials, walking/running groups, book exchange clubs, indoor movie nights, potluck dinners, the possibilities are greater than you think! You’ll find that it’s the time spent together that you look forward to, not the location or activities.
8. Give yourself some grace
Lastly, and most importantly, remember to be kind to yourself. It’s nearly impossible to have a perfect no-buy year, and you might slip up during that time. And that’s completely OK – as long as you remember the goal you set for yourself at the beginning of the year, and continue working toward it.
Getting close to the goal, even if it’s not 100% completed is still a major accomplishment, and you will still be at a much better spot financially at the end of the year than when you started it.
A beginner’s Guide to a No-Buy Year
What is a No-Buy Year?
A no-buy year is a year in which you don’t buy anything that is unnecessary. So it’s not a strict $0 spend strategy – that would be impossible, as you still need to eat! But other than the established essentials: rent/living costs, food, transportation, bills, etc. you do not spend any money on anything else.
What are the rules of a no-buy year?
The rules are meant to be set up by you. Some people might choose to be strict and limit spending to only essentials, and only when absolutely necessary, while others might give themselves more leeway, like setting up a rule that they can only buy 1-2 new pieces of clothing every season, or they can book a vacation if they set up a sinking fund for it.
There has been a flood of people recently talking about their no-buy year plans and rules online on Instagram, YouTube, and TikTok, and you’ll be sure to find a lot of first-hand experiences to figure out what would work best for you!
What are the advantages of a no-buy year?
The most important and obvious advantage is: saving money. By cutting out unnecessary expenses, you can save a lot of money. I’ve seen people claim they saved 60% of their take-home income, others say they managed to pay off $30K worth of debt. That’s not petty cash– that’s a hefty debt repayment, or a fat deposit into a savings account.
Other advantages also include:
Mental health: Reduced or no debt and readily available funds for rainy days can do wonders for your overall stress and anxiety.
Reduced waste: By using up the products you already have rather than buying new ones constantly, you’re forcing yourself to create less waste and learn how to make something last.
Newfound appreciation for existing items: This may more directly apply to items like clothes, shoes, or even home decor, but it truly does force you to get creative with your own closet and find ways for existing pieces to give you joy again.
What are the disadvantages of a no-buy year?
I’m not going to lie to you, a no-buy year is hard. The reward is absolutely worth the days of struggle you may face, but it’s worthwhile to be prepared for the cons of embarking on this no-buy challenge:
FOMO: You will likely face situations where you’re forced to miss out on dinners, getaways/vacations, or concerts/shows, which can lead to feeling left out and general displeasure.
Quality of life: While saving and paying off debt will greatly improve your quality of life in the long run, while you’re in a no-buy year, you may feel like your quality of life is reduced without vacations, regular nights out, or what I like to call “little treats.”
All in all, the disadvantages are mainly social and can be easily amended by finding other creative ways to spend time with family and friends in a manner that doesn’t involve spending extra money.
How to stick to a no-buy year
There are a lot of great tips from real people who have done a no buy year (or months) you can find online, so we’ll start by advising you to flood your feed with people who are doing the same thing.
There are plenty of budgeting creators online, and others who aren’t experts in anything financial but decided to take back control of their finances by committing to a no-buy year. If you haven’t been exposed to it, underconsumption is a growing online trend, and for good reason – people have had enough of buying and not saving. When you’re only watching content online that reinforces your own new shopping/saving habits, you save yourself a lot of the FOMO you’d be experiencing otherwise, and get motivated by everyone else’s commitment. It’s like taking a gym class rather than doing it solo – you do a lot more, and feel a lot stronger.
