Even people who have a good understanding of their finances may find themselves questioning where their money goes. The urgency of this question is further heightened during times of economic turmoil, where a rise in living expenses and little to no increase in income results in a struggle to reconcile the disparity between their budgets and bank accounts.
Monitoring Finances Shouldn’t Be Abused
With limited opportunities to save on necessities such as utilities and food, people are seeking inventive ways to cut down on their expenses. These days, “no spend challenges” have emerged as a popular trend. Individuals aim to abstain from spending on non-essential items for a week, a month, or even longer while tracking their progress on social media, which makes frugality almost enjoyable.
While this is alarming, building good habits regarding finances, such as savings, can promote better financial practices in an approachable manner. Some technology companies have even incorporated game-like features and challenges, such as setting aside money every time it rains or establishing specific targets, to keep users engaged.
Saving Money Should Be Rational
Although saving money is beneficial, the no-spend trend can be problematic, and this is evident in its similarities to crash dieting. The weight loss industry has contributed to long-lasting psychological damage related to food, and the same disordered relationship with money can potentially be caused by no-spend challenges. By examining the trend on Instagram, it becomes apparent that there are many familiar themes that mirror the culture of starvation diets. These include color coding, with green indicating good days and red indicating bad days, self-criticism by individuals who purchase a new toothbrush, and critical or tough-love comments from others.
Similar to the discomfort experienced when eating unhealthily during a diet, spending can cause physical and psychological unease during a no-spend challenge. Just as a diet promises an easy solution to a complex problem, the no-spend challenge offers a simple fix with the click of a button. Despite all that, there is a positive side to being mindful of spending habits. It can increase self-awareness and prevent impulsive purchases that often result in anxiety and remorse. Sharing one’s spending habits with thousands of people can promote accountability, foster meaningful conversations, and provide a sense of solidarity through comments. This engagement can keep individuals motivated to continue saving and offer illuminating insights in various ways.
Rational saving can make a person feel more connected with their money and put more focus on how to stay in control of finances. It certainly is the first step of an ongoing process rather than a simple test done through a challenge based on deprivation and punishment. So, while challenges can be fun and saving is necessary, it can be said that no-spend challenges that go too far can have a detrimental effect and should be replaced with rational personal financial policies.