What Is a Spending Freeze, and Does It Actually Work?
There’s no argument that the best way to save money is to avoid spending it — period. That’s the “truth” that drove me to my first spending freeze a few years ago.
A spending freeze is a challenge that you make for yourself to refrain from spending money for a fixed amount of time. A no-spend week or weekend is a common way to cut back on your spending and reset your finances. I’ve even heard of a few people taking it to the extreme and trying to pull off a no-spend month.
A tool like Trim can analyze your spending and automate ways to save. But if you still tend to overspend (especially around the holidays) or make unplanned impulse purchases all the time, a spending freeze can motivate you to get by with less and appreciate more of what you already have so that you can use your money to meet other financial goals.
That said, while it sounds like a great idea from the outside looking in, I’ve tried going on a spending freeze a few times before and had mixed results.
The first time around, I wasn’t successful. But after I made a clear plan and understood my strengths and weaknesses, I started using it as an effective tool to improve the way I manage money.
Finding Out What Doesn’t Work
One of the great things about going on a spending freeze is that you get to decide when you start and what you can and can’t commit to.
For example, I probably wouldn’t be willing to try a spending freeze during the month of January, even though it might be a popular time for some people if they want to get things back on track after the expensive holiday season.
January is a big birthday month in my family, so it’s hard to cut out or avoid extra expenses. However, most other months I’d be willing to try a no-spend week with fewer distractions and obstacles.
The Downside of a Spending Freeze
The one potential downside about going on a spending freeze is the fact that it can seem quite limiting if you give yourself tons of rules to follow.
If you can’t spend money on things you normally spend money on during the week, it might disrupt your normal schedule or even prompt you to overspend the following week, which would defeat the purpose entirely. Or if you’re just going to shift your spending around and buy the things you want anyway, then a spending freeze might not be the best thing for you.
When I plan a spending freeze or a no-spend week, I usually try to get my whole family on board.
We determine what, if anything, we’ll consider “approved spending.” Usually, if an important expense like our rent or utility bills are due or my husband needs to fill up his tank to get to work, we’ll spend that money like we normally do.
When it comes to other expenses like going out to eat, picking up an extra item in Walmart, or buying tickets to an event, we won’t spend money, since those expenses aren’t necessities and weren’t planned. This helps to determine which areas of your budget need improvement. You can then focus on cutting them out if possible during your spending freeze.
Food is a major expense for many families. This is why I love having the opportunity to eat through the cabinets when I try a spending freeze. When you feel like ordering takeout or running out to buy more food, odds are that you have enough in your fridge, freezer, or pantry to make a snack or meal.
Recently, my son had a musical performance at his school and I wanted to celebrate by having dessert at my house afterward. Instead of running out to the store to buy cupcakes, I looked in my cabinets. I found a box of cake mix, so I baked a cake and didn’t have to spend extra money.
But if you absolutely must go out to buy groceries, apps like SavingStar can help you cut costs.
A spending freeze forces you to be creative and find ways to make things work in other areas of your budget, as well. You might find new ways to entertain yourself or learn how to fix something around your home with the tools you already have.
Having a successful spending freeze is more about discipline than it is about saving. You must be fully committed to the rules you set and want to lower your spending to meet your goals.
And while you’re at it, sign up for Trim, a virtual assistant that analyzes and negotiates your gym memberships, box subscriptions, media subscriptions, and even cable TV contracts.