309 | Why No Spend Months Don’t Work and What to Do Instead

No spend months are commonly used but don’t work.

In fact, they sometimes even make things worse.

In this episode, let’s talk about why no spend months don’t work and a better way to create positive change in your finances.

• • when people use no spend months
  • why no spend months don’t work
  • applying the thinking behind no spend months to health
  • creating a more sustainable way to manage your money

• Apply for a strategy session

You’re listening to Personal Finance for Lawyers. I’m Rho Thomas, and as a busy wife, mom, and former Biglaw associate, I know all too well the tension between the culture of the legal profession and pretty much everything else you want to do in life. That’s why each week, I’m bringing you the information and tools you need to improve your money mindset and manage your money to create true wealth. Because ultimately, it’s not about the money. It’s about the freedom and flexibility the money affords.

Hey friend. Welcome back.

Today, we are talking about no spend months. This concept comes up in my conversations from time to time, and I often see things like this on social media, and I want to talk about it because it is a common tactic that doesn’t work.

Typically, the concept of a no spend month comes up when someone is overspending. They aren’t where they want to be with their finances. Maybe they’ve got some debt, all that kind of stuff. And so they’re like, you know what? I just need a no spend month to get myself together.

But the issue is, doing a no spend month does not change the underlying behaviors and habits that got you to where you are with your finances. And when that no spend month is over, you’re going to go back to those same behaviors and habits that you had that led to the situation that you don’t like.

Sometimes even, because people have been deprived for so long, they over correct, and they go and they’re spending even harder than they were before. So then they’re in a worse position than they were before the no spend month.

I like to think about these concepts around finances in the context of other situations outside of money because sometimes I think it helps to illustrate the point that I’m making. So with respect to the no spend month, let’s take it to health and eating.

Let’s say there’s somebody who has been overeating. They are not where they want to be, health wise or weight wise, and so they decide one day, you know what, I’m just not going to eat for a month. That’s going to change everything.

When we put it in that context, you can see how ridiculous it sounds because that’s not healthy. And I know that eating is a little bit different from spending, right? We’re talking about your actual health, your livelihood and that kind of thing, but still, like if someone just decided not to eat for a month, that doesn’t change those underlying eating habits, the way that they relate to food, how they’re eating, how often they’re eating, how much they’re eating.

The same is true with your spending. Just because you decide not to spend for a month doesn’t mean that you’ve changed those underlying habits with how you’re spending money, what you’re spending on, whether you’re making plans and thinking about your spending or just doing it. Those are the things that you have to change to see lasting change in your finances.

The no spend months might feel great in that moment, in that month, but it’s not sustainable because you’ve got to change the underlying behaviors. And so I want to spend the rest of this conversation talking about creating your plan and how you can manage your money in a way that is sustainable and leads to the results that you want.

As we have talked about many times before, the first thing is getting clear on where your money is going now. Because most of us don’t know, right? You don’t know how much money you actually get in your account each month. You don’t know how much is going out. Let’s get a clear picture of that. So find out how much money you are getting in your check, like you might know, oh, I make X amount a year. That’s great. How much of that do you see? How much do you have to work with in a month?

So get that clear idea of how much money is coming in, and then let’s look at how much money is going out. I have my clients look at their expenses for at least the last month, but ideally you look at the last three months because if there are fluctuations, if there are special occasions, birthdays, anniversaries, things like that, that might come up and kind of blow up your month, but that’s not typical. So if you look at three months, then you get a nice average. That’s a quarter of the year of your spending. So let’s figure out what’s going on with your money first.

From there, decide if you like what you’re seeing. And when you are making those assessments, think about the things that are important to you. What do you value? What is it that you want to be spending money on? What are those things that are important to you? Those are the things that we want to make sure that you’re directing more money toward.

And what often happens is, when we do this assessment, we do this analysis, and we’re looking at where your money’s been going versus the things that you say are important to you, or the things that you or the things that you say you value, a lot of times, there’s a mismatch there where you’re spending a lot of money on a bunch of stuff that you don’t care about, and you’re not spending, you’re not spending money on those things that you do say that you care about. So let’s make sure that you are looking at the things you value, the things that are important to you, the things that bring you joy, the things that improve your life, right?

Those are the things that we want to make sure you are spending money on. And then where you’re spending on things that don’t make that list, you want to be cutting back on that spending. That’s how you adjust your spending in a way that doesn’t feel like deprivation because you are still allocating money to those things that are important to you, and the things that you’re cutting are the things that are not as important.

So we’re looking at where is this money going, and comparing that to the things that are important to you or that you value. Where you need to make adjustments, make those adjustments. There might be areas that you didn’t realize you were spending as much as you are, and you can cut it back. There might be areas where you’re not spending and you would like to be putting more towards that. You can adjust that there.

But we want to create a plan for your spending that says, I want to spend this much in this category, that much in that category, etc. And you can make those categories as broad or as narrow as you would like, but you want to have a plan for how much you’re going to spend in these categories each month, and you want to make that plan so that you are spending less than you’re making.

So we talked about how much money is coming into your account in that month. The money that’s going out needs to be less than that because that money that’s left over, that gap between the amount that you’re making and the amount that you’re spending is the money that you use for your goals. So things like saving, paying off debt and investing.

Ultimately you’re going to allocate every dollar that is coming in, but we want to make sure that all of that money is not going to spending because we need some of that for the saving, the paying off debt, the investing. The larger you can make that gap between the money that’s coming in and the money that is going out, the faster you’re able to achieve your goals and build wealth.

From there, it’s just a matter of prioritizing your goals. What is it that you need to be doing? Do you have an emergency fund? Do you have savings for things that you know are coming up? Are you investing? Do you have debt that you need to be paying off?

Figure out which of those goals is most important to you because you can prioritize them and direct that extra money toward whichever goal you want to tackle first. There are some goals that you might be doing concurrently. For example, if you are paying off debt, but you’re also investing in your retirement fund at work, right? Those are things that you’re doing at the same time, but ideally you’re focusing on one goal at a time, and that means things like building an emergency fund or paying off a credit card or whatever other goal it might be. Because when you try to spread your effort, it makes everything take a lot longer versus if you focus in, you do one thing at a time, you hit it faster, and then you move on to the next thing.

So this is why I say you don’t need a no spend month. You need an intentional plan for your money. You need to change how you are using your money, the habits that you have with your money, the way that you think about money, so that you can keep that spending in check and be able to direct more of your income towards the things that are important to you. And if you need help with this, sign up for a session, head to rhothomas.com/apply, and we can talk about what that plan looks like for your life.

All right, that is it for this week’s episode. Thank you for being here, as always. If you haven’t done so already, please subscribe to the show and leave a review. Both of those things help the podcast platforms to push this show to other lawyers who could use this information. And as always, I appreciate your support.

As we close out, friend, I pray that you take the information you learn here, apply it in your life, and open up to the realization that wealth is available to you. As you do that consistently, week after week, you’ll continue to take steps to take back control of your time build wealth, and live the life of freedom and choice you deserve. Talk to you later.