Can you handle a No-Spend Challenge?

My friend, today I’d like to ask you: can you handle a No-Spend Challenge? Do you have what it takes to commit, and stay the course when paying off debt! From personal experience, this can be easier up front, and more difficult as time passes. Stay focused, stay committed, and become financially free!

There are many things we cannot control in the world. Take charge of your finances, forge your path forward, and accomplish what you set out to do. My wife and I are here to encourage you on your journey and share what we’ve learned on our path so far. We look forward to hearing from you about your experiences, too!

“DOING SOMETHING ABOUT IT!” HOW TO DEAL WITH NON-MORTGAGE DEBT.

I don’t know about you, but I can’t stand being in debt. I hate it. Only a few years ago now, I remember thinking debt was just a normal part of society. It was something we just had to learn how to live with… Or so I thought! My wife and I committed to paying off all non-mortgage debt in April 2018. We entered a love-hate relationship with a No-Spend Challenge, made plenty of mistakes, and are still hammering at our debt. However, we’re through the worst of it which prompted me to write and share lessons we’ve learned.

I’ve seen a few definitions of a “No-Spend Challenge,” and for us it was as simple (or complicated depending on how you look at it) as removing all non-essential spending and dedicating it towards paying off debt.

I will be the first to tell you that the weight of the debt (such as student loans in our case) can be crushing, overwhelming, and can leave us feeling hopeless. I remember wondering “how did I get here”, and “how are we ever going to pay off this much debt?”, etc. 3 years in, my wife and I are happily seeing the results of our hard work. We’re down to “just” student loans and are stretching ourselves to finish this last year strong! We are on-track to pay-off our non-mortgage debt by 4/30/2022 and we couldn’t be more ready for that to happen. While it doesn’t feel any different yet, we are on-track to pay-off meet our goal 1 year ahead of schedule!

A SIMPLE EQUATION FOR YOUR NO-SPEND CHALLENGE

While we originally did not have a name for it, in the beginning, we did know that we wanted to pay off and get out of debt ASAP. We read a bunch of books, did reading online, and came across the concept of a “No Spend Challenge.” I don’t even remember all the material we covered – it was all a bit much at the time. I’m sure some of it was excellent. For us, our Rules of a No-Spend Challenge revolved around a few core principles: Staying Motivated, Aggressively Paying-off Debt, and Staying Sane.

If you fail, and chances are that you will along the way, don’t take that as an excuse to give up and quit. Failing and struggling is part of life! You’re not going to get stronger without some element of failure along the way. The only true loss is when you decide not to try again. My friend, you can do this!

Rule 1: Motivation – Stay the Course when Paying Off Debt

During a No-Spend Challenge, one of the most difficult things was (and is) staying motivated. The days can feel quite long, and the consumerism-based culture we live in doesn’t help with not spending money. My wife and I often joke about the ancient Greek story of Sisyphus perpetually rolling a (debt-sized in our case) boulder uphill.

“Set Coordinates!”

We wrote our goals down, and we tried to be “realistic” in our approach. Joining with a group of similar focus was also really helpful. More than I realized it would be. On the same point, try to avoid the people who drag you down and bankrupt your effort! Instead, we try to surround ourselves with like-minded people who are also trying to accomplish similar goals in their life. For example, I have a long-time friend whom I’m happy to say I’ve known since childhood who has made it further down this road toward being financially free. Talking with them is very encouraging!

My two-cents: get serious, declare your intentions (say it out loud), write it down, roll-up your sleeves, and then get started. Track your progress along the way!

Rule 2: Fire-up the Flame-Thrower and Aggressively Pay-Off Debt

My wife is (and always has been) a fantastic person. One of her strengths is she is all about getting work done NOW. Why wait? As part of a joint commitment to this debt plan, we’ve shortened our timeline and have surprised ourselves with how much we’ve been able to pay off. Honestly, the COVID-19 pandemic has probably helped with reducing financial distractions, too. (probably trying to find some silver lining there, too!).

Get on a Budget (and never get off):

This would not have worked to any degree without a budget. We’ve talked about budgets a lot with this blog, and feel they are absolutely essential to achieving success. Try a basic one, and use it as a starting place. You don’t need to be an expert before getting started, and it gets easier with time. Try using Mint! If it isn’t on the budget ahead of time then don’t do it. The budget is your gatekeeper and your best friend in this exercise!

Reduce Expenses:

Break out your pencil, sharpen it, and start crossing out all non-essential content from your budget. Reduce at a minimum, and eliminate when possible. We were surprised what we could do without!

We found some success in areas such as our food budget, such as dropping Amazon’s Subscribe and Save plan and eating healthier food. (By comparison, eating out is VERY expensive.) Additionally, we hammered away at our cellphone bill and were able to save money each month there as well.

We also made a point to reduce all non-essential investing (basically, everything accept for the company match on the 401(k) and a small emergency fund).

In short, trade today’s consumption for a better tomorrow! Every bit counts.

Increase Income:

The first two took us some time, and it worked for a while. However, in the end, we wanted to get through it quicker! The next thing we needed was more money. I was fortunate to step out of a frustrating career path into an excellent opportunity which also paid more. My wife was also able to pick up a part-time job online as well. Together, we’ve been able to increase our household income by about 30% all of which we’ve been putting toward debt.

Where’s it all going?

With expenses reduced and income bumped as much as we could we needed to make sure we had a good plan for targeting the debt in a logical order. Personally, we targeted the quick-wins (those that would free-up cash flow quickly, 3 months or less), and then targeted the high-interest loans. This balance also provided us some psychological “wins” as well which was a big morale boost.

Rule 3: Keeping your No-Spend Challenge on the Rails: Stay Sane!

Life still goes on, and we had to find a good balance between “living” and also getting out as quickly as possible. Due to our situation, we initially knew we could not get out of debt within 1 year or less. With that in mind, we did our best to exploit every opportunity without causing harm to our future (e.g. retirement and relationships). For example, we did not cash-out our 401(k), and we did not “skip” Christmas.

We contributed enough to get the match from my employer, and stopped there. We did less for Christmas, but money isn’t the only factor for a good Christmas anyway!

In my opinion, physical, mental, and spiritual health are essential. Even more so when you’re pushing yourself hard! We made time to work out, go for long walks at the park with our children, and otherwise try our best to stay active.

Mêtis in our ‘No-Spend Challenge’ Matters

All said, my wife and I are working on about six figures of non-mortgage debt. The path has been tough, but it hasn’t been impossible. For all the tough moments, there have been many positive ones that more than balance it out. We focus on the freedom this will bring us, and try to take the guesswork out of it by automating our payments, etc. With better days ahead and history in the past, we look forward to hitting our mark!

Along the way, we’ve also tried to avoid “checking” on the progress too frequently. We do track debt progress, but daily is too much and leads to feeling overwhelmed. For us, we try to check-in monthly and note our progress accordingly.

Make no mistake, we have taken our share of bumps and made mistakes along the way. We refuse to stop trying and it is working out well! Additionally, we have found success in celebrating success along the way. Break the mountains into boulders, boulders into rocks, and the rocks into gravel. Before long, the project feels less intimidating: by keeping after the gravel you’re soon knocking over mountains of debt.

I hope this is encouraging to you, and I wish you the best in developing Mêtis in your Money Matters!