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A friend recently brought up the idea of a no-spend January, and I realized how little people understand about this. What is it and will it help you?

When it comes to budgeting and money, we’re all looking for ways to save money. It doesn’t matter what you do for work, or how big your family is. The cost of living is going on considerably, and we all need to find a way to cut back on expenses while we add some income to our pockets.

One of the options is a no-spend month. A no-spend January is popular as it comes off the back of Christmas, one of the most expensive times of the year. What is it, and is this really going to help you get your spending under control?

What is a no-spend January?

The concept is as it sounds. The idea is that you don’t spend any extra money* than you need to throughout the month of January. Even when you need to spend the money, you cut back on the necessities where you can.

There are some expenses that you simply can’t cut out completely. These are:

• Your rent/mortgage
• Your utility bills
• Groceries
• Debt payments
• Car payments such as gas and insurance
• Other insurance payments that you need to make

When it comes to your groceries, you’ll want to cut back. The idea is to focus on the essentials so that you start cooking from scratch again and you buy the cheaper no-name options instead of the branded items.

All those extra expenses, unless they really are necessary, don’t need to happen. That means no new clothing or shoes, no new music, no subscriptions to Netflix, Prime Video, etc, and no trips to the coffee shop.

How hard is a no-spend month?

I’ve done these no-spend months before. I’ve never done it in January, but that’s more because I don’t need to. The way I save for Christmas sets me up for a normal January. However, I do highly recommend doing these no-spend months.

Yes, they can be hard. The first time is the hardest. You suddenly realize what you’re spending your money on, and you see where you can’t just swipe your card. At first, it can feel really restricting, and you may want to throw the towel in. Just think of the money you get to put into savings at the end of the month when you see just how much from your paycheck you have left over.

The more you do it, the easier it is. If you’re struggling with budgeting, I recommend doing the no-spend January and then doing it once a quarter, at least.

Does a no-spend January help you with budgeting?

The big question is whether this is going to help you with budgeting in the future. On its own, the no-spend January challenge is great to get your finances back on track after Christmas and the New Year. It’s a great way to reset everything and figure out where your money is going.

If that’s all you want, go for it. If you want this to become a good budgeting tool*, you need to take a look at where you wanted to spend money and where you saved. This is more than a one-off thing to help you stick to a budget in the future.

It’s important to look at where you saved money. What have you spent money on in the past that was wasteful? How much of your income actually goes on your bills, and how much did you put away in savings because of the no-spend challenge?

From there, you can look at how you can do this on a regular basis. Of course, you don’t always want to cut out all the luxuries. That would be a boring life. However, you want to be able to cut back on some of them, or you want to know which luxuries you didn’t miss all that much.

One of the things that I found was that I didn’t miss eating out or ordering in that much. That got cut completely back so now the kids and I will do it once a month. If even that! Some months we don’t eat out at all and we look at some interesting recipes to cook in the house instead. As you find things that you don’t miss, you’ll be amazed by the amount of money that you save without even trying.

You’ll want to assess how you feel at the end of the month, and look at incorporating this into your budget on a regular basis, especially if you struggle with spending money.

MORE: 5 basic elements of a personal budget

Are you doing a no-spend January challenge? What are you doing to help with budgeting? Share your thoughts in the comments below.