No Spend January trend encourages money-saving habits

A trend taking off on TikTok is encouraging people to save money this month by not buying anything new or unnecessary.

A scroll through the #NoSpendJanuary hashtag shows people giving a breakdown of their typical monthly spending habits and how they hope to cut back in the new year through the money-saving challenge.

One TikToker, Libby Brooks, claims she paid $19,741 in debt and saved $10,400 by cutting costs in her life last year. Brooks’ goal for saving in the new year is almost quadruple of what she saved in 2023 — $39,000.

“In 2023, I finally finished paying off all of my private student loans,” Brooks told her followers. “And while making the minimum monthly payments toward my federal student loan, I had a pretty big epiphany in 2023 about what it means to build wealth.”

While some people plan to not spend anything this month, some added exceptions to their “no spend January” list, including TikToker Jen Smith. Smith will still buy groceries for the month. But rather than racking up a $150 to $200 grocery bill per week, she’ll cut it down significantly to $50 weekly. She admitted thinking ahead made it easier to plan for the month.

“I looked up free events, so when I get invited somewhere that costs money or I’m just feeling bored, I already have a list of free options/alternatives available,” Smith wrote.

The average American household spent $72,967 in 2022, according to the U.S. Bureau of Labor Statistics, or just under $200 a day.

Experts with GOBankingRates recommend using the 50/30/20 rule for those unsure about how much they spend on certain items. When factoring in one’s after-tax income, they suggested breaking down spending on essentials and non-essentials:

• 50% for needs — housing, food, utilities, car payments, health insurance, etc.

• 30% for wants — dining out, shopping, events, hobbies, travel, etc.

• 20% for savings and debt repayments — credit card payments, regular savings, emergency funds, retirement savings, etc.

Various apps such as Mint or Digit allow users to automatically track spending while supporting their financial goals. There’s also the old school option of jotting down daily or monthly expenses in a journal or notebook.