Illustration by Spencer Olson

The ‘No-Spend Day’: How One Couple Saved $100,000 in Just Three Years

But is it a gimmick, or a legitimate personal finance strategy?

Seven years ago, Michael Airhart and his now-wife were living in South Korea, earning less than $40,000 a year each as teachers. Their dream was to save $100,000 so they could build and manage their own boutique hotel, so they enacted a savings strategy known as the “envelope system.”

At the start of each month, they set aside a certain amount of money for each of their various expenditures, and put that cash in respectively marked envelopes. For the rest of the month, whenever they spent on food, they only used cash from the “Food” envelope. They never spent more than was in the envelope (f0r the most part). If the envelope was empty, they’d eat leftovers or groceries they bought previously.

The couple used the method for all their expenditures (utilities, gas, insurance, Internet) and the effects were drastic. Their monthly spending decreased 60 percent — from $2,500 a month to $1,000 — allowing them to save as much as 85 percent of their income some months. It didn’t hurt that their employment package included a rent-free apartment, but it was an impressive lifestyle change nonetheless.

In doing the envelope method, the two discovered that much of their frivolous spending went toward small, seemingly innocuous purchases such as their daily latte, or buying a book instead of checking one out from the library. So they developed a personal finance strategy of their own: Twice a week, they resolved to spend no money at all. No going out for meals or to the movies. No buying a new video game or piece of clothing. No impulse Amazon purchases. Two days a week, they spent nothing.

In just three years, the “no-spend day” tack helped them saved enough to move to Mexico, and in 2013, they opened Gecko Rock, an all-inclusive, adults-only resort in Oaxaca. Now, the no-spend day concept has become one of the most popular and contested personal finance tips on the internet, earning praise from those who think it’s vital for re-evaluating their spending habits, and contempt from those who think it little more than a cheap gimmick.

The controversy

Four months ago, Airhart posted about the no-spend day method on /r/personalfinance, Reddit’s wildly popular forum for sharing personal finance advice. Airhart’s post quickly earned thousands of upvotes, becoming the 25th most popular post in the subreddit’s history.

Commenters detailed their own no-spend experiences, with many of them saying that going a day without spending helped them realize which purchases were essential, and which they only thought were essential.

“I distinctly remember the first time I went a full day without spending any money,” wrote one user. “I got home from work and realized I hadn’t bought lunch that day, I had just prepared dinner at home and hadn’t bought anything online. I actually hadn’t bought anything that day! I don’t know why, but that was life-changing for me. … Now I spend $0 most days and save a LOT more money than I used to.”

But critics dogged Airhart’s idea as incomprehensive. He wasn’t practicing sound money management, they said; he was merely delaying his spending by a day. “Honestly, [this] reminds me of those people that didn’t buy gas for a day to teach oil companies a lesson. So they filled up the next day instead,” read another response.

“I get what you’re saying about not making impulse purchases to keep your costs down, but it can lead to people fooling themselves into thinking they’re saving money when they aren’t,” another commenter said. “You can still impulse buy something on Monday for use on Tuesday, but then convince yourself you didn’t spend any money on Tuesday.”

The backlash was so fervent that Airhart ended up amending his original post to address the detractors. For one, a day without spending did create real savings, he wrote. “Face it, you’re not going to buy three extra pints at the pub to stick in your pocket and drink the next day.” Over time, the days of going without add up to significant savings.

No-spend days also require planning ahead and buying food in advance, which almost always amounts to more savings, Airhart said. “Clearly [making food and coffee at home also costs money], but it costs a fraction of what it does to buy this stuff out,” he wrote.

But the real value in the no-spend day is in the awareness and discipline it instills, Airhart and his supporters argued. “Just getting into the mindset that it’s possible to go a full day without spending a dollar starts the habit of watching how you spend every day. … You naturally start spending less on spending days, too.”

One British user recounted a story about how he used to spend £10 a day on coffee and lunch, thinking nothing of the daily or accumulated costs, until he discovered they were avoidable. “No spend days make you much more mindful about the value of money, and how much you can really live on, and [how much you] used to waste.”

The expert opinion

Personal finance strategies are often compared to weight loss tips. (After all, what’s a budget if not a diet for your spending?) Some are healthy and sustainable; other, just fads.

In that vein, the no-spend day might be like skipping meals for a day, only to binge-eat the next and negate any benefits. But it could also be like intermittent fasting, where relatively brief periods of not eating can result in lower caloric consumption and better overall health.

“Historically, fasting has been a part of many cultures as a way to get closer to God and the things that are important to us,” says Robert Weagley, chairman of the Personal Financial Planning Department at University of Missouri. “There’s a parallel here. If you spend a day or two not spending any money, you’re going to realize the things that are really important to you financially, and the things that are frivolous.”

People already employ similar strategies, Weagley adds, such as setting up an automatic monthly deposit into their savings accounts.

Airhart and his wife no longer practice the no-spend day: It would be virtually impossible to maintain a hotel without making business-related purchases each day. But he still stands by its benefits, and believes the average person is capable of cutting out many extraneous expenses such as cable, eating out (particularly at lunch) and coffee. “Anyone can easily save five times more than they are currently saving if they actually make it a priority,” he says.

As for critics of the no-spend method, “I respond by sending them a link to the fucking hotel I built with the money we saved.”