Ever tried a detox diet? The medical benefits of “cleansing” your body of toxins might be dubious, but temporarily limiting your diet to liquids or fruits for a few days is still a good way to become more mindful of what you’re putting into your body.

A financial cleanse works the same way.

If a cleanse diet aims to cut out the bad stuff you consume—sugar, fat or alcohol, for example—in a financial cleanse you look to eliminate ‘toxic spending’. Such spending could be emotionally-charged, wasteful, or just mindless. Whatever the cause, the purpose of a financial cleanse is to reset how you make spending decisions so that you think more carefully about every one going forward.

If you’ve found yourself creeping into bad money habits like spending more than you make, not saving enough, or buying things you can’t afford, it might be time for a cleanse. Even if you’ve got it together financially, a cleanse can help you take your money habits to the next level.

How can I do a financial cleanse this month?

When you go on a juicing fast to cleanse your body, it’s painful for about the first week. Going through a financial cleanse will be no different. The first week or so is going to be rough.

To make it more manageable for you, I’ve given you the option of several different challenges to tackle this month. Don’t try to do all of them in a single month if you’re not comfortable. Like dieting, if you try to go too far too fast, you’ll end up failing and ultimately giving up.

The purpose of this is to set you up for sustainable success, not have you go for 30 days and stop. Just remember to keep at it—it’ll be worth it in the long run.

Challenge #1—Start a spending fast

Instead of starting off nice and slow, you’re going to do something to shock your financial system. You’re going to stop spending money on anything that isn’t a need.

A perfect example of this is when Anna Newell Jones did her Spending Fast. She determined exactly what was a need and what wasn’t, then stopped spending on everything that wasn’t.

Anna did this for a year. For now, I’m asking you to try it for a month.

Be aggressive with your decisions—don’t let yourself off the hook. For example, you might think something like clothes, bed linens, and haircuts are needs. But Anna Newell Jones was able to go without them for a long time, and so can you. 

Challenge #2—Stop using credit cards (even if you pay in full)

This one is going to be hard for those of you that buy everything on credit and pay it off in full each month. While normally that’s a great strategy, psychologically we spend more money when we use plastic versus when we pay with cash.

By ditching your credit cards for a month, you’ll force yourself to use cash (yes, that funky green paper you never see anymore) and start to physically see your money leave your hands as you buy things. 

One of the best things about cash is that it’s finite. Meaning, once it’s gone, it’s gone. Take a page out of Dave Ramsey’s envelope system method and budget all of your major categories into physical envelopes.

Things like your debt payments, rent, and utilities don’t have to be done with cash, but anything that you’ll actually be buying should. So groceries and gas will all be cash this month.

Challenge #3—Give every dollar a job (and track your spending)

Now this one is going to be grueling for most of you, but it’ll put your dedication to the test.

To make it easy for yourself, head over to YouNeedABudget.com and sign up for a free trial.

One of the things YNAB harps on is to give every dollar a job. Basically this means every dollar you earn gets allocated somewhere, so you know what you’re spending and where it’s going. It also helps you plan for the month and help you create a solid financial game plan.

Once you’ve signed up for an account, follow the YNAB Quick Start Tutorial to get your budget up and running. Since you’re using cash this month, it’ll be an extra challenge for you to track what you’re spending (they have a simple app to help you).

Challenge #4—Increase your savings rate by 5-10 percent (and automate it)

Recent data shows that the median savings for American families is $5,000. Read that again – $5,000. It gets even worse for families with members between 32 and 37—the median savings in those groups is less than $500.

The reality is, we’re not saving like we used to. We live above our means as the cost of living increases and wages don’t always follow the same pattern.

So the challenge I present to you is to increase your rate of (pre-tax) savings by five to ten percent.

The other piece of this challenge is to ensure your savings is automated – pay yourself first. We’ve said it thousands of times on Money Under 30, but that’s because it’s critical if you want to have any success saving money.

Paying yourself first means that you’re taking money out of your paycheck before you even see it and putting it into savings. The most common example is a 401(k) contribution, which gets taken out pre-tax before you’re paid.

But that doesn’t have to be the only way. You can set up a recurring deposit from your checking account to a savings or Betterment account. The point is—just increase your rate of savings immediately. With an increase as little as five percent, you may not even realize it’s gone.

Challenge #5—Get a grip on your debt

The average amount of credit card debt is nearly $17,000. As I said above, we’re also saving next to nothing. Combine that with this kind of debt, and we’re not exactly setting ourselves up for success.

And that number doesn’t even include things like car loans, mortgages, personal loans, and student debt. When you factor in all the other types of debt you have, it can easily become overwhelming. Which is why we often do nothing about it.

Well now is your chance to change. I’m not asking you to pay off all of your debt right away – you don’t have the money to do that yet. I’m just asking you to get a grip on your debt.

What do I mean by that? I mean getting a hold of what you owe, how much your monthly payments are, and what your interest rates are. As simple as it sounds, we often don’t take the time to do a check-in on our debt to create a plan.

Which is the next part of this goal. After you’ve taken some time to write down your balances, interest rates, and payments, write down the customer service number for every single account.

With the exception of your mortgage, you may be able to easily get a lower interest rate just by calling and talking to someone. Call the customer service numbers for each account and see if you can get a lower rate.

The worst thing that will happen is they’ll tell you no, and you’re in no different place than you are right now. So what do you have to lose?

You can use the traditional method of working toward the highest interest rate first, or try the Snowball Method that Dave Ramsey made so popular years ago.

With the Snowball Method, you’re paying off your smallest balances first – ignoring the interest rate. Mathematically, this makes no sense, but psychologically, it gives you quick wins (paying off an account).

That doesn’t mean stop paying your balances on your other debt, but set them up to automatically pay the minimum while you focus on putting every extra dollar you can toward one account at a time.

Are you someone who goes out all the time on weekends? Do you go to bars, restaurants, and movies with your friends? Much of these activities lead to everyone’s spending arch-nemesis —food.

In fact, American households are now spending over $7,000 a year on food alone. That’s nearly $600 a month! If you spent just ten percent less on food each year, that’d give you about $700 you could sock away into a savings account.

Not only are we spending way too much money on food, but we’re also wasting it. The average person wastes about 20 pounds of food per month. Think about that—20 pounds!

This is a completely unnecessary waste. And we’re all guilty. It’s impacting your wallet as well as our environment—up to 40 percent of landfills are now organic waste (food).


Doing a financial cleanse this month will help you reboot and recharge your financial life. 

Try a couple of these challenges and try to hang on to them indefinitely if you see progress. Also, get creative with these challenges.

How many types of sub-challenges can you come up with? For instance, if you try Challenge #5 (cutting back on food spending and waste), you could take this one step further and place a ban on all coffee or takeout purchases for the month.

Get creative, have fun, and most importantly—improve your financial habits forever.

Read more:

  • 6 Ways To Trick Yourself Into Saving More And Spending Less
  • How To Start Saving