The Drop It Like It’s Hot no spending challenge is a great way to cut out your unused subscriptions! In 2016, the average person in the U.S. wasted on average $500 on unused subscription services. In this, no spending challenging you’ll drop a few of those pesky subscriptions that are weighing you down.
What is the Drop It Like It’s Hot no spending challenge?
The Drop It Like It’s Hot no spending challenge is a 3-month challenge where each month you cut out at least one unused or unnecessary subscription service.
Examples of subscription services include streaming services like Netflix and Spotify, shopping memberships like Amazon Prime, and annual subscriptions like a yearly credit card fee.
The reason subscriptions in particular are so dangerous is how easy it is for those small purchases to get out of control. It may not seem like a lot, but most of the subscription services we forget about are under $25 per month. Due to compounding, those small amounts can have a lasting impact on your financial future.
There are a couple of ways we recommend going about cutting subscriptions.
- By reviewing your bank statements and credit card statements.
- Using a subscription canceling tool.
The first step to canceling underutilized subscriptions is by identifying them.
Review your credit card and checking account statements each month and cancel any unused recurring services. Don’t forget… these “subscriptions” can also appear in the form of monthly bank fees that are avoidable!
Who is this for?
Drop It Like It’s Hot is for anyone who is trying to get their finances under control and looking to put a little extra cash in their pocket. If you feel like your subscription spending has gotten out of control but don’t want to cut out everything at once, this no spending challenge is for you.
Ready to reduce your subscriptions? You can sign-up for Drop It Like It’s Hot on the Ostrich app.
When is the best time to start?
The best time to start dropping it like it’s hot is now. Start with one small act of cutting out the most obvious subscription you don’t use.
You’ll immediately feel better about your finances and if you accidentally cut out a subscription you truly need you can always resubscribe.
How to implement the Drop It Like It’s Hot no spending challenge
Step 1
Sign-up for Drop It Like It’s Hot on Ostrich. Why not put on the song while you’re at it?
Step 2
Examine your most recent credit card and bank statements for recurring subscription expenses.
Step 3
Select one recurring fee or subscription that you don’t use or isn’t worth the money and cancel that sucker.
Step 4
Check-in for this challenge monthly on Ostrich. Each month, for the next three months, dig up a new subscription to cancel!
Step 5
Record your progress on Ostrich by checking in for this challenge and keep track of what works for you!
Tips for spending less money
Here are some dollar-saving tips to help boost the impact of your Drop It Like It’s Hot no spending challenge!
Focus on your largest expenses
Two of the biggest subscriptions everyone has are housing and transportation.
Cutting out a few $25 subscriptions is great, but if you can find a way to lower your housing expenses or transportation expenses you’ll likely see a bigger impact on your bottom line.
Find a place with cheaper rent or consider refinancing your home mortgage into a lower monthly payment. If you have a car payment, perhaps you can trade in for a less expensive car or find a used one that fits your needs better.
Unsubscribe
Unsubscribe from marketing and promotional emails. If you have trouble resisting that 25% off sale that just hit your inbox, unsubscribe. By removing the temptation you’ll find yourself less likely to spend on unnecessary items.
One-click be gone
While Apple Pay, Google Pay, and Amazon’s one-click purchase buttons have made it easier to spend, it’s not great if you are trying to cut back.
Remove your saved credit card and debit card information from these services so it’s more difficult to impulse spend.
Track your spending
One of the simplest ways to get your spending under control is to track it.
Every day review your spending. That’s it.
The simple act of bringing awareness to your spending habits will make you a more conscientious buyer.
You can use a dashboarding app like Mint to link your cards in one place, review your statements manually, or write down every purchase in your phone or a notebook.
What to do with your extra cash
Pay down debt
Debt drains both your bank account and you, psychologically. Pay off high-interest rate credit card debt, payday loans, or other forms of revolving debt.
Join a debt paydown challenge and try implementing one of the snowball or avalanche debt reduction methods to stay motivated.
Build your emergency fund
It’s important to have at least a few months’ worth (6 months is considered healthy) of living expenses built up. This provides a cushion for your quality of life in case you lose your income.
If you feel like 6 months isn’t enough try building your savings to the level of your annual salary or until you feel comfortable.
Invest for the long-term
Another great use of your new savings is to invest. Research shows that investing for the long-term (10+ years) is the way to go when building wealth.
We recommend getting started with low-cost index funds vs. purchasing individual stocks and using the dollar cost average investing method.
Check out our favorite brokerage accounts and our favorite auto investing tools.
Make a small calculated bet
Investing for the long-term is proven to be the most sure-fire and safe way to build wealth, but it can be boring. Boring is good for your major goals. We like boring!
But if you have a little extra money after making your boring investments and you are okay with losing a small amount of money, explore alternative moonshot investments. This could be anything from investing in cryptocurrency, NFTs, startups, art, collectibles, or that penny stock.
The key is not to make this your main strategy. Never invest more than you can afford to lose not just financially, but also psychologically.
Benefits of the Drop It Like It’s Hot No Spending Challenge
There are many benefits from completing Drop It Like It’s Hot. Who doesn’t want to quit wasting money?
Will power (D.O.G.)
Research shows that people who are better at delaying gratification are better in control of their finances. If you have a hard time delaying gratification then try these delay of gratification exercises to improve your impulse control.
Building your saving muscle
Saving money isn’t always easy. It can be tough with the constant ads, one-click purchasing, and temptations to spend everywhere you look. By consistently saving week over week you’ll start to see that it is possible to save money without sacrificing your quality of life.
Feel good
Hitting your goals releases dopamine to your brain, giving you that feel-good high. You’ll legitimately feel accomplished for achieving your savings goal and your brain will want more. Ultimately the desire to feel that way again will motivate you to save more and take on larger financial goals.
Tools for Canceling Unwanted Subscriptions
Below are a some Ostrich’s favorite tools to help you conquer your Drop It Like It’s Hot no spending challenge and cancel underutilized subscriptions.
Subscription canceling tools
These tools and services help you identify all of your subscriptions and recommend ones to cancel based on your usage. Some will even do the dirty work for you!
Virtual credit cards
Virtual credit cards can nip unwanted subscriptions in the bud. These services provide a unique credit card number for every purchase. Virtual cards link to your main card but make it so that if your virtual card gets stolen or you forget to cancel a subscription you won’t be charged. That is because these virtual card numbers are single-use only.
High-yield savings account
Open up a separate high-yield savings account in order to earn the most interest on your newfound savings. Check out our recommendation for the best high-yield accounts today.
Related no spending challenges to Drop It Like It’s Hot include: Stop Shop and Roll, Category Blackout, Frugal Fall, Freeze My Spending, Stoppin’ Online Shoppin’, and Tit For Tat.
Conclusion
The Drop It Like It’s Hot no spending challenge is a simple subscription cutting challenge. Over the course of three months, you’ll cut out at least three underutilized subscriptions and put some extra cash in your pocket. To get started, sign up on Ostrich.
