Raise your hand if you’ve heard the term ‘spending diet’ or ‘spending fast.’ If you’re not familiar with these terms, these are both used to describe a new popular trend: Putting your spending on a diet to trim the fat and free up extra spending.
A spending diet or fast is basically a temporary freeze on your non-essential spending. Just like when you give up desserts on a food diet, you’ll give up some expenses on a spending diet. Here’s the best part: spending diets are 100% customizable. They can last as long as you want them to and most people diet for up to a month. You can also target a specific type of spending, or do a flat ban on any non-essentials. For example, I could put myself on a one-month spending diet to eliminate spending on all non-essential groceries. This means I’d skip out on coffee at Starbucks, drinks at bars, restaurant meals, and convenience snacks.
So, why have people started using health-related terms to describe financial situations? If you take a step back, it becomes clear that there’s actually a lot that physical health and financial security have in common. For example, terms like ‘get lean,’ or ‘bulk up’ are used to describe changes you want to see in your body. Yet, in order to bulk up your savings and get your finances in shape, you also have to change your money habits. To illustrate this further, think about a food detox. What comes to mind first? Probably a juice cleanse where you drink whole veggies instead of eating fatty foods. But, what if you throw the word budget in front of the word detox? A budget detox might mean using only cash (ala veggies) instead of a credit card (ala fatty and sugary foods). In essence, you’ll be trimming your fatty purchases way down.
The long and short of it: Treating your money like your body is a great way to make healthy financial changes. To help you get going, here are three steps you can follow to start your own financial detox:
1) Create healthy routines and habits.
When you’re looking to develop your ab muscles, you start a core fitness routine or sign up for Pilates classes, right? Well, when looking to save more money, you can also implement changes that allow you to flex those saving muscles. For starters, practice saying no to outings you can’t truly afford. How do you know if you can afford something? Easy. Can you afford to pay this expense up front and right away? Or will it languish on your credit card statement for the next three months? If it’s the latter, you can’t afford it.
Here’s another way to save. If your friends invite you out for dinner, ask if they’d be willing to come to your place for a potluck instead. Share the details of your spending diet with your friends so that they understand where you’re coming from.
You can also schedule regular check-ins with your money. This way you understand how and where you’re spending your cash. Sitting down once a week to review your spending is a good way to understand your spending habits and your biggest expenses.
2) Track what goes into your spending.
Counting calories is a proven way of losing weight. If you know how many calories go into your body, you know how much you need to exercise off – or skip altogether – in order to watch the weight fall away. Tracking your spending, in turn, will help you trim fat from your budget. To get going, write down every purchase for a month. This will help you see where your money is going and will unlock the why behind your spending.
If you notice that you’re spending a lot of money dining out, you might realize that convenience is a priority for you. To keep the convenience and skip the spending, you can meal prep one night a week so you have food at your fingertips all week long. Building a better relationship with money means paying attention to your financial habits.
You can also use an app like Personal Capital, Mint or You Need a Budget to create budgets and track your spending. By observing where and how you spend your money, you can then start to cut back or figure out where you can trim the fat. Knowledge is power, both on and off the scale.
3) Reward yourself in new ways.
Say you’re trying to lower your cholesterol. If you celebrate with a Big Mac each time your cholesterol level drops, you’re not really changing your habits.
But, say your cholesterol drops and you then celebrate with a fruit salad instead of that fast-food burger. Now that’s what I call a diet detox treat. It’s healthy, tastes good and you’ve stayed within your healthy eating guidelines. If you want more than a fruit salad, you can go for the gusto: An all-natural peanut butter and banana smoothie. This reward gives you an energy boost and keeps you on track to lose even more weight.
The same thing goes for money. If you save $100 but celebrate by spending $150, you’re only setting yourself back $50 – moving you further away from your savings goals. Instead, find a new way to trigger the celebratory feeling without spending any money at all. For example, perhaps you can chase an endorphin rush by working out or reward yourself with binge watching a Netflix series. Whatever it is, just make sure it helps keep you stay on track to save, rather than derail your ultimate financial detox goal.
As you’ve learned, successful food and spending diets boil down to being mindful about your decisions. In fact, looking at your finances through the lens of getting healthy might just be the key to getting into the best financial shape of your life.