What is a financial diet and how it helps you take control of spending

2024 Author: Malcolm Clapton | [email protected]. Last modified: 2023-12-17 03:44

In The 21-Day Financial Fast: Your Path to Financial Peace and Freedom, Washington Post financial advisor and columnist Michelle Singletary suggests trying the “financial fast diet,” a method to break bad financial habits, get rid of credit, and help plan your budget correctly.

During financial starvation, you can spend money on what you need to live: shelter, food, necessary things. But only for that, otherwise you have to make do with what you have. You are on a short term financial diet. However, in the end, it helps to get rid of bad habits for a long time or at least not spend money for some time.

Is a financial diet right for you? Several rules

Financial starvation is a serious ordeal. And before you start it, understand some important rules.

• Fast for 21 days. Three weeks is a reasonable period during which you can focus only on needs and not give in to desires. In less time, you will not have time to form habits, and by fasting for longer, you will expose your determination and willpower to unreasonable tests.
• Buy only what you need. During the diet, do not buy anything that is not required for survival. Exclude going to the hairdresser, cinema, gathering in bars and cafes, gifts for birthdays and other holidays, shopping for clothes. You can only spend money on food, housing, medicine, and basic necessities.
• Pay with cash. You are more clearly aware of the amount of money spent when you pay in cash. This is a visual reminder of the decisions you have made. When, after going to the store, a few bills remain in your wallet, you are glad that you were able to save money.
• Keep a log of expenses. During the diet, carefully write down where you spent money, what you could save on and what unnecessary you most often wanted to spend money on. You will come back to this magazine later to analyze it and understand what you spend most of your money on impulsively.

Financial starvation is not for everyone. You have to independently understand the pros and cons of austerity within 21 days to see if this is the right method for you.

Benefits of a financial diet

1. You will become more conscious. A cup of coffee on the way to work, ordering food to the office at lunchtime, a can of soda on the way home from work - a few hundred rubles that you spent unnoticed for yourself. Financial starvation will train you to keep track of what you spend your money on.
2. This is the beginning of a long journey. By limiting yourself on spending for 21 days, you will save a small amount that will motivate you to save further. You will understand that you can painlessly save a couple of hundred a day, which can be set aside to pay off current loans or just like that.
3. You will learn to use less credit cards. "No money - no problem, we'll take it off the credit card." How often do we reason this way. The financial diet will save you from spending on your credit card for at least three weeks, and after its completion, you will most likely become more restrained in spending borrowed funds.
4. The diet will teach you to avoid temptation. When you are struggling with excess weight, there should be no sweets and greasy foods in the house so that they do not tempt you. The same is with the financial diet: do not test your willpower, do not go to stores or on. When the fast is over, continue avoiding unnecessary temptations.

Disadvantages of a financial diet

1. It backfires. As in the fight against excess weight, after three weeks of fasting, you can gain even more weight, that is, go shopping and spend the money you save. 21 day. During this very period, your bad habits break. Or do not break … Do not continue to deny yourself everything, but avoid unnecessary spending.
2. A financial diet won't magically solve all of your problems. If you're in deep debt, paying your mortgage, or having other serious financial problems, don't expect to get rid of them magically. A 21-day hunger strike will help you rethink your attitude to money and spending, will help you plan your budget in a new way, but you still have a long and hard struggle for financial freedom.
3. Financial starvation is a short-term measure. In his book, Singletari advises against "fasting" for more than 21 days. This is enough to save you some money and to identify those items of expenditure that you are unknowingly spending a lot of money on. This is a reboot, time for you to rethink and change your financial habits.

5 Secrets To Success Of A Financial Diet

Distinguish between needs and desires

How many people, so many options for such a division. While some consider going to the salon for a haircut to be a wish, for others it is a must in order to look perfect in a business meeting, for example.

Make your list. Straight on paper so you can reread it. Having a list in front of your eyes will help you avoid temptation. If you have decided for yourself that dining in a cafe is a wish, not a necessity, it will be easier for you to reject friends' suggestions.

Share your experiment

Not everyone around you will understand the meaning of your financial hunger. Some friends or loved ones may laugh or be puzzled. But you need a support group, one or more people to share with you about successes and failures. They may even want to accept the challenge and also "starve".

If you can't find a support group, keep a diary. And honestly write everything into it, do not be fooled.

Avoid Temptation

Are you a fan of online shopping? where you most often buy things. Try not to go into new ones. Sit around your computer less.

Do not look at the windows of offline stores and do not go to large shopping centers. If you suddenly feel sad, remember that this restriction is not for life, but only for 21 days.

Think differently

Financial starvation will force you to dismantle the closet. You will find many things that you have long forgotten about, learn to combine them in a new way. You will come up with cost-effective solutions.

Are you in the habit of chewing on something in the middle of the day in the office? Instead of running to the machine and shopping for twice the price, bring snacks from home. Replace sitting in a cafe with walks or long-forgotten hobbies. Come up with non-standard options for entertainment and use of familiar things.

Celebrate Success

Mark the end of the challenge. There is no need to arrange a carnage for the entire saved amount. Make yourself a modest gift, and put the rest of the money into a savings account or pay off debts. A true holiday is to immediately take advantage of the results of your labors.

A financial diet seems extreme, but sticking to it isn't that hard. Armed with our advice and preparatory work, you can deny yourself shopping for three weeks and see encouraging results at the end of the fast. This method is not a miracle cure for the habit of spending money uncontrollably, but it is a step towards understanding financial responsibility.