April 2017

Financial Fasting

The way we spend money is very similar to the way we eat food. If something looks appetizing, we consume.  Sometimes we can go overboard and indulge too much. That’s when the unhealthy aspect kicks in. As it pertains to food, you begin to gain additional weight – financially, the additional expenses that you’ve created for yourself begins to weigh heavily on you. When that happens, then it’s usually time to shed some pounds to get back on the right track.

Prepare yourself for change

The first thing to do when trying to saving money is the same as first thing you would do when trying losing weight - make a life plan that you can stick to. It’s a commitment, so you must be ready to make some sacrifices. If it were easy, everyone would be in shape and have money to burn.

Set goals

The next step on your financial diet journey is to figure out what makes sense for you. Weigh in, assess your spending habits and make a game plan. That includes short, medium, and long-term goals as well. Planning is usually very key to any success. Just as you have weight loss goals, determine what you want to achieve financially. Are you looking to purchase a car next year without financing? Record how much you need and the date you want it by. You can then work backwards to figure out how much money you need to save each month. If the amount seems a bit out of reach, you may find it necessary to revisit your goal. The fundamental principle here is simple: SAVE MORE, SPEND LESS.

Be mindful

Healthy spending means making purchases in moderation—refrain from over-indulging when you’re going out for happy hour after work, or when you enter a store and see 50% off on all items. While you should take advantage of the sale, be mindful enough to buy only things you need and avoid buying just because things are on sale. Have spending limits and stick to them.

Don’t give in to the craving

Sometimes we spend on a quick impulse because we are bored, just as we snack when we have nothing to do. This is a quick and easy way to quickly spend hundreds of dollars when you add it all up. Keep yourself distracted with an activity so that when boredom hits, you will be less likely to satisfy your hunger at the expense of your pockets.

Work it out

Being active makes weight loss much easier. Those who are active are more likely to shed a few more pounds. The same holds true with your finances. Be active with your bank account. Prioritize your spending. What are some things that enjoy and don’t mind spending your money on? Is it traveling? Perhaps you enjoy trying new activities? You can work those priorities into your budget and cut back in areas that are of less importance.

Treat yourself on occasions

When you’re on a strict diet, there will be special occasions that allow you to step outside of your nutritional plan. Celebrations for achievements, anniversaries, or reaching milestones are good examples. These are the times that you want to receive more than just a “well done”. More than likely, you’ll want engage in the festivities and treat yourself.  With money, there’s no difference. The aim is to not totally deprive yourself of enjoyment, but rather to avoid making frivolous purchases on a whim. There’s room to indulge a bit, just make sure you make up for it another time.

Count those financial calories

If you want to lose weight, it is suggested you count your calories. The same concept applies to finances. Make a record of every dime you spend, perhaps with a check register or an online money management program. Make sure to include your recurring monthly expenses. Documenting what comes out of your pockets and bank account will not only make you more aware of what you spend, but will also paint a clearer picture of where you can save.

The downside of overspending as a habit is you get less of the things you need because you're buying for the sake of buying. Think of saving extra money at the end of the month as leftovers that could be spent on home down payments, savings, vacations or a budgeting shopping spree. If you do this, you'll lose 10 pounds of excessiveness in no time.