Just like a food diet sees us restrict excessive intake of food (R.I.P cupcakes), a money diet sees us restrict our excessive spending on unnecessary things.
And as with your budget, a money diet means we have to take stock of our necessary and unnecessary expenses. You need to pay for rent and electricity, not so much cocktails with the girls and expensive new stilettos.
Who needs a money diet?
Anyone whose monthly expense are more than their income. And anyone who wants to reset savings goals, increase how much they’re putting away each month or focus on paying off debt.
- Imagine your goal. Be as clear as possible about what you want and how you want to do it. E.g. ‘I want to pay off my credit card in September, I will not go out and I will save a portion of my salary every month.’ In order to work, just as a regular diet, it needs to be clear, realistic, time-sensitive and measurable. It’s important to have a clear time in mind. This means you can’t take short cuts and even if you feel deprived, you know end is in sight.
- Isolate the costs you’re going to cut out. Decide what you’re going to be dieting from – perhaps it’s meals out or drinks, or perhaps it’s takeaway coffees and bought lunches. Just like a food diet, tally up how much this should you save you (this time in ZAR not kilojoules!), and then cut these from your monthly spending.
- Consider your financial fitness in line with your diet. Do you need to find alternative income sources or start a side-hustle to supplement your money diet? Perhaps it’s time to ask for a raise or look for a higher paying job?
- Ask for support if you need it. An accountability partner or a friend doing the money diet as well can be a huge help when you’re struggling or feeling resentful.
- Revisit your goals if you’re struggling. This is the best way to stay motivated until you achieve what you wanted. In tough moments when all you want is a treat-yo-self day, just remember how far you’ve come and how amazing that goal will be when you reach it.
If you’re struggling with your goals or with the way you have prioritised your expenditure, seeking the help of a professional financial planner may be the difference between finishing the money diet or not.
According to Barbara Mundell from the Financial Planning Institute: ‘We always recommend you get assistance from a financial planning professional, because they have the necessary skills and experience to take what you’ve got and put that into what you want to achieve.’