How to get your desired financial figure through a financial diet
Financial dieting is so much similar to the so-called dieting… isn’t it? Financial dieting is as difficult as eating healthy.
Well, not always.
Just you have to get into the mode of it. Let’s check out how to do financial dieting.
Do not look for a short cut
It is not healthy to lose weight and trim your waistline quickly. It’s rightly said, slow and steady wins the race.
Similarly don’t expect to mend your finances overnight. It will take some time. Following sudden money-saving strategies can give you some results in the short-term but won’t benefit you in the long run. So, it’s better to give yourself some time and let the financial diet work.
Accept the reality since it’s the base
When you visit a dietician or a gym, the specialist first takes down your details and you get the true picture of where you stand.
So, accept the reality and analyze your finances. Just as you keep a record of the food you’re having, similarly take into account of your earnings, expenses, and the debts you need to pay off.
To do so, gather your bank and credit card statements, utility bills, mortgage documents, insurance documents, and so on. It will help you analyze where you stand financially; that will help you to make a good financial plan for your future.
Plan your diet carefully as it’s the initial step
Can you strictly follow a diet from the first day? No, right? Trial and error help you formulate a healthy diet that you can follow and which yields results.
Same with a budget. You probably won’t be able to plan a realistic budget in the first month itself. It will take a few months to formulate a realistic one which you’ll be able to follow with less effort. Also, by following which you’ll be able to save a significant amount.
However, you’ll have to take the first step since this is the base of your personal financial planning. So, sit with a pen and paper or open a spreadsheet and start planning your budget. List your expenses as per categories and check out how much you’re able to save in a month. Make sure you take into account your necessary as well as discretionary expenses.
So, after planning, calculate… Are you happy with the result? No? Then, you’ll have to plan your personal budget again. You can follow the 50-20-30 budgeting technique to plan a realistic budget.
However, while planning a budget make sure you set realistic targets to achieve; that’s why I always stress on planning a realistic budget which you can follow somewhat effortlessly. You can’t lose 10-pound weight in a week. Likewise, you might not be able to save $2,000 (suppose your targeted monthly savings) in a month in the first go.
Cut back on unhealthy things and opt for healthy eating
What do you do when you start dieting, or rather, what I prefer to say, healthy eating? You cut back on portions, reduce so-called unhealthy food and fill your stomach with healthy alternatives. However, you have to make your food tasty too.
So, when you’re budgeting, you have to look for where you can cut your spending. Distinguish between needs and wants - it is the secret strategy to reduce spending, especially when you’re trying to repay debt problems. Find out the hidden expenses which you’re overlooking. It can be a magazine subscription, a club membership, etc. that you rarely use or which is not that necessary.
Sometimes we don’t pay heed since it’s a meager amount. But, adding these expenses might turn out to be a significant figure in your budget.
Check your progress every week
When you’re into dieting, you have to constantly check your progress whether or not you’re losing weight, decreasing inches from your waistline, meeting your fitness target, and so on.
So, how will you know whether or not your financial diet is working if you don’t track your progress?
You need to know where your hard-earned money is going. You can use a spending tracker app to check your progress. You can browse to find such an app online.
I would suggest you do a weekly review to understand whether or not you’re spending more. Then, at the end of the month, analyze how far you’ve been successful.
And, don’t stop even when you’ve found the perfect personal budget plan. Monitor it at least once every 3 months and make modifications if required., Your budget can’t be a one-time affair. It has to suit your changing needs and requirements. Then only you’ll be able to manage your personal finance well and work towards a better financial future.
Attack your debts head-on
Only healthy eating doesn’t help you to achieve your target fitness; you have to exercise a bit, especially when you’re trying to shed weight.
Therefore, when your target is to repay debt, you’ll have to formulate a suitable debt relief strategy too. You can choose a suitable one from the available options as per your financial condition.
Again I would like to mention that you don’t expect to get results overnight. You’ll have to maintain patience to get results.
Check out: How to stop being embarrassed and tackle your debt shame
Gift yourself an ice cream
By this, I mean in the literal sense, have an ice-cream of your choice. The dieticians also recommend this strategy, once in a while, to keep you motivated.
Yes, so even if you’re into healthy eating along with pursuing a financial diet, have an ice-cream. It will help you stay motivated.
Celebrate your success when you reach a short-term goal. And, definitely, a long-term goal deserves celebration. But don't splurge much.
A secret tip: Include that celebration cost into your budget. But, don’t use it until you attain your target!
I would like to conclude this article by saying that why don’t you start eating healthy and go on a financial diet at the same time? Yes, by doing so, you can benefit your health and mind together.
A healthy mind resides in a healthy body. When your mind is healthy, you’ll be able to plan your financial future in a better way. And, you’ll be stress-free when you’ll be able to repay your debts and boost your bank account.
So, embrace diet and have a superb lifestyle!!
What do you say?