Do you need a kick in the pants to get your finances in order? There’s an easy solution – the Money Diet. It turns out the money diet concept has been around since at least the early 1980s and has several iterations. But it’s a pretty basic concept: Don’t buy anything you don’t need! I launched a two-week program and lived to tell about it.
Under the money diet, I could only purchase essential items. Most of my bills, such as utilities, insurance premiums, and fitness memberships are automated. So my money diet became the G&G diet (Gasoline and Groceries.) My first money diet was in 2012, when I needed to restore my discipline to prioritize my outlandish goal of paying off my mortgage in record time. Since then, I’ve occasionally thrown in a money diet when my credit card bills sneak up to higher than budgeted levels.
The Challenge of Social Activities
As a result of this week’s experiment, I have become super-conscious of my spending habits. I learned that a strict money diet is impossible to attain for any period of time, but it is an excellent tool to becoming a conscious spender (and saver). I will give the money diet one more week and report back.
I broke the money diet in my very first week. I spent $40 on restaurant meals and $50 on expenses associated with income development—a total of $90. Despite the breach, I’m calling it a success.
As a way to limit my grocery bill, I purchased enough Trader Joe’s gift cards to pay for groceries until the next credit card billing cycle. But as luck would have it, I had an unusually active week that resulted in some relaxation of the diet. Results were mixed:
While I did not adhere to the strict Gasoline & Groceries mantra, I am pleased with the relatively low amount spent on non-essentials ($40). I did not take any unnecessary shopping trips and avoided using the one-click option at Amazon. The week was not perfect, but both social events were worth breaking the strict budget demands.
A “Fun Bucket” is a Necessity
The two-week money diet made me aware of expenses that I incur for entertainment, social activities and gifts. The purchase of several gifts threw a wrench in my money diet, as did visiting with friends over lunch dates. Yet, I’m not willing to give up gift-giving, social events and entertainment on a permanent basis. The challenge of living within a strict budget is that the discipline can wear a person down. One begins to feel resentful and in a weak moment, the credit card eventually comes out for an extravagant purchase—just to feel better.
The “bucket” strategy works for me and I am now set on creating a “fun bucket.” I will put aside a small amount of money every month into my ING account. When a terrific Groupon offer on entertainment comes along, I’ll have the money available and be able to enjoy the activity guilt-free. When a friend invites me to lunch, I can gladly say “yes,” and know that the expense will be covered. I am looking forward to the “fun bucket.”
Was the Money Diet a Success?
By strict standards, I failed on the money diet. I spent money on restaurant lunches and gifts—I broke the diet. However, I consider the “money diet experience” to have been invaluable. It made me conscious of each spending decision and it revealed gaps in my current financial strategies. Here’s why I call the money diet a success:
I highly recommend the money diet. In addition to helping you cut expenses, the money diet requires you to become a conscious spender. It will help you prioritize your spending and you’ll likely discover new strategies that help you accomplish goals that align with your values. Give it a try!