So people have no probably hopping on the latest diet trend if it promises major weight loss, right? Well, have you ever considered what a spending diet might do for you? Trimming the “fat” in your budget with the promise of major money!? Kind of an amazing concept right? Unfortunately, the idea of spending diets hasn’t really caught on just yet and that’s a shame because it can yield bigger and better (and longer lasting) results than a regular diet. Let’s chat a bit about what a spending diet is, the different kinds you can try and which one is right for you.
*This post contains affiliate links. I may earn a commission on recommendations at no cost to you.
What exactly is a spending diet?
Just like it’s important to cut bad food from your food diet, it’s important to cut wasteful spending from your financial diet.
Going on a spending diet doesn’t mean you just stop spending money. Instead, you take a look at your current spending habits and then find areas to trim the fat.
Yes, this requires just as much discipline and self-restraint as a regular diet, but I promise, it will pay off for you in the long run.
Not into dieting? You can always try Budget Hacking. This is a great way to free up cash every month and start saving for bigger purchases like travel.
Why do people go on spending diets?
There are so many reasons to try a spending diet.
- Saving for vacation
- Getting out of debt
- Building up your savings
- Finding money to invest with
- Paying for major repairs
- Purchasing an expensive item
- Paying for college
- Starting up a new business
Whatever possible reason you might have for wanting more money in your life, there’s a spending diet you can find that fits your needs.
The different kinds of diets
Just like there are different diet eliminating different types of foods, you can get kind of picky and choosy with your spending diet as well.
There are of course areas of your budget that you can’t “diet” from. Like your mortgage or monthly bills. So starting a spending diet means focusing on the areas of your budget that you can control. These are usually categories like:
- Out to eat expenses
- Gourmet coffee
- Fun money
- Credit card spending
- All of these areas combined
Chances are, if you take the time to do a spending analysis, you’ll find the areas of your budget where you are struggling with over-spending the most. This is a topic I cover more
For me, my biggest struggle was with clothing and shoes.
How to execute a spending diet
The key to a spending diet is cutting spending in areas of your budget that are wasteful and unnecessary.
You don’t need to hack away at your food budget if you have a family to feed and you’re already sticking to a reasonable budget. However, if you leave the store each visit having spent over $300, it might be worth considering ordering your groceries online with Shipt.
When online ordering is helpful
With online grocery ordering like this, you can choose exactly what you need, browse the sales and confirm your total before you purchase. It’s a lot easier than walking through the aisles of temptation. Grabbing food as quick as you can and not taking the time to add up your total until you’re at the register in a cold sweat.
Finding free things to do
If your spending diet involves not going out so much, a great idea would be to find free things to do in your area. Instead of a night out at an expensive restaurant, try a quiet picnic in the park.
All that is really required of you is a simple Google search of “free things near me.”
Nip your triggers in the bud
No matter where your spending struggle is, it’s so important that you find a way to completely cut out the temptation to over-spend.
That might mean:
- Cancel your Amazon Prime membership because the free shipping is just too tempting.
- You could cut up the credit cards that you swipe way too quickly.
- Don’t go to the mall…or Target
- Make coffee at home
- Ride your bike instead of driving short distances
- Cut cable and get a digital antenna instead
Give Budget Hacking a try
Really learning to manage and operate your finances is a total game changer. Ten years ago I had no idea that there were hidden expenses in my budget. I didn’t realize that I was over-spending on almost all areas of my life. The day I started budget hacking was a total financial game changer!
How much spending should you cut?
The amount of spending you eliminate from your budget is up to you and your own unique financial goals.
Are you trying to save for a $5,000 family vacation? When do you need that money by?
If your goal is to have $5,000 in 1 year, simply take 5,000 divided by 12 (months) and you’ll see that you need to be saving $416 per month.
Once you know this number, go through your budget and find the areas where you can be eliminating or cutting back so you can reach that $416 goal.
Bonus tips for cutting spending
There are other ways to cut back on your spending that you might not even be aware of. I have some ideas that go beyond regular spending and actually help you eliminate the cost of your monthly bills!
Digging in really deep is especially helpful when your goal is to pay off debt, save money or start investing.
These three areas are so much more important than spending your money on luxuries or wasteful things. Being debt-free and building wealth has long term benefits that far outweigh the alternative.
Tips for seriously cutting back your spending
- Tello – Get unlimited talk, text and 1 GB of data with these $10 per month phone plans.
- Ting – Ting is a great way to reduce your mobile expenses each month. You could easily reduce your phone bill by OVER half.
- Trim – This app takes a look at your spending habits and will text you different areas where you could be saving money! Within 20 minutes Trim found me a cheaper internet plan! Try it out!
Can you have a “cheat day”?
Going 12 months without spending any fun money, going out to eat or enjoying any form of paid entertainment (like the movies) can quickly make a person feel drained.
That’s why I believe it is so important to keep a smaller “fun money” budget.
The amount you set aside will depend on your family and your habits of course. But having this cushion can make sticking to your spending diet so much easier.
What does our fun money budget look like?
Personally, Tom and I budget $50 per month for date nights on average. There is a movie theater near us that has $24 date night Wednesdays. This includes 2 movie tickets, a bucket of popcorn and 2 drinks (wine and beer).
We love having a planned excuse to sneak away from our kiddos for the evening and still stick to a modest budget that allows us to keep building our savings.
Our fun budget also includes $100 per person to use on ourselves for “fun” spending each month. The crazy thing is, the more we have reduced our spending and gotten intentional about what we want in our lives…the less we actually want to spend our money.
How to avoid failure
No one wants to fail at any diet. But there are a few major things that can go wrong in dieting that lead people to failure.
Setting unrealistic expectations
If you are struggling to pay your bills, it might be unrealistic to expect to start setting aside $400 per month. Instead, start with $100. Or something you feel is more realistic. Once you’ve gotten good at that, slowly eliminate more.
You don’t allow yourself some fun
Like I said, I am a big believer in a “cheat day.” As long as you plan fun spending into your budget and stick to it.
Not being flexible
If you’ve tried your spending budget and after 2 weeks everything just feels “off” don’t just power on. Maybe you need to re-assess your diet and find little things that you can tweak to make everything work more effectively.
When should you end your diet?
It’s always important to set a goal before you start your spending diet.
How much do you want to save total?
What is your goal per month?
How much debt do you want to pay off?
You’ll know your diet has “ended” once you’ve reached your final goal. It’s as simple as that.
Then maybe, once you’ve reached your first goal, you can set a second one and just keep going.
The funny thing with spending diets is that without even trying, they can become a way of life that permanently betters you and your finances.