Have you ever tried a ‘money diet’? Whether you call it a personal spending freeze, money diet, financial cleanse, saving challenge or skinny budget — going though your spending habits and keeping only the essentials for a defined period of time is one surefire way to jumpstart your debt payoff plan or savings goals.
What is a money diet?
Much like a nutritional diet where you change what you’re eating and take in less calories in order to lose weight, the idea is to switch up your spending habits and significantly reduce the outflow of money going to superfluous items, so that more of your money stays where it belongs — in your pocket.
Dozens of authors have written top-rated books on the idea of putting money on a diet with titles like ‘31 Days of Living Well and Spending Zero,’ ‘The Money Diet‘ and ‘The Skinny Budget Diet.’ But if you’re in a financial pinch, or you want to save more right now, what can you do immediately to slim down your spending and fatten up your wallet?
Read more: 2 ways to guarantee yourself a lifetime stream of income
One of the great things about deciding to do a money diet or financial cleanse is that there is a defined beginning and end to your plan. Say you want to do it for 21 days, 30 days, 60 days or 90 days — at some point, your financial diet will end and hopefully you will have picked up better financial habits along the way.
How to do a money diet
What you should and shouldn’t cut
There are categories in our budget that most people can cut for a short period of time, but then there are other budget categories that most people just cannot eliminate.
Essential monthly expenses you probably can’t cut:
- Essential transportation
Items considered non-essentials that you can cut:
- Going out to eat
Though some might argue that any of the above are necessities, if you’re really serious about saving some serious dough during your financial diet, you’ll find that other alternatives to these items that don’t cost anything might even be just as fun — as long as they get you closer to your goals!
8 steps to go on a money diet
If starting a money diet sounds like a great idea but you need some help figuring out how to start, just follow the steps below!
1. Write down a goal.
Just like you would when you want to lose weight, write down a goal of what you want to achieve in your finances.
A statement such as, ‘I want to lose 30 pounds by August 1, and I will work out three times a week and avoid junk food to get there,’ is a good goal for weight loss. So here’s an example of a good goal for a financial cleanse:
‘I want to save $1,000 by March 1, and I will cut out cable, eating out and pick up a part-time job to get there.’
The goal is specific, time sensitive, measurable and realistic.
Adding a reason to your goal is the extra push you’ll need to stick to your money diet, so it’s important to figure out why you’re doing it. A good reason might be, ‘I want to save $1,000 so that I can have peace of mind in case of an emergency.’
Next you need to take some other steps to meet your goal and keep your money diet going for the next three months.
2. Reduce cost on essential items.
Since there are things we just can’t cut, such as food, water, transportation, shelter and medicines, many people just assume they can’t really save a lot in these categories and continue paying whatever they’re currently spending on these expenses.
Baloney! There are definitely ways to cut down what you’re spending on essentials.
Here are some ways you can do it right now:
- 7 easy ways to cut your monthly bills
- 4 ways to save money on prescriptions
- 15 ways to cut your grocery spending in half
- How to start couponing step-by-step
- Aldi can cut your grocery bill by 33%
3. Cut non-essential items.
We all know there are items in our budgets that we don’t really need. Cutting non-essential items is a great way to cut the fat from our budgets.
- Cut the cable cord or reduce your cable bill: Are there channels/extra features you can get online for free? If you don’t want to eliminate cable completely, get your package down to the bare minimum — and then get everything else online or through devices like Roku or Apple TV.
- Boycott those lattes.
- Refrain from going out to the movies.
- Avoid going out to eat.
- Cut any subscription services you aren’t using.
*Remember: This spending diet is temporary. When you hit your specified end date, you may realize you didn’t even miss these little luxuries. And if cutting them out was nearly impossible, then once the diet is over, look for ways to save if you really can’t live without them (for example, if you canceled Netflix, can you share a subscription with someone in the future?).
Here are some good alternative activities that could replace paid entertainment, shopping or non-local travel.
- Go for a walk.
- Check out books at the library.
- Learn to change your car’s oil.
- De-clutter your home. (Here’s how.)
- Start a blog on an interesting topic.
- Discover any historical landmarks in your community.
- Meet any neighbors you haven’t met yet.
- Learn to play an instrument.
There are many other ideas, but you get the picture — replacing items that cost something with items that cost nothing and can improve your life is a great way to avoid missing the unnecessary items that cost money.
4. Increase your income.
According to DailyFinance.com, Lamar Dawson is an account executive in New York City who took on a part-time job to pay off student loans and credit card debt. He did odd jobs such as working as a Spider-Man in a toy store in Times Square, and also worked as a host for an Italian restaurant. It took him 12 months to knock out his debt, but he still works at the Italian restaurant.
Read more: 11 ways to make an extra $1,000 or more
‘I found that it helped me save money because I wasn’t at brunch with my friends, who were group texting me to come out for endless mimosas,’ he says.
If you are at the max for how much you can save, why not get a second job or pick up overtime at work? Getting a second job has an added benefit: You have less time to spend money!
But if you don’t want, or don’t have time, to pick up a true part-time job, there are plenty of other ways you can earn some extra cash — often right from home or from your smartphone:
- Apps that pay you to use your phone
- House sit or pet sit.
- Mystery shop.
- Do paid online surveys.
- Clean houses.
- Start a business on the side.
Read more: 5 ways to make an extra $5,000
5. Sell stuff.
This is a huge opportunity when you want to get to a financial goal quickly. Do you have anything around the house you don’t need? Why not sell it?! You might be surprised by what you can sell and how much cash you can make.
To help you sell some of your used (or new) items, check out these resources:
- Trade in your old electronics for cash
- The secret to making extra money with eBay
- 5 things you didn’t know you could sell on eBay
- Gold guide — How to sell your unwanted jewelry
- 7 ways to make more from garage sales
- Sell your unwanted gift cards online
6. Hang out with friends differently.
Since so much of our money has to do with our social lives, doing a money diet or cleanse for a short period of time — instead of a complete financial overhaul — can be a lot easier to explain to friends and family, and it will be easier to stick to since you know it has a defined end.
If a friend or family member asks you to do something that involves spending money, all you have to say is, ‘I can’t go right now, but I would love to after my financial cleanse!’ or, ‘Can we do ‘such and such’ instead?’ Friends and family are likely to be completely happy to help you on your quest to improve your finances — and subsequently — your life. â€‹There are other ways to hang out with people other than shopping, going out for coffee or going out to eat.
Instead of going out and spending money with friends, consider these ideas:
- Host a potluck party or game night where people bring a dish to share.
- Go for a walk/exercise with a friend.
- Volunteer at a great cause with a friend.
- Organize a book club.
- Organize a group game of basketball or soccer at a local park.
7. Ask for support.
Another essential ingredient for a successful plan not only includes the plan itself, but also people who can encourage you in your goals. But maybe you don’t know anyone who would be able to encourage you and help to hold you accountable. In that case, why not start or join a group?
If you’re on Facebook, one of the easiest things you can do is start or join a group with people who have the same goals as you. In a group, you can always tell someone when you’re struggling or tempted to buy something you don’t really need. People in the group or an accountability partner can help to encourage you when you need an extra boost!
Read more: 8 simple things you can do today that will make you richer
8. Revisit your goals
The last step is an essential step in your progress toward making it to the end of your money diet: revisiting your goals. What was the reason you started to save money in the first place? Thinking about your goals and asking yourself why it is important to you is vital to keeping yourself on the right track.
In addition, you might want to watch or read stories of people who reached their financial goals. This will help inspire you to reach yours.
Read more: 19 ways to save more money in 2016