Financial Diets Will Destroy Your Soul and Your Wallet

I distinctly remember the first time I went on a food diet. Not wanting to be too ambitious, I decided to start by cutting out all carbohydrates. For the best of my life. No more pasta, bread, chips, muffins or potatoes. The first day of my self-imposed ban, I felt like I was on top of the world. Sustaining myself with vegetables and meat, I pitied the people still eating bread. As I crunched on celery, I calmed myself with the fictional notion that I was better, stronger and more capable than the weaklings who consumed carbohydrates.

Five days later, I consumed an entire batch of pancakes drizzled with syrup and loaded with butter in less than three minutes.

Although humorous, the story of my first diet illustrates two soul-sucking activities: dieting and binging. It took me over five years to understand that no diet would ever be successful or help me create a fulfilling life. Restricting my food by following arbitrary rules or religiously following a set of predetermined workouts was pointless because life is complicated and food is emotional.

As soon as I stopped dieting and restricting, I lost 10 pounds in a month and never gained it back. I stopped the crazy-making cycle of dieting and binging and my body thanked me. I became happier and healthier because I started to listen to my body and trust it. The same is true for money.

The Money Diet Myth

No budget or complicated financial diet will solve your financial stress. Unless you are living in poverty and resources are truly scarce, the stress is emotional and no amount of “number crunching” will fix it.

For the majority of humans, food isn’t simply about nourishing our bodies, it’s about comfort, fear, memories, and happiness. It brings friends together and provides joy when it’s delicious. At it’s core it’s about nourishment and survival, but humans are complex and in the same way sex isn’t merely about reproduction, food isn’t merely about survival and neither is money.

From infancy, we are made to understand that money is power. As children, our parents wielded the power of the dollar. They had the power to say “yes” or “no” to us and the reason was simple: they had the cash.

For some children, the awareness of money’s power was subconscious. For others, it quickly became a driving force and obsession. Either way, money became an important centerpiece of existence.

Parents yell at their children about it, couples divorce over it and people kill themselves because of it. There are very few things in the world that can provoke such powerful emotions, yet we still attempt to treat it like a mathematical equation that can be solved.

Although it’s true that 3,500 calories are equivalent to a pound of fat and four quarters make a dollar, the math is pointless after a certain point because it’s not about numbers.

It’s about the way money makes you feel. Whether you’re scared by it, obsessed with it or believe you’ll never have enough, it’s emotions that drive our finances. Because of that, you should never go a financial diet.

What is a Financial Diet?

A financial diet is any sort of intense budget or tracking. It’s pledging to “never buy lattes again” or to “only eat beans and rice for an entire month.” There is nothing intrinsically wrong with the act itself; instead, it’s the restrictive pledge that motivates it. The minute you pledge to “never” buy something again is the minute the binge and purge cycle begins.

Suddenly, lattes will become the only thing you can think about. Your days will spent distracting yourself from the thought of them and your nights will be spent dreaming of their tauntingly warm taste. Think I’m exaggerating? The same thing happens with food.

Ultimately, quick fix financial diets result in a binge. At a certain point, your new obsession with lattes will become too much to handle and you will break. As you take your first sip, you’ll feel giddy and almost high. After you’ve bought three lattes in one day, the crushing guilt will set in. You’ll feel like a failure but tell yourself, “I already failed. None of it matters anymore.”

After buying a latte everyday for a month or two, the cycle of dieting will begin again as you promise to once again cut out lattes for good.

The True Cost of Dieting

Financial diets ensure that you world shrinks. Instead of looking at the big picture of finances, you become obsessed with a single (fairly insignificant) thing. In this case, it’s lattes. But even beyond the psychological damage, your bank account will be lower than it would have been because you probably didn’t even want a latte every single day. Chances are you only truly desired it one twice a week but the restriction skewed your perception.

For me, the cycle of financial dieting and binging was at it’s worst when I was in college. I was responsible for every expense and I became obsessed. In some ways, my obsession was necessary in order to survive, but that didn’t make it healthy. I put myself on a strict budget: $100 of “spending” money a month. That meant every expense that wasn’t food or bills came from the $100.

There was one month in particular where I became obsessed with an arbitrary purchase: flowers from Trader Joe’s. It was all I could think about and I felt deprived and depressed. For some reason, I started to believe that the flowers would be able to make everything better. They would make my apartment nicer and help me study better. Their very presence in my life would increase my happiness ten-fold. All of these thoughts are absurd, but the self-imposed restriction and corresponding obsession made them feel true.

Finally, I cracked. My partner and I were at a farmer’s market one weekend and I bought flowers. But I didn’t stop there. I purchased handmade soap, Indian curry, chips, fresh guacamole and countless other trinkets I didn’t need. My monthly $100 was spent in less than 20 minutes. The worst part? I didn’t even want most of it. I simply wanted a nice $5 bouquet of sunflowers for my apartment, but the viciousness of my money diet had caused me to momentarily lose my sanity.

Finances are about moderation and self-punishing budgets or restrictions will never create happiness. Diets (of any kind) ensure that you end up obsessed, unhappy and poorer than when you started.

Life is more than counting pennies and imposing bans. It’s about getting to the root of your money issues and creating a life of self-informed balance. Unsure of how to start? Start with these:

1. Buy What You Want

Don’t blow $1000 on a jacket, but if you’re truly craving a latte, buy the damn latte! Life is too short to never drink a latte again. If you catch yourself on autopilot and buying a latte every single day, make time to sit with yourself and discover if it’s truly increasing your joy.

2. Track Your Emotions Instead of Expenses

Each time you buy an item, big or small, track how you feel. Rate your overall happiness on a scale of 1 to 10 before the purchase and after. You’ll probably start to notice a pattern. Adjust your purchases accordingly.

3. Cut Yourself Some Slack

Chances are that you are trying your best. We’re all human and sometimes life is complicated. Stay smart, but also don’t beat yourself into submission. It’s not worth it.

 

What do you think of financial diets? Are they ever successful?

24 thoughts on “Financial Diets Will Destroy Your Soul and Your Wallet

  1. Alyssa says:

    I think you make a valid point but I also think this largely weighs on a persons’ abilities to control their emotional spend. I can eliminate certain things from my spending habits by just pushing through for 30 days. I find after the 30 day mark you start to forget you even wanted it in the first place.

    I told myself I wouldn’t buy Tim Horton’s (hi, Canadian here) in the mornings anymore and it’s worked, but I also told myself no more iTunes, and it didn’t. So it all depends on how emotionally tied you are to that particular product or item.

    100% agree with you saying “cut yourself some slack” though. We get way too hard on ourselves and it becomes overwhelming if you’re not careful. Finances can be a huge ball buster haha.

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    1. Taylor says:

      Congratulations on being successful with Tim Horton’s! (That’s a coffee place, right? #American haha) I love the idea of thinking of it in terms of emotional attachments/ties. And I think that discovery process sometimes requires a few “failures” before we understand what truly matters to us or what we don’t want to live without. I think that as long as people aren’t beating themselves up from the “failures” and instead use them as a learning process, then it’s super helpful. Unfortunately, I think most people carry a lot of guilt and shame about money and that’s never beneficial in my opinion. Yay for cutting ourselves some slack though. I think that’s the more important than anything else 🙂

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  2. Maggie @ Northern Expenditure says:

    A) I Have NEVER been crazy enough to go on a food diet. That’s just not my jam. Life is too short to worry about all that. – Eat healthy, indulge occasionally – life is good. There was one time when I was pregnant that I read if you ate peanut butter while pregnant, the baby would be allergic to peanut butter (NOT TRUE, BY THE WAY). So, I decided I needed to stop eating it for the sake of the baby. I lasted about five hours when my husband came home to me, depressed on the couch. “I can’t think of a SINGLE THING that doesn’t have peanut butter in it!” Yes, I’m overdramatic… but that’s exactly what I said.

    B) I like this perspective on financial diets. For some people, it’s just the wakeup call they need to get things in shape. But for the majority of us, we just go crazy when we set those limits on ourselves. The “allowance” or “spending money” features has worked well for us when we need a wake-up call. (sorry it didn’t work for you!) It gave us new parameters. All of a sudden, I had guilt-free money to spend every month. Or I could save up every month and buy a larger guilt-free something. It helped me re-evaluate the worth of stuff. Because, as you said, if I spent it all on crap that I felt guilty about anyway… I felt guilty about it because it was crap and not because I spent the money allotted.

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    1. Taylor says:

      Hahah, your story about peanut butter is hilarious and basically sums up all my thoughts about food diets 😉 So glad to hear that’s not true cause I’m almost positive that I couldn’t give it up either, haha. Also, SO glad that you’ve never experienced the insane (and miserable) roller coaster of dieting. Not worth it.

      I love that the guilt-free money has worked for you. I think that concept aligns perfectly with the concept of no “dieting” because you’re not putting any restrictions on yourself. Instead, you give yourself permission to discover the things that make you happy (and the things that don’t!) I think that in the future, when my partner and I combine finances, we’ll probably use that approach so we don’t drive each other crazy 😉 haha. Speaking of, I saw that you cover that topic on your blog today! Can’t wait to check it out 🙂

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      1. Maggie @ Northern Expenditure says:

        Yes, allowance in marital finances can be very helpful. Since everyone has the thing that’s worth it to them (*cough* imported trader joe’s brownies *cough*) but not worth it to the other (the hubs, obviously). Saves a lot of stress. 🙂

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  3. Sofia @ Currentlylovingsimplicity says:

    While I agree with everything you said about food diets, I think financial diets can be helpful, for example when trying to pay off debt. Then, the financial diet has a clear end point and contributes to reducing the stress of being in debt faster.
    I’m also not sure if they are generally as bad as food diets, but that may be different for everyone. I just don’t remember any spending binges in my life, whereas I certainly remember many food binges.

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    1. Taylor says:

      Hi Sofia, thanks for the comments and thoughts! 🙂 I’ve definitely had more food binges in my life as well. But with financial diets, I’ve experienced intense underlying emotions of sadness, stress and fear. It wasn’t until I realized that I was on a self-imposed diet and stopped the extreme monitoring that the emotions disappeared. I think that ultimately, financial “diets” are different than financial goals. And I agree with you, short-term goals are great, but ideally, the goals (like becoming debt free) and corresponding financial changes are sustainable and the habits continue long after the goal has been reached. That’s one of there reasons I think it’s important to focus on a combination of savings and increased earnings 🙂

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  4. Tawcan says:

    You need to be happy about what you have and what you are doing right now. Financial diets do not work. You can have your “no spending days” but once you’re done, you probably will go out and spend money on things that you wanted to buy. Setting goals are more important IMO.

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    1. Taylor says:

      YES! I couldn’t agree more. Goals are the key to success and “no spend days” are merely temporary solutions that don’t address the underlying issues. I couldn’t have said it better myself 😉

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  5. Kalie @ Pretend to Be Poor says:

    I agree that extreme financial pledges or bans are not the most motivating way to change your financial situation. Moderation will get you further over the long run than gimmicks, but they can be a good way to re-set your habits as long as they give room for grace.

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    1. Taylor says:

      Hi Kalie 🙂 YES x 1000000. You totally nailed it. As long as there is room for grace or “mistakes” then they can be a great way to try and get a handle on finances. Very well said!

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  6. Alyssa @ GenerationYRA says:

    You make some great points here, Taylor! I always thought of budgets as being way too restricting – and like to refer to them as more of a “framework.” A framework that can me adjusted & modified from month to month, depending on where I am at in life. If I end up overspending in one category, how can I challenge myself to spend less in another category to compensate for that? It’s all about the ebbs & flows. As far as restriction goes – I know that some people do very well with shopping bans, no-spend months, etc. The challenge is the follow through, to kick in the good habits afterwards. Sometimes it takes that restriction at the beginning in order to incorporate better habits for the months to follow. I do think your 3 points are incredibly important to follow through with! 🙂

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    1. Taylor says:

      Hi Alyssa! I love the concept of thinking of it as a framework and that’s exactly how I treat it too 🙂 It’s actually the perfect word for it. I may have to steal it 😉 Yes, I totally agree that some people do super well with shopping bans and seem to approach it from a place of empowerment and consciousness versus deprivation (Cait for Blonde on a Budget is an excellent example of that!)

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  7. Sarah Noelle @ The Yachtless says:

    Taylor, this is so so smart. As a former crash dieter, I’ve actually been thinking a lot over the past few months about the similarities between money and food — because honestly, limiting spending DOES feel a lot like limiting food. The psychology and emotions are really very similar. Your story about banning carbs and then bingeing on carbs totally resonates with me, and I agree that the same thing can potentially happen if we try to ban ourselves from spending money. (At least frugality doesn’t make you hangry, haha.)

    I am also really interested by the fact that people do seem to find ways around feeling deprived — like for example the Frugalwoods are super low spenders but don’t seem to run into this problem…but then again, they do pay money for things that really matter to them, so maybe that’s the answer. As you say, it’s probably all about balance. 🙂

    Thanks for the great post!

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    1. Taylor says:

      Hi Sarah 🙂 Yeah, I find it super interesting as well. Especially because of my own background with food and diets (which sounds fairly similar to yours! I’m sorry you’ve also experienced the headache and psychological toll of crash dieting by the way 😦 It’s truly the worst!) Even though frugality doesn’t make me hangry, it actually does make me ANGRY, haha. If I start to feel deprived, even just in my head, I get super upset and angry. Not a pretty (or fun!) sight, haha.

      You make a great point about the Frugalwoods and the same is true with Cait from Blonde on a Budget. I actually spoke with Cait about this via email because I consider her the mindfulness queen, so I was really interested in her opinion. Her response was super interesting and insightful! I think that ultimately, it’s about the WHY and whether or not you’re approaching it from a place of empowerment. Also, I’m sure that personality type has a lot to do with it as well. By nature, I gravitate towards extremes and I don’t think I could ever survive a shopping ban or strict diet. However, I know that a lot of people are more even keel than me and find success with them 🙂

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  8. Our Next Life says:

    Truth, sista! I can relate to both of these — the food diet and the financial diet. With food, the book Intuitive Eating sums it up well: when we feel deprived (literally starved), there is something both biological and emotional that makes us obsessed with eating. In fact, the biggest predictor of being overweight is having dieted repeatedly. Can you say “irony”? On the financial side, I was so good at being frugal for years while I paid off my debt, and I literally spent nothing during the time. The result? As soon as the debt was gone, I started spending (binging) like it was going out of style! Thank goodness I didn’t go back into debt, but I have since learned the value of moderation, and never saying never.

    Hope you have a great weekend!!

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    1. Taylor says:

      Hi Our Next Life 🙂 I’ve never heard of that book, but I’ll be sure to check it out! I love your two key philosophies: moderation and never saying never. I agree whole-heartedly—as soon as we give ourselves permission to do something, the desire that once felt all-consuming can often disappear. So interesting to think about! I’m glad you’ve found your middle ground 🙂 It’s the best place to be.

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  9. Jim Wang says:

    Big wholesale changes rarely stick, it’s far better to try small adjustments. It avoids this starve/binge cycle too. So rather than restrict all carbs, why not just skip them for dinner? Or skip them on Mondays? Then add to it as the habit sticks… I’ve found this works better for me.

    Financial diets are exactly the same, which is why I think ideas like “zero spend days” are popular and relatively effective (even though they probably just shift spending). Rather than have this financial diet hanging over your head, you just restrict it to one day.

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    1. Taylor says:

      Interesting! I’ve actually never thought of doing that. If you couldn’t tell from the post, I’m a fairly “extreme” person my nature, haha. I love this idea though. Thank you for sharing!

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  10. John says:

    Great points, Taylor.

    I’ve found that – if done correctly – a spending plan is liberating, not restrictive. For a natural saver like me, a financial plan wasn’t a negative-feeling “diet”, but assured me that all of our expenses were covered so I could spend in other areas without fear.

    If a budget is used to beat someone up – including ourselves – then you are absolutely right…..you will resent it the whole time you’re on it and eventually you’ll get “fed up” and blow the diet. At least that’s what happens with my food diets!!

    Keep up the good work.

    John

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    1. Taylor says:

      Thanks, John! I completely agree. I think that budgets can be excellent tools if they used correctly. Like you, I’m a pretty natural saver, so tracking my expenses allows me amazing peace of mind. But the minute I start gratuitously restricting myself or shaming myself for a purchase, I know it’s time to take a step back and take a gentler approach/cut myself some slack. I’m glad that you’ve found your middle ground 🙂

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  11. Mr Nerd says:

    So true! As with food, I go for the change in lifestyle approach rather than a jarring diet. Often the most effective and long last changes are the slow progressive ones. Going from one latte a day to one every other day is a much easier transition. You still get your indulgence, but you’re also achieving your goal of cutting back. If all goes well you can continue cutting it, until you no longer crave the latte.

    Binge saving also doesn’t tend to work as you end up binge spending. Slow and steady wins the race!

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    1. Taylor says:

      I totally agree and the lattes are the perfect example! Unfortunately, I can be a pretty extreme person (as illustrated through my failed food diets, haha) But working with my money mindset and having my goal of paying off my loans has really helped me to find the middle ground. It’s also interesting because food and money are two things that will ALWAYS be present in our lives, so finding the middle ground seems like a no brainer since you can’t them out entirely! Thanks for stopping by 🙂

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  12. Jen @ Frugal Millennial says:

    I think it depends largely on someone’s personality. I once read an article on another blog about the distinction between “moderators” and “abstainers”. They said that moderators hate strict rules and if they try not to spend any money or eat any junk food, they’ll get frustrated and go on a shopping spree or eat a whole cake. Abstainers, on the other hand, are more like addicts – they prefer to abstain completely because that’s easier for them. An abstainer would find it easier to eat no cookies instead of eating one cookie – because one cookie could easily lead to 10 cookies. So I think diets (spending or food) can work for some people, but for others they will do more harm than good. For many people, moderation is best.

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