Kickstart Your Financial Health with a Spending Diet: 6 Practical Tips

As the holiday season wraps up and the waistband tightens, many of us think about starting a new diet. Some diets are tough (we're looking at you, Whole30), while others are as simple as adding a weekly salad or cutting back on carbs. Just like our physical health, our financial health can sometimes feel off too. In fact, a 2023 survey by Payroll.org found that 78% of Americans live paycheck to paycheck or feel their income doesn't cover their basic expenses. So, how can we improve our financial health? By going on a “spending diet.” Here are six tips to get started:

1. Eat at Home More

One of the biggest money-drainers is eating out. It's convenient, especially when life gets busy, but cooking at home can save you a lot. For example, a spaghetti and meatballs dish at a popular Italian-American chain can start at $16 before taxes and tips. For just a dollar more, you can buy a box of pasta, a jar of sauce, and a bag of frozen meatballs to feed a family of four. This principle applies to coffee, work lunches, and desserts too. YouTube offers thousands of recipes for inspiration. Try eating at home one more night a week than you currently do—it’s a great first step on your spending diet.

2. Understand That Spent Money is Never Saved Money

If your spending diet includes more home cooking, you'll find yourself in the grocery store more often. Remember, just because something is on sale doesn't mean you need to buy it. Sales can help you spend less, but only if you’re buying items you actually need. Whether you're in a grocery store or at the mall, treat unnecessary purchases like walking past a Cinnabon on a diet—just keep walking.

3. Buy for Life

When you do need to buy something, like a hat, aim for quality that lasts. Investing in durable goods can save you money over time. Look for items you can "buy for life" in categories like clothes, mattresses, appliances, cooking equipment, and tools. Check out this Buy It for Life subreddit for recommendations and reviews.

4. Research for the Best Price

When you decide to make a purchase, especially in the "buy it for life" category, take the time to research the best price. A few five-minute Google searches can save you hundreds or even thousands of dollars. Look for digital coupons, promo codes, and special offers to maximize your savings.

5. Put Away the Credit Cards

While cashback rewards are tempting, the high-interest rates on credit cards are not. To avoid racking up debt, leave your credit cards at home. This helps ensure your balances go down, not up, reducing your monthly expenses in the long run.

6. Consolidate High-Interest Debt if it Makes Sense

If you're among the 29% whose income doesn't cover their standard expenses, you might have accumulated some credit card debt. Confronting this can be tough, but debt consolidation might help. While it won’t reduce the total debt, it can lower your monthly payments and the interest you pay, easing your financial burden.

By following these six steps, you can significantly reduce your monthly expenses. This frees up money to pay off debt or start investing. If you're ready to become financially healthy, join our upcoming webinar, “Essential Investment Concepts,” where we’ll discuss next steps after your spending diet is in full swing. Ready to take control of your financial future? Set up a meeting with me using this link.