Last Updated on February 27, 2023 by Melissa S.
It was only when I came up with the idea of “Skinny Spending” that I began to realise just how many similarities there are between dieting and saving money, and how easy it can be to fall off the wagon in each case. And while this blog isn’t really to do with healthy eating, there is certainly a lot to be learned by treating your budget like a diet. Here’s how.
Use a spending diary
It may sound obvious, but anyone who has done this will testify just how much of an eye opener it is. Just like its food based counterpart, every spend should be recorded over the period of a month (or longer if you wish) to determine your true spending habits.
Just like that sneaky extra biscuit you would have forgotten had it not been logged in your food diary, a spending diary will reveal where you are perhaps wasting money without even realising it. Buying your lunch every day? That adds up. And not just the calories, but they will almost certainly be more than homemade (we aren’t here to actually talk healthy eating – but it’s a bonus, right?).
So start today. Or tomorrow if you like. Write down everything you buy for a month. If you are shocked by the results, then you know there is room to take action.
“Healthy” swaps (For healthy, read cheaper)
So you might be familiar with the concept of downshifting your groceries – where you buy a cheaper brand and if you cannot tell the difference then you stick to buying the cheaper item. If you are unhappy with the cheaper option then simply swap back.
I’m not talking just about food here – there are plenty of other areas you can save money in by swapping to cheaper brands or services – for example, beauty products. The golden rule, as with the food downshift, is if you are not as happy with the cheaper brand then swap back. But more often than not you may be pleasantly surprised.
Cheaper isn’t always better
This might sound like a bit of a contradiction after point 2, but buying 10 cheap items of rubbish will no doubt waste more money than just buying one higher quality item.
The trick is knowing where to splurge and where to save. This is obviously going to vary from person to person and it might take you a little time to suss out which items are actually worth paying the extra for, but next time you find yourself in a pound shop with a trolleyload of bargains, ask yourself if you are actually getting value for money, or are the bargain shops sabotaging your budget?
Crash diets don’t work.
How many times have you been determined to save as much money as you can and planned out an extremely tight budget in order to achieve your goal quickly…then got bored after a week and end up crashing back down to reality with a thud? (Or a binge spend on your Visa card?) It’s a well trodden path in the diet world, as very few people can actually keep up an intake of highly restricted calories. Not to mention the fact that it is absolutely not the right way to lose weight, of course.
People seem to enjoy far more success on balanced diets that do not restrict or ban certain foods, and the same is true with finances. You need to set a realistic budget giving yourself enough to live on without starving yourself – both literally and financially. Which leads on nicely to the next point…
Set your calorie limit (budget)
Budgeting might seem like the most obvious area of money saving, so it always surprises me how many people do not set themselves a budget for the month or week and just seem to hope for the best. If you find you are hanging on for payday each month and then go out and blow most of it in the first week or so, then budgeting is definitely for you. But where to start?
If you followed tip number 1 and recorded a money diary for the month you should have a good idea of where you can make any possible savings, but before that you need to work out what your actual expenditure is.
Once you have totted up the essential bills such as rent, mortgage, electricity etc, you can begin to work out how much you have left for food, clothes and spending money and where savings can be made.
Simplify the process by using the tools available in the Workout Your Wallet Toolkit.
About the Author
Melissa is a working parent who left behind a senior management salary for a better work/life balance. Following her own money saving and money making strategies she was able to clear debt and live a life she loves. Blogging, selling digital products on Etsy and selling preloved items on eBay are her favourite side hustles. Read her story here.