Never underestimate the power of a closet-purge. For Brooklyn-based writer Chelsea Fagan, 25, it resulted in a life-changing epiphany. “I felt like I had tons and tons of things, but nothing that I really liked or loved or invested in,” she says. “I realized how much money I spent without realizing it.”
To correct her spending-without-thinking habit, she decided to get real about her budget—and wrote all about it in a new blog, The Financial Diet. The experiment has been a success. She’s reveling in consuming less, saving money more and controlling her impulse shopping habit: “Your life just becomes easier.”
Here, find Fagan’s advice for kick-starting your own financial diet.
Take off the budget blinders If you are willfully ignorant to the reality of your spending, then it’s time to take off the blinders. But that doesn’t mean you have to spend hours in front of your computer in spreadsheet hell. Instead, Fagan recommends taking advantage of all the budgeting apps and programs out there.
“I love programs like Mint that help organize your budget and break down how you spend your money. It takes five minutes and goes through all your accounts and cards and pops up a nice infographic with all the different categories you’ve been spending in.”
Put the info to work Now that you know you’re spending upwards of $150/month on waxing and “nail art,” it’s time to consider how you can trim the fat from your monthly maintenance with some old-fashioned DIY. For example, Fagan gave up her “must-have” mani indulgence and learned to do her own nails. “It took some time,” she says, but now she boasts her mani could rival a salon’s.
Don’t go budget crazy Avoid setting unrealistic financial goals or going all extreme couponing overnight, says Fagan. Extreme budgeting, like extreme dieting, is a recipe for failure. “I really actively discourage going overboard with savings or what you’re going to take out of your budget,” she says. “I always tell people to start really, really small because if you start big it’s like going on a diet and removing 800 calories a day, you’re probably going to give up on the whole idea.”
Instead, set a more modest goal to save 10 percent of your earnings each month. (Fagan recommends automatic withdrawal into a savings account that you can’t access.)
Start cooking more There’s nothing glamorous about making dinner after work, but then again there’s nothing really glamorous about your monthly overdraft, amirite? So, ease up on the prepared meals, the takeout dinners and the expensive coffees, and start cooking more.
Fagan aims to cook for herself four times a week and she takes a lot of shortcuts too, preparing reams of rice in advance and stuffing her freezer with frozen veggies that can easily translate into a quick-and-easy post-work stir-fry.
You have to come to terms with the fact that there’s no “super-easy quick-fix” to getting around preparing your own food, says Fagan (hence your pricey weekly salad bar addiction). Instead, it’s kind of like your workout, a necessary investment in short-term misery for overall good health. “It’s one of those things where you just have to shift your mindset entirely and see it as a part of your day.”
Be a deliberate spender, not a reactive one Instead of letting advertisers tell you what you “need” to buy, determine what you need and operate accordingly.
It may sound silly but writing a good grocery list (i.e. food that translates into meals) is a first step in wrestling control of your spending and overcoming an impulse buying habit, says Fagan.“You’re not just buying Oreos and Windex,” she jokes.
The same goes for clothing. Fagan has radically altered her approach to shopping. Instead of reacting to sales and retailer’s online newsletters (Do yourself a favour, she says, and unsubscribe stat), she thinks about what she wants to add to her wardrobe and eschews fly-by-night trends. “I don’t buy many things, but I’m very deliberate about how I will buy a piece of clothing,” she says. “I find it and try on several versions of it at different stores. Then I wait for it to go on sale.”