I've said before that the words "diet" and "budget" are nasty, negative labels that equal Catholic school guilt. But like it or not there are part of our vernacular. Most of us fuss, worry or think about each of these during different times in our lives. The other day it occurred to me that they are actually quite similar. In fact, you can look at almost any diet tip and apply it to budgeting or vice versa. Here are 5 that I quickly came up with:
1. (diet) Take off the weight slowly for long-term success (budget) Controlling debt can be a slow business
Sure some people brag about dropping 20 pounds in 3 days, but we all know that that's not true for most of us. Likewise, if you've accumulated debt you could shrink it by rolling it into a lower interest rate loan, but that's just smoke and mirrors. It's a good move, but don't fool yourself into thinking you've got control of the situation. Lowering your interest rates should always be your goal, but you've still got to work at keeping down the debt.
2. (diet) Exercise is essential for weight loss—(budget) You need to work a little to reduce debt
Just like there is no magic pill that will make you healthy and slim, there is no overnight cure for debt. You'll need to work at lowering your interest rates, consistently paying down the debt and resisting incurring new debt.
3. (diet) Stay focused on being healthy, not on becoming thin—(budget) Stay focused on building wealth, not eliminating debt
Remember to keep your long-term goal in focus. You probably want to be thinner because you want to be more attractive, but being healthier is the ultimate in beauty. And your not trying to just get rid of some debt, your goal is to build enough wealth that will enable you to live as you would like.
4. (diet) Find out why you overeat—(budget) Find out why you overspend.
Some people eat for comfort, some spend for comfort, but your debt accumulation may not be that straight forward. Maybe you've run into medical expenses or some other emergency. What have you learned from this experience? By analyzing your spending you'll see that maybe you need to aim for a larger emergency fund or curb your enthusiasm for the latest techno gizmos.
5. (diet) Weight loss support: join a weight management group—(budget) Don’t be secretive about your debt management goals.
Usually when you are on a diet everyone that you know knows about the diet. It's easier that way. When they see you reaching for the donut they'll stop you. They'll also comment on how great you're looking. Debt management, however, isn't typically the same. We wear our weight out in public, but hide our debt like a dark secret. If you're serious about paying down your debt, come out of the closet. You need the support. Without it you'll find yourself trying to fake it when friends suggest a fancy dinner and a night at the clubs. Friends who know your goals will support you. They'll understand if you only order an appetizer at the restaurant. They'll get if you'd rather go for hike than to the ballgame. And they'll be there to congratulate you when you've hit your milestones.
The common denominator in dieting and budgeting is that you need to make lifestyle changes in order to be successful. So even though I don't like those words there is just no ignoring them.