Are You On A Financial Diet Yet?

By Sanesh Mathew | January 11, 2019

Get rid of all the unwanted stuff that’s wrecking your finances and become financially healthy with a financial diet. Read on to know more.

This year, you can forget about Keto, Atkins and GM because the latest fad is the ‘financial diet’.

Just like your body requires a proper diet to get in shape, your finances also need a clean diet to stay in shape. A financial diet can help you get rid of all the unwanted stuff that’s wrecking your finances and get you fiscally fit. But, mind you, it’s not going to be an easy ride. Just like your Keto/Atkins/GM diets, the key is to start slow and be consistent, and the results will follow.

Additional Reading: Exercise Your Financial Muscle In 2019

Not sure how to start a financial diet? No worries! Here are a few simple expert-backed strategies designed especially for beginners to get started with a financial diet:

Tracking your expenses is a good start

You may have often said to yourself that you plan to cut down on your budget. But, in most cases, there was never a budget in the first place. How do you plan to cut down on something that doesn’t exist? You get the drift here, right?

Budgeting can transform your financial life. So, start by creating a budget. All it requires is a sheet of paper and a pen, or just open a spreadsheet, or you can rely on any of the many budgeting apps.

Having a budget in place can help expose the leaks in your wallet. This, in turn, will help you better strategise your spending.

Kick out the unwanted stuff

Once you have a budget in place, you’ll have a clear idea where all your money is going. And once you’ve identified this, it’s time to start trimming unwanted expenses.

You’ve probably been spending a lot on online shopping, food takeaways or at supermarkets/restaurants, but you haven’t realised it. Or you have been paying for cable or gym or broadband but haven’t been using the services.

These spends prove costly in the long run. For instance, let’s say you spend Rs. 500 every day on food takeaways (breakfast, lunch and dinner). That’s a whopping Rs. 1,80,000 in a year (15,000 in a month). Don’t you think it’s way too much to spend on food? Now imagine how much money you’ll end up saving in a year if you started cooking (or even hired a cook).

So, it’s best to get rid of your unnecessary expenses or at least have a better spending plan in place, so that you don’t end up overspending unnecessarily. Doing so will help you save a lot more than you’re doing today.

Additional Reading: The Fight For Financial Independence: 5 Monthly Expenses To Avoid To Increase Your Savings

Be more active in financial matters

You have to be a more active participant in all financial matters that concern you. When it comes to finances, there are a lot of important decisions to be made.

Making the right investments, choosing the right financial products, planning one’s vacations/big-ticket purchases, tax planning, household expenses, kids’ education etc. are just a few important finance-related matters that concerns every individual at some point in their lives.

You must be well prepared to tackle such matters. So, how do you prepare yourself? Here are a few must-dos:

Chart out your financial goals and work towards them

With a budget in place, you will be quite aware of where you stand financially. But that’s not enough. A budget lets you track your expenses, cut out unnecessary expenses and save more money. But what do you do with all the money?

Of course, it’s a good idea to leave it in Savings Account or in a locker. However, if you want to grow your wealth, then it’s not enough to put away your money in a bank account or a locker. You have to invest in the right avenues to make the most of it.

Before you start investing, we suggest you list down your financial goals and assign each a realistic time frame. Based on the nature of the goal and the time frame attached to it, you must then choose the right investment avenue to meet the goal. For instance, in case of long-term goals such as kids’ education or retirement, equities are the best investment option. However, for short-term goals such as buying a car, it is best to go for a Liquid Fund or a debt Mutual fund.

If you find it difficult to choose investment options for your goals, you can always consult a financial planner.

Keep these in mind while on the financial diet

  • Budgeting is important for your financial health.
  • Have a sound picture of where you stand financially. This includes knowing your credit history, debts, investments, and so on.
  • All your financial decisions must be based on your financial goals.
  • Indulgence is fine as long as it’s not an everyday affair.
  • Always have a Plan B in place. Things won’t always go as planned.
  • Invest in your happiness (just don’t overdo it though).

Easy, ain’t it? What are you waiting for then? Get started with the diet already!

Additional Reading: Habits Of The Fiscally Fit

Psst! Investments? Think BankBazaar. Click the link below to get started.

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