What It Is

Most of the talk in the financial blogosphere is pretty negative these days. Just about everybody is talking about the slowing of economic growth, the stagnant housing market, increased numbers of bankruptcies, and the looming recession.

The truth is, many of us need to go on a personal financial diet. Is it time to shed some of that extra weight? In good times we all tend to extend ourselves a bit more than we should. Then when the inevitable slow down hits we have no choice but to cut out the fat.

Just as with dieting, keeping your finances under control is mostly a psychological battle. You have to create a plan of attack where you detail how much you’re going to spend and what you’re going to give up. Then you have to develop techniques to keep yourself on the straight and narrow.

Just as with regular dieting, there are rules you should follow when doing some finacial dieting. One of the most important is to avoid binge spending. Develop a daily and weekly budget. Try to include everything that is important and eliminate everything that isn’t. Then don’t let yourself get sucked into impulsive buying. That may be fine when your finances are healthy. But when you’re trying to nurse them back to health resisting this kind of tempation can make the difference between success and failure.

On the other hand, we are all human, and that means we all fall victim to temptation from time to time. Don’t get down on yourself when your will power slips and you buy something you swore you weren’t going to buy. Just put it behind you and get back to the plan.

It can also be a great idea to reward yourself with small perks occasionally just to make your diet not seem so awful. That goes for normal diets or personal financial ones. Reward yourself from time to time - even budget for these extra perks. Then stay within your budget and you’ll have it both ways: you’ll stay on track and enjoy the struggle a little bit more.