Smart SpendingSmart Spending

Weight Watchers for your wallet

The advice for losing weight and shedding debt is remarkably similar. Here's how to put your spending on a diet.

By MSN Money Partner Feb 13, 2013 6:57PM

This post comes from Emily Guy Birken at partner blog Wise Bread.

 

Wise Bread logoAs both a financial blogger and an "amateur nutritionist" (and no, those are not sugar cookie crumbs on my chin, and you'll never prove otherwise), I have often noticed that many of the behavioral tips for dieting really overlap with the behavioral tips for paying off debt.

 

Image: Person on scale (© Purestock/SuperStock)In fact, the willpower necessary for avoiding spending temptations is very similar to the willpower needed to avoid the office donut box -- and just as difficult to harness. Changing your habits and behaviors is what really leads to long-term changes in your health, both fincially and overall.

 

So, with that in mind, let's look at four common diet tips out there and see how they relate to paying off your credit card debt. With these tips, you can kill two New Year's resolution birds with one stone.

 

1. You should consider whether you're really hungry.

At first glance, this advice from WebMD seems to have little to do with your Visa bill. But getting in touch with your body's hunger cues has a lot to do with listening to your own emotional state. Just as we will often eat mindlessly when we are bored, stressed or upset, we will also find ourselves heading to the mall or surfing Amazon to relieve an emotion that has nothing to do with our need for more stuff.

 

How to implement this advice

If you truly have a hard time determining the difference between a shopping need and want, go on a fast. Even though completely cutting out food is an unhealthy way to learn what hunger really feels like, going on a week- or month-long financial fast can be truly cleansing. It helps you to determine the difference between shopping to fill an emotional need and buying things you truly need.

 

The bonus is that at the end of a financial fast, the money you saved by not spending at all can be added to your credit card payment.

 

2. You should step on your scale daily.

This tip comes from Cosmopolitan (that bastion of excellent reporting). You can't know what work you have to do on either your diet or your debt payoff plan if you don't know where you are in the journey. That means you have to do two of the most dreaded personal chores: weigh yourself and log in to your credit card account.

 

Often, the first time you step on the scale or check out your credit card balance, it's enough for you to shut down and try to forget you ever knew how bad you let it get. But as long as you are willing to do work to improve your situation, your daily weigh-in/login will start informational but become inspirational as the numbers improve day after day and week after week.

 

How to implement this advice

Check your account balances. Right now. And don't just look at the big total. Go back over your individual purchases. This might give you some ideas for things you can return or help you find charges you need to dispute. Taking care of those right away will help that big, scary number go down. (The only way to get such immediate improvement with a scale is to strip down to your birthday suit -- and even then it's rarely an improvement worth freezing off your tooshie.)

 

Then keep looking at your accounts online regularly. It is a habit that will help you remember why you are working so hard to send every extra penny to your credit card bill. And it will keep you honest if you fall off the wagon and go on a shopping spree.

3. Go ahead and have that cookie.

Follow this advice from Shape magazine, because going cold turkey on your favorite things, whether they be Mallomars or shopping with your mom, is difficult. So difficult, in fact, that deciding that you will never do that again! is a great way to set yourself up for failure. Ultimately the cookie or the mall will call your name, and once you've cheated a little bit, why not go ahead and cheat a lot?

 

Psychologists and behavioral economists refer to this as the "what-the-hell" effect, and we have all felt it. (In point of fact, psychologists actually call this "counterregulatory behavior," but calling it the what-the-hell effect is much more concise, if slightly profane.) This effect explains our sense that dieting or refraining from spending money is either all or nothing, so the moment we have given in to temptation a little bit, we might as well throw our own guidelines out the window. "What the hell! I've already bought myself a new lipstick/eaten a brownie. I might as well go buy some new shoes and a purse/have a burger and a milkshake."

 

The way to combat this effect, both when you are dieting and when you're paying off debt, is to allow yourself cheats and consider that part of your plan. No one is capable of always avoiding temptation, and our brains are wired to think of ourselves as either dieting/refraining from spending or not, so the first time you slip up is often an opportunity to binge on whatever you've been denying yourself.

 

How to implement this advice

Plan ahead for when you will indulge in little shopping treats, and save up the cash to pay for them. If you love buying new clothes, save up about $100 in cash and go for a spree at a consignment store, where that amount of money can buy quite a lot. Not only will you satisfy your desire for shopping, you can also feel virtuous because it's not detracting from your debt payoff plan.

 

4. Celebrate success (but not with food).

One of the universal truths of the human makeup is that we are wired to want immediate gratification. Writes Dan Ariely in his book "Predictably Irrational": "If a particular desired behavior results in an immediate negative outcome (punishment), this behavior will be very difficult to promote, even if the ultimate outcome is highly desirable." In plain English, that means it's really hard to give something up now even if what it'll get us later is, in a word, awesome.

 

So, we need to bribe ourselves to behave. That's what celebrating little successes is all about. Every time we reach a small milestone -- whether it's losing the first 2 pounds or getting our credit card balance below a particular dollar amount -- we need to reward ourselves for all that hard work we've been doing.

 

Where this gets tough is in choosing the right type of reward. If you're dieting, rewarding yourself with a hot fudge sundae after running 5 miles leaves you basically where you started. Similarly, if you're trying to pay off your credit card, buying yourself a new video game to reward your thrifty ways will mess with your debt payoff mojo.

 

Following advice from Medicine.net, if you're only dieting or only paying down credit card debt, the fix is easy: You can spend money on rewards for weight loss successes, or you can eat something sinfully fattening as a reward for debt payoff successes. The problem is if you're trying to do both (or at least you're trying to be generally healthy in both of those areas of your life).

 

How to implement this advice

Find rewards that cost no money or calories and still make you feel great. Those could include a chat with an old friend, allowing yourself a free 30 minutes or more to get lost in your favorite (non-shopping) sites on the Internet (provided you don't already do this on a daily basis), pampering yourself with an at-home pedicure, taking a long nap in the middle of the day, or giving yourself a day off from chores you hate.

 

There are plenty of free ways to celebrate your small victories. You just have to think about the things you normally don't allow yourself and pick out the one or two that require no cash outlay. Having those rewards to look forward to in the near future will help you stay on track overall.

 

The bottom line

Reducing your waistline requires very similar behavior modifications to reducing your debt burden. Like losing weight, reducing debt needs a two-pronged approach: lowering your consumption and increasing your (payment) activity. If you read through weight loss advice lists (and they are plentiful!), remember that with just a little tweaking, many of those same pieces of advice can be used in your debt payoff journey.

 

More on Wise Bread and MSN Money:

1Comment
Feb 13, 2013 9:04PM
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If there is one thing I've learned about paying off debt, it is this: know how much you owe.  For 9 years I had an estimated number of how much I borrowed for my college education.  I can tell you with absolute certainty that while figuring out the exact number was temporarily depressing, it motivated me to get to work (both literally and figuratively).
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