This is why you should go on a diet
A money diet will help you gain clarity and get your finances in better shape.
A money diet is like a normal weight loss or health diet. But now you’re not cutting down on unhealthy food to get your body into good shape, you’re cutting down on spending to get your finances into good condition. It involves limiting your spending to only essential needs and occasional treats for sticking to the plan.
It is especially important when you’re trying to get out of a sticky financial situation e.g. neck deep debts, overdue loans, unpaid rent etc.
Here are 4 simple steps to guide you:
1. Start by cutting your spending by 50%
This sounds extreme but think of it as reducing sugar and oil intake because of unhealthy cholesterol. Okay, okay. 50% is actually a lot to start with and it’s not a rule that’s set in stone. It’s actually best to start from a level that works for you after you’ve considered why you want to go on the diet and how much discipline is required to get to the financial stage you desire. It could be anywhere from a 10–50% spending cut .
2. Analyse your bank statements
It’s also important to analyse your bank statements critically to identify key spending areas, compare your needs and wants and determine where to effect the spending cuts. A simple spreadsheet or pen and paper should do the trick.
3. Track your diet
Do this by recording all your daily expenses in your phone notepad, a notebook or a spending tracker app.
4. Measure your progress weekly
On weekends for instance, calculate your weekly expenses, compare them with your set goals and see how well you’ve done. This is kind of like checking the scale to see if your weight has reduced after all that dieting.
And you know what?
All those funds you’re saving by cutting down on your expenses can be regularly deposited in a Pettysave account as savings to earn up to 12% interest per year or as investments to earn 13–40% returns.
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Pettysave enables you to attain true financial freedom through savings and investments which can be scheduled conveniently. The app helps you to plan your finances, save towards life goals and invest in minimal risk investment options. Start earning passive income and growing your net worth with Pettysave.
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Oyin from Pettysave