I’ve watched friends diet and fail, and I’ve watched friends spiral into debt, recklessly invest, or fail to save for retirement.
Each time I’m reminded that the fundamentals of money management are similar to the fundamentals of weight loss:
#1: Perfect is the Enemy of Good.
It’s far better to have a “good” plan you’ll follow than to have a “perfect” plan that’s too tough to follow.
#2: Think Long-Term.
Supermodel Kate Moss is famous for saying “nothing tastes as good as skinny feels.” Nothing you buy is as rewarding as having true wealth and being financially free.
Researchers found that it’s not what you own that makes you happy. Happiness comes from the freedom and choices that your money affords you.
#3: It’s Not About How You Look. It’s About How You Feel.
Have you noticed how some people who have reached their target weight continue to eat healthy and exercise? When you ask what their motivation is, they almost universally reply: “This makes my body feel better.” They don’t emphasize their flat stomach – they emphasize the way they feel after jogging five miles.
Ask wealthy people why they continue to save, and they’ll almost universally say: “Because it makes sense.”
Money is a weak motivator if your only goal is outward appearance – designer clothes and sports cars. Money is a great motivator if your goal is — like with healthy eating — to feel healthy from the inside out.
Financial security lets you leave a job you hate, change careers, start a business or feed a huge family. In other words, you’ll feel more free and in control.
#4: Small Splurges Don’t Matter. Long-Term Habits Do.
If you’re trying to maintain your waistline, one Friday night splurge on a steak dinner with margaritas and cheesecake ultimately won’t matter. What matters are your long-term habits: do you follow that Friday night splurge dinner with a bowl of oatmeal, handful of almonds and a jog on Saturday morning? Or do you follow that Friday night dinner with a bacon-and-fried-eggs brunch?
The slow-and-steady habits – not the occasional splurges – create results.
The same is true of your wallet. Enjoy that expensive Friday night steak – just follow it with healthy habits for the rest of the week.
#5: Crash Diets Don’t Work.
Extreme frugality stinks – and is counterproductive. Being too cheap (or too hungry) leads to feeling deprived – which leads to overindulging.
If you’re hungry, you’ll more likely to gorge on bacon and nachos. If you’re living too frugally, you might snap one day, blowing your savings on a Louis Vuitton handbag.
The health industry warns you against “yo-yo dieting” – and I’m warning you against “frugality fatigue.” Same idea, different applications.
#6: Consistency is Key
Am I repeating myself now? It ridiculous to eat only raw veggies for a week if you know you’ll splurge on chocolate and cheeseburgers on Friday. You’re better off adopting a sensible eating plan that you can consistently stick to. Remember lesson #1: perfect is the enemy of good.
Want to learn more about the Psychology of Money? Check out these posts:
- Forget Your Debt. Just Forget About It. Really.
- 5 Habits that Help me Save Without Trying
- Surprising Research Reveals How to Be Happier
- Superman is Dead: The Real Secret to Success
Your comment about Frugality Fatigue really reminds me of my situation. I constantly have to remind myself that spending an extra 10$ on a purse I really need, or 4$ for a new top I found on clearance won’t actually ruin my financial life (and if it does I have bigger problems to worry about)
@SillySimple — I have the same problem! Sometimes I find myself reluctant to part with $3 or $5, and I have to remind myself that in the grand scheme, those amounts don’t matter.
The other day, my boyfriend and I were leaving the country and realized we had forgotten to pay the water bill. Our checkbook was at my boyfriend’s office, on the other side of town. The only option remaining was to pay online, but that had a $5 added “convenience charge.” We were both SO reluctant to pay that extra $5, and brainstormed all these different ideas about how we could avoid it — maybe we could ask my dad to drive to the office to get the checkbook? maybe we could call and ask a manager to waive it? — before we realized we were devoting more time and energy to this $5 than it’s worth.
My sister and I were talking about this the other day. Managing money is so much like managing weight. Easier said than done, but possible at any level. Takes some discipline and some leeway. Great post!
Good advice, Paula. Slow and steady in both weight management and wealth management is best than quick solutions.
This was speaking directly to me. I’m so inpatient and I need to work on that in order to be successful with my finances and my weight.
Hi Paula
I agree with everything you say here, but I’d love to know how you convince someone to do it. How do you teach discipline?
One of my favorite notions on how to “learn discipline” comes from productivity expert David Allen, who talks about the “Scuzz factor.” Everyone has a different “scuzz” threshold — the point at which things become so intolerable that they can’t help but remedy it. He gives the example of brushing your teeth. No one needs to get motivated to brush their teeth. If they don’t do it, their mouth will feel so “scuzzy,” so disgusting, that they can’t help but brush their teeth.
Now, everyone’s scuzz factor is different. Some people feel disgusting if they don’t brush their teeth three times a day. Others feel okay about brushing their teeth only once a day. But “scuzz factor” can be learned: you can train yourself to set the bar higher. And once that bar is set, you can’t help but act on it.
I love the link between weight and finances, but I really loved the Scuzz factor. I think I need to set my Scuzz factor bar higher in my own finances — I could do better, even though I do pretty well frugally right now
Everything takes its time. This is the reason behind naming my blog as One Cent At A Time. Consistency and persistence are the two important qualities we all should have