In some ways, I think it is. When you go on a diet, you have a specific goal to lose weight or improve your health. If it’s to lose weight, you cut carbs, fat or calories. If it’s to improve health, you eat healthier foods and less junk.
For me, saving money is like going on a healthy diet. This means that I don’t focus on cutting specific luxuries from my life like one might cut carbs. Instead, I focus on buying items that truly add value to my life, just like one might eat foods that are truly healthy and nutritious.
So how does this translate to day-to-day life? For starters, I minimize my spending on technology. Every few months to a year, a new generation of phones, tablets and/or computers are released, adding little value over older generations. So unless the technology is more than just an incremental improvement to screen resolution or camera, I’ll avoid an expensive upgrade.
Second, I spend my money with people that I have valuable relationships. This means I avoid eating out or enjoying expensive activities by myself. For example, it’s easy to fall into a habit of picking up lunch at the deli or grabbing coffee at Starbucks everyday. But unless I’m having lunch or coffee with my girlfriend, family or close friend, I can easily replace these habits by making my own lunch or brewing my own coffee.
Third, I buy things that improve my health and avoid things that don’t. This means I’ll happily spend $2,000 on a nice bike but wince at spending two bucks on a soda. Similarly, I’ll pay double for organic foods but shy away from buying cheap ramen cups. But just like with any diet, I’ll allow myself to cheat every once in awhile.
For me, the goal is to transform these healthy money saving habits into long-term lifestyle changes. As a result, these changes will improve my finances, health and relationships with others.
On the other hand, saving money can also feel like a weight-loss diet. Just like a serious dieter who deprives himself of carbs or fat, a money saver can deprive himself of valuable experiences and opportunities. In the end, the money saver puts himself at risk of becoming increasingly stingy and perish the thought, cheap.
So what’s the solution for saving money and not becoming cheap? Choosing the right goal for saving. Ask yourself, “Am I on this ‘diet’ to lose weight or to be healthy?” If the answer is the latter, then you’re on your way to improving your health, finances and your relationships. If the answer is the former, you may need a visit from the three Ghosts of Christmas.