What diets teach us about our finances

It’s that time of year when many of us are starting to be a little more conscious about what we eat and how much we exercise as the thought of a visit to the beach or a sunny poolside beckons.

And while for some of us, all that is required is perhaps a little restraint in the weeks leading up to our holiday, many of us are all too familiar with the yoyo routine of getting ourselves into better physical shape, only to revert to type once the holiday is over, when Christmas comes around or we just get tempted once too often.

When it comes to dieting and the way we run our finances, there are many parallels, but perhaps the most important lesson we can learn from failed attempts to get the perfect body shape is that willpower will only get us so far, if we don’t then adopt habits that become a natural part of our lifestyle.

We’re all familiar with stories of people who lost 10 stone, showed off their weight loss in magazines, only to put it all back on again. The same can be true of both debts and savings.

Many people do make strong efforts to pay down debts or build up savings ‘for a rainy day’ only to then either get back into debt once they have spent six months avoiding any social invitations and dodging the temptations of online shopping. With savings, it’s easy to build up your rainy day fund religiously for months but then you dip into it once, then once again, until the nest egg you had wanted to have available for emergencies is completely depleted.

As with weight loss, the trick is to use that initial boost of willpower to create lifelong healthy habits which are sustainable. It’s something all our advisors have in mind when they suggest saving up for a particular goal which really excites you and makes you feel happy — but which is not too far in the future.

We also steer clear of the fad of ‘pay off your mortgage in 3 years’ style advice which means living on beans for two years and never leaving your house.  It is impossible to keep up those kinds of ‘extreme’ regimes over long periods of time.

Instead, try to build ‘little and often’ habits. That could be making sure you spend time once a month to go over your spending, but that you always do this. Or it could mean putting £5 per week via direct debit into your savings. Habits which don’t require too much sustained willpower, and which soon become second nature are extremely powerful, and are the key to you getting your finances into the best possible shape and keeping them that way.