Financial Diet

Ways to make Financial Dieting a habit

Consumers can get blue over their lack of green, especially when bills arrive. A budget, or financial diet, can help improve your financial health. Similar to watching one's weight, a financial diet provides a system to become more money conscious.

Keep a log. Much like a nutritional diet, keep a daily log tracking how much you spend. You can't begin to get a handle on your finances until you know how much money you make and where it goes. Take a month to chart your finances, whether it's in a spreadsheet like the example here, or on a piece of scrap paper - tally every expense.

Get organized. Locate your regular payments including: mortgage, car loans, and credit cards. Keep ATM receipts, bills, and tax records organized in labeled files. This will help you stay on track with your financial diet and make it easier when it's time to pay bills. Use Bank Online to keep track of income and expenses.

Set a realistic budget. After you've written down a month of expenditures, you should organize them into basic categories such as:
Housing / Utilities Transportation Food
Entertainment Health / Beauty Savings
Calculate where you spend your money and you might be surprised at what you see. Use this knowledge as the power to start limiting some frivolous spending.

Set goals and write them down. What are your financial goals? Write each one down - large or small. Pick just three to five things to work toward now, and keep that list in a visible place, such as your refrigerator door. Use our handy calculators to help you put your goals into perspective.

Put your spending on a diet. Once you've seen where you spend your money, you can start cutting out some non-essential categories where it makes sense. Split purchases into "needs" and "wants" categories. For example, you might need a cell phone, but you could be paying for extra features that go unused.

Get out of debt. Determine how much you owe and prioritize payments. Pay off credit cards with the highest interest rates first, while paying at least the minimum balance (more if you can) on others. Use Bill Pay to schedule payments to regularly be made online so you don't miss a due date.

Pay attention. Just like reading the labels on the foods you eat, you should read your bills and statements each month. This helps you keep track of your spending, see what you can cut out, and alerts you to fraud or mistakes on your account. Use e-Statements to access 18 months of bank statements electronically.

Stick to your budget. After you've examined your finances and made a realistic budget, the hard part starts. Just like losing weight, financial fitness must become a habit. The best way to replace a bad habit with a good one is to give yourself a positive alternative. For example if you buy shoes whenever you walk past a display at the mall, give yourself a positive alternative by deliberately selecting a pair that you really love, then saving up for it. Turning down an impulse buy is easier when you mentally "spend" that money on something you want more.

Give yourself a present - save for next year. Continue saving money every month (no matter how small) for future needs such as college or retirement - or even next year's Christmas gifts. Whenever you are able to reduce spending in one area, see if you can move a portion of those funds into the "savings" category. If you have to cut back the amount you save, never cut back to $0.

Make saving automatic. Save just $25 each month and you'll have an extra $300 after a year, plus whatever interest you earn on the account. Talk to a Personal Banker who can help you set up automatic savings where a small amount of money comes out of each paycheck and goes into a savings fund.

Keep it simple. If sticking with your financial diet requires a major money overhaul, it can feel overwhelming. Remember the most basic fact about building wealth: save more than you spend.

Much like keeping physically fit, staying financially fit requires motivation to get yourself in shape and stay that way. Sometimes the help of an expert can make it easier to stay motivated and find new ways to accomplish your goal. If you've tried cutting expenses on your own but still can't seem to get out of debt, visit a SNBT Personal Banker or one of our Retirement Experts®. Talk with a professional who will help you set a budget and stay on track toward your financial diet.