The following is a guest post from my friend Liz. She doesn’t have a blog but this post makes me think she should!

First, let me tell you how flattered I am to be guest-blogging!  Just a little background on me – I’m 27, married, live in fly-over country, and work as an attorney for the state government.  I’ve been interested in personal finance since I got my first real “adult” job two years ago (and the student loan bills to match!).

Something that struck me recently is how many popular diet tips or theories can be applied to one’s finances.  It does seem to boil down to the two constants – output and intake.  For weight loss, calorie output must be greater than calorie intake.  For financial security, one’s income must be greater than expenditures.  There are countless ways to make both these goals happen – but the underlying formula is very simple.

So here are some diet tips that can be repurposed as finance tips – because why waste that valuable brain space?

1)      Don’t think of it as a “diet” – think of it as a lifestyle change. No amount of quick fixes – diet pills, cleanses, shakes, saunas, those old-fashioned machines where the giant rubber band shakes you – will result in long-lasting weight loss.  And in the personal finance arena, no amount of credit consolidation services, 0% balance transfer cards, check floating, or refinancing will help you get out of debt.  These can all aid you in the short term – but eventually, the weight will creep back on, and the interest rates will creep back up.

For long-term stability, you need to reevaluate your relationship with food – or money, as the case may be. This may involve short-term sacrifice – eliminating your entertainment budget for a few months until you get your emergency fund beefed up, for example – but these short-term sacrifices will generally reduce the need for more long-term sacrifices.

2)     Before buying something – ask yourself “do I need this?” Both spending and eating can sometimes be done without thinking – finding yourself with a bowl of chips in front of the TV, or grabbing a $2 lip gloss from the checkout lane at the grocery store.  These subconscious actions can add up in real ways, both on your hips and your credit cards.

The first step is to identify the source of these behaviors – do you consume when you’re bored? When you’re upset? When you’re celebrating? Once you’re aware of your “triggers”, you can work on redirecting that energy elsewhere. One fairly successful tip I’ve incorporated into my consumer “diet” is the 24-hour rule. If you really, really want it, mull it over for a day.  If, after 24 hours, you’re still thinking about it and it’s within your budget, go for it!  If you’ve forgotten about it by the next day, it probably wasn’t worth it. (The same principle goes for food, although waiting a full 24 hours is probably not recommended!)

3)     If you slip up, acknowledge it, and get back on the horse. All is not lost. Everyone has days where everything seems out of control.  But one of the biggest mistakes many dieters make is turning a minor slip into full-fledged diet sabotage – with the justification that “I already screwed up my diet for the day, what’s a little more going to hurt?”

Don’t use these slip-ups as an excuse to get back into old habits. Forgive yourself – we’re only human, after all! – and start the next day with a clean slate.  This will keep those little slip-ups from turning into major ones.

4)     You can have anything you want, but you can’t have everything you want. I’m a firm believer that there’s room for some chocolate in every life – and every budget.  Whether your “chocolate” is an iPhone, getting your hair highlighted every 6 weeks, lunches out, driving a new car – if it’s important to you, by all means, make some room for it.

But a diet of only chocolate won’t get you far – and more non-essentials creeping into your budget means less to spare for the basics.  Analyze your budget periodically – are you spending more on your basics, or on your extras? If you find yourself going over your limit but are reluctant to make cuts, look at ways to increase your income.  No different from exercising to burn off an extra slice of pizza.

This ties into number 5…

5)     Completely depriving yourself almost always leads to a splurge. This is true in every area of life.  Just look at the way consumer spending has rebounded since 2008 – by all measures, we’re still in a recession, but many of us are chafing under our “recession budgets” and have resumed business as usual.

And this is the danger of treating a budget as a “diet”, rather than as the new normal. I think of this as “yo-yo budgeting” – keeping it completely bare-bones for a few months, putting money away into savings, then blowing everything on a vacation, or a new pair of shoes – because after all, you deserve it for being so good, right?

WRONG!

Rather than become a yo-yo budgeter, include enough space for extras in your budget so that you are meeting your goals without feeling deprived.  My husband and I use the allowance system to accomplish this – I can’t tell you how many arguments it’s averted.

And on a related note…

6)     Don’t wait to live. How often do dieters avoid buying new clothes with the idea that they need to lose a bit more first?    Many budgeters do the same – putting off expenditures and experiences until they save “just a little bit more.”

Balance is so important here.  Just as you don’t want to eat ramen noodles in retirement (I was going to say cat food, but have you seen how expensive it is?!?), you don’t want to postpone a lifetime of travel for retirement and find yourself unable to travel, or without a companion.  Try to look for the free way to do things, instead of believing you need to have others do for you. For instance, use a free tax software instead of having your itemizations done by an accountant or learn how to repair your own drywall instead of hiring out. Use self taught methods to perform needed tasks from a DIY point of view and you can have more things that you want and stay within budget.

Finding this balance is tricky, and many – myself included – are still getting there.  But I do think that balance is the key to everything. Balance work with play, saving with spending, and dressing-free salads with a big glass of red wine, and watch things fall into place!