Updated on 12.14.08

Some Thoughts on “Wallet Fasting”

Trent Hamm

Gorilla Tape Wallet: Inner Slots by Jake Sutton on Flickr!The first reaction of many people when they realize that they have a spending problem is to simply go on a “wallet fast.” They stop spending money, period. They cut every little bit of extra pleasure out of their lives, going immediately from someone who overspends just a bit to someone who cuts every corner.

And it works well – for a few weeks. That’s usually enough time for some cash to be replenished in the checking account and for some of those late bills to be caught up.

That’s usually when the inevitable relapse happens. You look at your checking account balance and that pile of paid bills and convince yourself that one little splurge is fine. And before you know it, you’re right back in the routine of doing all of the things you did before – the habits that added up to spending more than you should.

This routine is useless. I should know, I did it fairly often during my young adult years. I would get a sense that my financial life was out of whack, make a bunch of superficial changes that would last until I saw that my checking account balance was healthy, and then those changes would go right out the door.

(If you think this sounds a lot like what happens when a person tries to diet, sees a bit of success, then falls off the wagon, you’re right.)

So what actually brought about long-term change for me? It was a mix of things – inspiration for long term change was a big part of the puzzle, but another major factor was the realization that changing specific tactics didn’t really matter if they weren’t also met with internal changes.

In other words, the real question is whether or not you want to make a genuine long-term change to your life or whether you just want to cover the next few bills that come in.

For the longest time, I was perfectly happy to just keep the bills covered, and any money-saving tactics I would use were just enough to put a Band-Aid over the immediate problem. And that was good enough for me. It was no different than a bit of fasting to get down to some “target weight” for a big event – I’d achieve my short-term goal, but there was no motivation or desire for a long term change.

If you find yourself on a regular cycle of “wallet fasts,” only to find yourself time and time again back where you started, it might be time to ask yourself some serious questions about your long term plans and dreams. Is this where you always want to be? Do you have people relying on you who need you to step up to the plate?

Real change in your personal finances doesn’t come from dropping everything “fun” in your life. It comes from serious consideration of what you really want out of life – and then evaluating the choices you make every day with that long term dream in mind.

Perhaps 2009 is the year you can give up wallet fasting and find a new way to live.

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  1. Good post, and it’s very true about the similarities with dieting.

    I do think that a “wallet fast” is still a useful tool once in a while after our financial house is pretty much in order. At that point it becomes a game and useful occasional discipline. I hadn’t used the term before, but I have done this from time to time, just because. Then I have to ask myself whether I’m spending money (on gasoline) if I drive to the library to borrow some DVDs for free.

    It’s certainly possible to take the wallet fast thing to an extreme.

  2. Chris says:

    Some great thoughts Trent. I’m pretty sure every person who attempts to make a change like this falls back into this trap at some point or another. One way to avoid spending that extra money in the checking account that works for me is to immediately divide my paychecks into separate accounts. Personally, I divide it up by putting 30% into savings which eventually gets invested, 10% into a “big purchases” account which is for things like a new computer, camera, etc., 15% goes into paying off principal on my debt, and the rest goes into my regular checking account to pay for regular expenses.

    I know you’re a big ING fan Trent, and I love them too because of how easy it is to set up these accounts and divide money up between them.

  3. KC says:

    Something that worked for me was keeping a spending journal. And whenever I felt the urge to splurge (or fast) or whenever I didn’t have any money I’d look back at that journal to figure out why. Then I’d see some foolish “urge” purchases I made and I’d suddenly lose the “urge” to spend more. Or if I was thinking of fasting I’d see where I didn’t spend any money for a few weeks then I went out and blew a bunch of money. That spending journal always seemed to have a calming effect on me no matter what emotions I was having.

  4. Bill M says:

    People need think of their financial lives like a marathon, instead of sprints. You mess up and you run to fix it, instead if we all slow down a little bit and pace our selves we won’t get into the problem in the first place.

  5. steve says:

    @ bill m: “if we all slow down a little bit and pace our selves we won’t get into the problem in the first place.”

    Yeah, great point. slowing down is a major key to solving this problem. slowing down to think about what’s important, slowing down to decide whether it really makes sense to buy that thing, slowing down to decide whether it really makes sense to work but not save any money….

    great point.

  6. The same logic applies to dieting as well: diets where people fast to lose weight, invariably lead to people gaining even more weight when they stop or as giving up “treats” makes the cravings more urgent.

  7. Jackie says:

    When I was a grad student and living on a very fixed income, I kept a spending journal for the first or month or two, to keep track of where my money was going and cut down on waste. I’m actually thinking of starting it up again after the holidays, but the trick will be convincing my partner to do the same….

  8. Saver Queen says:

    Excellent article – you’re right, it requires a shift in consciousness. But I think that the change can happen gradually – and like dieting, after you get used to spending less you start to realize that you actually need less to be happy. One of my strategies that I recommend is giving yourself little treats along the way – small pleasures here or there, either that cost money or are free – to keep yourself from spend bingeing. One woman I know actually builds this right into her budget. I know myself well enough to know when I need to give myself a little something before I start feeling too deprived.

  9. Someone else beat me to it, but this is exactly like dieting.

    This is a great piece. I used it to explain to my Mom why I still buy some yarn (but not as much as before.)

  10. I’d argue that it is actually somewhat useful. It sounds like adopting a minimum level of pain (debt) but avoiding running the debt up by doing the occasional fasting. This can be a stable situation. If there is no debt it is simply equivalent to saving up for something before you buy it.

  11. Julie says:

    Congratulations on the book, Trent! Your timing is impeccable…right before the holidays, and during a time when most people are looking to “live cheap.” Very exciting! I can’t wait to find it at my local book store.

  12. Anna says:

    One trick I use while being economical is to load up on books from the public library — up to the limit, if there is one, whether or not I have time to read them all. It gives me that feeling of being luxuriously rich, but I haven’t spent a cent — unless I keep the books past the due date ;-)

  13. Peter says:

    I posted about this similarity between dieting and debt-reduction yesterday:

    ‘It takes time to lose weight, and takes time to reduce debts, but without a countervailing long-term plan, it is the equivalent of walking at 4mph on a 5mph treadmill. To lose weight – as to become richer – you must break sweat and make it a habit. Diet for life!’

  14. SS says:

    I think when you are hungry and spent your money
    on something too much or frivolous you learn to save if you don’t want to be hungry again because you spent all your money.

  15. FixThePig says:

    Creating a sense of frugality takes time. It’s like anything in life that takes discipline; people are habitual by nature. Once you get in to the spending habit it’s tough to get out and the same can be said for getting in the saving habit. If you stick with it long enough, you will begin to realize what you need vs. what you want.

  16. TStrump says:

    Great article.
    Deprivation never works as a strategy for the long term.
    The best way to change behaviour is to keep track and change it over time.

  17. doctor S says:

    I do think it is a useful tool, however, I also agree that it is only a temporary solution to a more severe problem. I go through cycles in which I cut out pretty much everything unneccessary from my budget.

    The long term solution to this is lean budgeting and developing a mindset that is reasonable when evaluating spending on needs vs wants. It is good to enjoy one self but everything must be reasonable.

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