Image from menshealth
When we hear the word detox, we often associate it with our health. We tend to do this to lose that extra pounds in our hips or perhaps do some internal cleansing. It is no wonder that juices and other detox programs have been a hit. Yet, we can always do the same in order put the pounds back into our bank account. And that is what we refer to as financial detox.
Detox is defined as a process or period of time in which one abstains from or rids the body of toxic or unhealthy substances. The process is then called detoxification. As such, we can always draw the same definition to our finances. In here, we abstain and even get rid of the financial toxic or unhealthy spending in order to beef up our expenses. But do take note that this must be measurable in terms of a period of time. Doing this will help us in so many ways. First, we can be able to increase our saved money, then we can be able to identify bad financial decisions and habits and we can be able to take control of our money and spending.
Should you be interested to perform a financial detox that I am also challenging myself, here are ways for us to get started.
Identify a Goal or a Motivation
For any challenge, we must be able to answer why we are doing this. This also goes for doing the financial detox challenge. We need to be able to define why we are doing such and draw out a motivation for us to continue should the challenge get tough. The advantages alone are good motivation but I am also defining one that would help me be in my toes. I am beefing up my money for the upcoming holidays that is why a financial detox would be ideal on my end.
Identify a Period
When doing a financial detox, set a period as to when to start and when to end. Probably, you won’t notice that you are not ending it at all which would be good for you and your pockets. However, to make it more urgent, adding a sense of time would be ideal. Most individuals tend to do this at the beginning of the year and even halfway to the year. As for my case, I shall be doing a two month financial detox starting today. Whatever, money I had saved within the period outside of my usual savings percentage will be redirected to my holiday expenses.
Locating Toxins
In this phase, it is important that you get to track your expenses and identify the areas where you just spend and spend. Gauge as well the expenses that were relatively expensive that perhaps a cheaper alternative would do. After identification, asses if these are expenses you can let go for the meantime. For instance, if you have been constantly dining out during lunch or dinner at this amount, perhaps during the detox process you may want to opt to pack lunch or lower that amount. You may also find no cost alternative from your usual routine. This can include walking instead of taking a cab to your work provided that it is relatively near or something that you would prefer doing.
Set a Budget
Since it is our goal to minimize expenses and even make the most of our money, it is important to stipulate just how much budget you would be allocating during the detox period. Needless to say, we will always have expenses along the way. However, if we set a budget, we can be able to define just how much money we shall have and how to divide it accordingly. You may also stipulate to simply withdraw money from your ATM once a week instead when the need arises. In my case, I would like to set 1,000 as my weekly budget. The rest of my salary minus my savings will be allocated for the goal that I set for my financial detox challenge. All other amounts that will be saved in the process in case I spend less than 1,000 will also be redirected to my goal.
Let Others Understand
When doing a financial detox as much as possible inform your family or your loved ones about this move. The reason being why is that they won’t persuade you to spend and they would back you up with the challenge. The key here is to inform them as to why would you cringe on your spending for a specific amount of time. If they are used seeing you spending before, they might be surprised on the sudden change with regards to your finances.
Discipline
For a detox to be successful and for you to be able to reap its rewards, it is important that you get to incorporate proper discipline and attitude towards it. You must be mentally ready with the challenge. There might be pitfalls and even temptations yet if you fixate your eyes to your goal and be motivated every day, overcoming such would be relatively easy.
Doing a financial detox is a good way to clean up your finances and also beef up your money. Just make sure that you are set to do it and determined to finish it. Just like any other challenges, it might prove difficult and all the more a chore. However, given the right motivation and attitude, you would surely emerge victorious. Let’s do a financial cleansing today!
P.S. To those doing the 52 Week Money Challenge and 52 Week Money Challenge Version 2, it is Week 38 already! Did you deposit the next amount yet?
P.P.S Want to know more about investing, savings, stock market and more, check out my reference here. You can download free ebooks and resources too.