What on earth is financial detox? I know you might have probably heard of body detoxing where you get to eat certain foods only, as you detoxify your body of accumulated toxins for a given time.
Here we are going to bring that concept and apply it to your finances and see how of a benefit it can be towards being financially healthy.
There is a right way of detoxing and a wrong one indeed. Here we are going to highlight both the right and the wrong so that you can make an educated choice when you get to do your financial detox.
The concept behind this whole process is to cut out some wasteful money routines in any given period like a week or so and employ that money into useful use.
Wrong: Jumping into the idea without having a clue where your money goes after you bring it home
This is a numbers game. You have to know exactly what you bring in each month and what is getting out. The more exact the number, the better are your chances to adopt the financial detox concept since your reward will be clearly spelled out in a number
Right:Have your ledger going for about three months so that you can deduce your money expenditure habits and also track the fixed bills like your rent and flexible bills like your water bill if it’s dependent on your consumption. This is where you are going to chose your culprit to cut back at during your detoxification period
Wrong: Binge eating before a body detox has being noted to disqualify any benefits that are accumulated during the detoxing period. The notion of eating your favorite junk food before or hoarding it for later doesn’t bring about productive change. This too goes for your finances…overspending before or after the detox period might get you to unpleasant places
Right: After gathering your financial data, pay for the bills that are due on the detox time frame to avoid paying for late fees and come with an alternative for cutting back. As we know, driving a car costs between $.50 to $1.00 each mile. If driving was one of your culprits, get the bike dusted or buy a bus ticket for the week or if your neighbor goes the same direction to work, it’s time you guys started a car pool and of course you can always trade places. If you drop by Starbucks each morning, grab yourself a coffee maker for $10 and save yourself that $20 a week on coffee or eating out
Wrong: Using all the money saved during the detox for depreciating things like food, gadgets or upgrades to more expensive living is not so wise
Right:Take that money and invest it where the Return On Investment (ROI) is ideal. Put the money in a money market where it can grow as you save for other things like a down payment for a house, or college fund for yourself or children. And if by any chance you have accumulated debt, this money will be ideal to pay it off too. This is where you totally see the reward of the financial detox
Now that you’ve seen there’s a way to stay for a week or so without spending money and redirecting that money to useful places, you can choose to do it several times in a year. it could be 1x, 5x, or 10x each equating to a week and so long your finances get healthier, you get to make the call
Let me know if you have had any experience with financial detoxing or whether you are planning to do one. All the best and remember it’s about having fun. Life is a game and if you got the rules, you can play at your own liking