Record Of Special Events: Are You Just on a Recession Diet?

If you are a chronic dieter, you know that long term, diets don’t work. You do really well for a while, pushing to lose the weight, but once you reach your goal, you gleefully go back to the habits that got you in trouble in the first place. I know. I’ve been there. In order for a diet to work, it has to be more than a, well, diet. It has to be a healthy lifestyle change. And that sometimes means that you make more gradual changes that you can live with, developing long term habits that stick with you long after you have reached your goals.

The recent recession has prompted many to save more and spend less. However, the worry is that this is more of a “recession diet”, rather than a long term lifestyle change. Which means that as the economy comes back online, people will slip back into their old ways. If you don’t want this to be you, the key is to look at things you have been doing to create a better financial foundation during this recession and hold on to them. Here are two of the major concerns associated with the end to a recession diet, and how you can combat them:

#1: Spending More

As signs of economic recovery emerge, it is likely that you will feel more confident. This means that you could start feeling more comfortable with spending more money again. The fact that this is the holiday season only reinforces the idea of opening one’s wallet a little wider. It doesn’t mean that you can’t do a little extra spending on occasion, but you do need to keep the impulse under control. Below are some suggestions for keeping your spending under control as the economy improves:

Set aside “splurge” money. Once that money is gone for the month, it’s gone.
Avoid places that are more tempting to you. Once your splurge money is gone, stay away from temptation and focus on less expensive excursions.
Think of what you could do with the money instead. Consider how you could grow the money for retirement, help your child pay for college or going on a nice trip in six months. Set goals so that the “extra” money you feel comfortable spending has a purpose.

#2: Saving Less

With high unemployment, less hours and open enrollment for health insurance reminding you that things are a bit tight, it’s easier to remember to save. But as the economy improves and you feel more financially secure, you might be tempted to put a little less away. In order to avoid this, consider making your savings automatic. Have a portion of your paycheck automatically deposited into a savings and/or retirement account. That way, the money is not even considered as part of your discretionary funds.

Realize that economic cycles are natural. Every time there is a boom, it is followed by a bust. Things can’t go on growing forever. Remind yourself of this recession, and prepare for the next. You don’t have to stop enjoying yourself, but you shouldn’t abandon the good habits you have started developing. Make the shift to a lifestyle of good financial choices, and you will find that when the next recession hits, you won’t be as susceptible to the money problems that come with it.

Who knows, you may not even need to go on a recession diet next time.

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