If you've heard of the 5:2 weight loss diet then you've probably heard that it can be a pretty successful. Well we want to show you how you can use it when it comes to your finances, one area where you'd really rather not be shedding the pounds.
It takes the principle of the traditional 5:2 diet, where you eat normally for five days and fast for two and applies it to your spending, so you end up putting the money you save on your fasting days towards your savings.
If you're anything like me then the sound of a budget sends shivers down your spine, and a strict diet can trigger a similar reaction, but there's a reason why this has worked for so many and can be easily transferred to your finances.
Why does it work?
The 5:2 financial diet works because it clearly defines when you can and can't spend, and how long each period lasts.
So, if you're the sort of person who works better with some rules and structure in place then this could be one for you.
It's also a dynamic alternative to the usual dull, sustained budgeting option. For many, this 'binge-purge' approach makes financial goals more achievable because it's only for a limited time. Saying to yourself, "it's just today, back to normal tomorrow", is much easier than trying to sustain a long-term strict budget. Your non-fasting days, whilst not an excuse to blow your money, can feel like you're not even budgeting at all.
There are three approaches to the 5:2 diet as a money diet...
The True 5:2
If you're a budgeting beginner then this is the simplest option to ease yourself in. You just treat the budget like the diet, you spend normally for five days, and 'fast' for two.
This is an option that was tried and tested successfully by many of us at Neyber. With just two days to fast for, it's quite easy to plan ahead so that not spending seems like a doddle.
To find out how much you save on each of your fasting days, calculate your monthly expenses and divide what's left by the amount of days in the month and then put this amount aside twice a week on your fasting days and watch the savings mount up.
The New 5:2
This version is for when you're a budgeting pro but need help in other areas. On your two fasting days, instead of just fasting, try and make an active and positive change for your finances. For example, find a better energy deal or cheaper phone contract that could potentially save you hundreds of pounds over the year.
This will help you to make the most out of the money you're saving and get rid of those unnecessary spends.
The Reverse 5:2
This is for budgeters who really like a challenge. If you want to do a bit of an overhaul then don't spend for five days of the week and only spend for two.
To do this successfully you have to be organised. You'll need to plan your meals, travel and other essential activities that involve spending money so you can go about your business without spending.
So, make a weekly meal-planner and do a full week's shop in advance, buying all you need in bulk to save more. This enables you to be able to prepare your meals on the five days when you're avoiding spending and stock up on snacks and drinks to take out with you to avoid spending pit stops. You can cook extra and batch up portions to freeze for future use and use leftovers for lunch the next day.
You could walk or cycle to work, or pre-pay for your travel cards if you travel on public transport. Alternatively, if you drive then top up your tank so you have enough petrol for non-spending days.
Avoid online browsing which can lead to random spending. If you habitually browse online shopping sites, you'll find it a painful temptation when you're trying to avoid spending, so limit it to once a month when you spend 10% of your monthly savings as a motivating treat to continue with the reverse 5:2.
Working this intensely on your financial fitness will see the savings accelerate quickly and regularly. You'll be able to regularly check your progress and see the savings mount up and this will hopefully be a great motivation to keep going.
Top tips for cutting costs and how to stick to it
We've all been on a shopping trip and come home with stuff we didn't plan to buy, so be disciplined and only make good value purchases of what you need when you need it.
To start treating your finances with the love and care they deserve and to reap the rewards follow and stick to these top tips:-
Use and stick to a shopping list based on a meal planner when grocery shopping.
Haggle whenever possible with broadband, mobile phone contracts and more.
Freecycle for stuff you need and sell unwanted items on selling sites like eBay.
Get cashback on bank account spending and money for switching bank accounts.
Use voucher codes. Whenever you have a new expense, see if you can get it cheaper using vouchers and special offers.
Take advantage of your employee benefit portal and the discounts available.
What to do with savings?
Your hard work and ongoing savings can be used for any purpose, whether it's getting out of debt, or meeeting a long-term savings goal like a deposit on a property or new car. Just have a think and get to know what you're saving for, and how to get there.
Find out more
Interested in the 5:2 diet for your finances? Give it a try and let us know how it goes. Emily at Neyber has also tried it, so read further and compare your experiences with Emily's.