Dieting and saving money have a lot in common. Lose weight, get physically healthier. Save money, get financially healthier. They are both ‘puritan’ activities that are good for you, that you ‘should’ do. And both aren’t much fun. It would be much more fun to have a milk shake whenever you want, and spend up to your credit card limit all the time. But there are long term consequences of both.
Saving money (surprise, surprise, that’s what I’m going to address) has one huge advantage over dieting. If a 200 pound man loses 20 pounds, he has to cut his caloric intake to just maintain by about 3 Chips Ahoy cookies a day. Dieting gets harder and less fun as you go. Whereas saving money gets easier. As you pay off debt, those interest charges go away giving you more money. And your savings will earn money, meaning you actually have to save less over time to get ahead.
But it has a huge disadvantage too. If you say ’heck with my diet today’ you can go to the local ice cream parlor and have a double banana split, and you might gain back half a pound. A set back, but one that can be fixed with a couple of hours at the gym. You cannot undo your diet in a day or a week. But with saving money you can say ’heck with saving money, let’s go to Hawaii’. You can spend $5,000 on that trip and undo a whole year (or more) in saving.
This is the danger with saving money. The big splurge. With credit cards you can spend a ton of money in a single day. When you are saving money keep this in mind. The splurge of tickets to the ball game is one thing. But the splurge of a really big expense can really wreck all your saving efforts and put you back to square one. Don’t let that splurge undo all your hard effort.