Deprivation diets don’t work in the long term. The same can be said for deprivation-based financial management. Eliminating all the fun things you can do with money is a surefire way to guarantee failure.
In his excellent book “Mindless Eating, Why We Eat More Than We Think,” author Brian Wansink explains why most diets don’t work. In fact, he says, 95% of people who lose weight on a diet gain it all back, and then some!
Wansink explains that when you go on a deprivation diet, your body fights back. Your brain and your environment collaborate to all but ensure failure despite your best efforts. When your body gets too little food, it goes into conservation mode. This is genetic hard-wiring that makes it tougher to burn calories. While this trait may have come in handy when people lived in caves, it spells failure for dieters.
Sure, deprivation diets can work temporarily. Brides preparing for weddings rely on this short-term effect, as do celebrities who want to fit into designer gowns for awards shows. But the more we deny ourselves, the more we crave what we deny.
Result? According to Bloomberg, the share of the population classified as obese has ballooned from 14% in 1960 to 36% in 2010. That’s a problem. Here’s another: CBS Moneywatch reports that 26% of people ages 50-54 and 14% of those over 65 have no savings. Boosting savings is critical, but just as you can’t live long-term on a starvation diet, you can’t realistically expect to build up a nest egg for tomorrow by starving yourself financially today.
Both of these problems need solutions. And as it turns out, many of the solutions overlap.
Wansink offers this about weight management: “If we don’t feel deprived, we can be successful.” This means going “mindless” with your dietary habits. Make minor changes that require no further decision making. They should be small, fit into your current habits and barely change your lifestyle.
For example, obesity researchers James Hill and John Peters say cutting just 100 calories a day would prevent weight gain in most people. Or you could leave your calorie intake alone and add 2,000 steps to your day’s routine for the same effect.
Small changes are the ticket for saving, too. Pick a low-cost target date fund for your 401(k) and then leave it alone. Go “mindless.” Juggling too many choices often leads to no choice at all.
Start out by putting away 5% of your income. This will make a small dent in your check but will provide tremendous long-term benefits. Then arrange for your contributions to increase by just 1% each year. The annual changes will be all but invisible, but at the end of a decade, you will be saving 15% of you earn!
Put your fixed expenses on a credit card with a cash-back option and arrange for the balance to be paid in full each month from your checking account. This way, you will never miss a bill and will have no credit card debt — and could be be getting paid hundreds of dollars a year to use your credit card!
Although “mindless” investing sounds dangerous, the alternative is more so. Don’t think too much, keep it simple and limit the changes to your lifestyle, and things have a good chance of working out. Depriving yourself can only work for so long before you go back to your bad habits — or worse. Save the beet soup diet for someone else!
This article was first published on Nerdwallet.