If you're hoping to come up with extra cash to put toward a big goal, there's no need to go cold turkey on spending. Take inspiration from a health trend and try an intermittent fast — for your finances.
Temporarily cutting optional expenses like dining out or your morning coffee can help you see which indulgences you really miss and want to factor back into your budget, and which ones you don't mind letting go.
"Think about what your intention for doing this is," says Pamela Capalad, a certified financial planner and founder of Brunch and Budget in New York City. "We can all do anything for a short amount of time, but if you understand the reason behind why you are choosing to go on this financial fast and know what you hope to uncover, that will help you get through it."
Here's how to get started.
Start by taking a close look at your more expensive indulgences by combing through your recent bank statements. You might be surprised at what you're spending your money on and how small purchases add up.
More than a quarter of Americans (28%) point to takeout and food delivery as a monthly expense on which they routinely spend more than $200, according to a July CNBC Invest in You survey of over 2,800 American adults. Others reported spending that much on alcohol (10%), tobacco (8%), live entertainment and sporting events (7%), takeout coffee (5%), gambling (4%), and ride-sharing services (3%).
Once you know what you're spending a lot of your money on, you can decide what to cut out for your fast.
Video by Courtney Stith
Going cold turkey and cutting out every single purchase that brings you joy isn't necessarily a long-term solution. "If you deprive yourself completely in all areas, you're destined to fail," Chris Browning of Popcorn Finance told Grow earlier this year.
But doing so temporarily can help you figure out how much of those expenses are true wants versus habits or impulse buys you could easily scale back.
"We do spend a lot of money on things that don't necessarily align with our values, but we do it out of convenience, peer pressure, or exhaustion," says Capalad. For example, in the CNBC survey, more people said they would willingly give up restaurant food than streaming television or an Amazon Prime membership.
"The thing to keep in mind is that we have a finite amount of willpower. If we try and deny ourselves the things we enjoy just because someone said we should or shouldn't keep buying it, it won't work," says Capalad. "To some, a latte is a waste of money, but maybe to you, you need it to get through the work day and be more productive."
Use what you discover in your brief financial fasts to set a realistic goal for the year ahead, to cut back on those one or two variable expenses that you can live without.
"It's more about being mindful of how these purchases actually affect you and why you actually want to make these purchases," says Capalad. "It's not about how many lattes you did or didn't buy — it's understanding the true intention behind this financial fast, and it's an experiment for you to figure out what your values and habits are."
More from Grow: