We’ve heard about the supposed benefits of fasting for physical health, but have you considered financial fasting to address your financial wellness?
The idea is simple: Don’t spend money during a set period of time, or in a particular expense category, such as entertainment or dining.
From the outset, financial fasting sounds easy. In practice, it can be anything but.
That’s because spending is often disconnected from the values and intentions of near-retirees. Unlike Millennials and Gen Zers, prior generations have generally had fewer qualms about purchasing products and services from companies that don’t align with their principles. The act of swiping a credit card can feel as routine and trivial as opening a door. And as Baby Boomers retire, some are tempted to treat every day like a Saturday — chockful of travel plans, reservations and shopping.
Financial fasting can put the value of a dollar back into perspective, shoring up your bank account and breaking the habit of mindless spending. By doing so, it can force you to reassess your values and reconnect with those closest to you.
In what follows, I’ll explain the many ways financial fasting can positively impact your lifestyle — and how to plan your first financial fast.
The benefits of financial fasting
Financial fasting can be a reset button — not only for your finances, but for your values, sense of purpose and even your relationships. Here are a few ways that limiting your spending can change your financial well-being for the better.
1. Pay down debt faster.
The most obvious benefit of financial fasting is that it frees up cash flow fairly quickly. But that doesn’t mean that you should simply spend all that money once you break your financial fast. Consider using that moment as an opportunity to pay down debt at an accelerated rate — especially high-interest obligations like credit card debt and car loans.
2. Break the cycle of senseless spending.
We spend for different reasons. Some people lavish their grandkids with expensive gifts, while others continually chase the latest fashion trends, no matter the cost. The problem is, many people don’t recognize why they’re purchasing certain things — and that the reasons for buying them may fall apart under scrutiny.
Buying possessions, for instance, tends to provide happiness for only a short period time, but a meaningful experience can be more rewarding over the long term.
Because financial fasting pushes the pause button on spending, it can make you think longer about why you wanted to buy something in the first place.
In time, you’ll become more adept at fulfilling those needs without spending, or realize when those impulses are not needs at all. For example, if you want to spend time with your significant other, a walk along the beach or in a park may be a better, expense-free way to do that, vs going to the movies.
3. Align your purchase decisions with your values.
Financial fasting is also an opportunity to bring your spending in line with your own personal values. Growing up, many Baby Boomers like me just went to work. We put our heads down. Spending wasn’t necessarily connected to purpose or passion but providing for ourselves or others.
This can be a time to take a page from younger generations and think about the impact of your purchase decisions. If you are passionate about social awareness and responsibility, consider the many items you purchase from large companies. Should you redirect those dollars to other businesses that may have a greater impact on your local community?
As you come out of a financial fast, you’ll find yourself at a crossroads, asking: Do I continue spending the way I have in the past, or try to be the change I want to see in the world?
4. Create a space to reconnect in our relationships.
Some instinctually feel that in order to do something, you need to spend something. But when it comes to our relationships, quality time is what matters most. Some types of spending can disconnect you from those important connections, instead of creating space for you to engage with your loved ones in a meaningful way.
For example, some leisure activities — like attending plays, visiting theme parks or going to concerts — don’t actually require people to talk to each other. And costly gifts are hardly a substitute for personal connection. Unfortunately, many of our spending habits, while well-meaning and born out of kindness, fail to deepen our relationships.
Planning free activities, on the other hand, requires you to creatively collaborate with your family members and friends, fostering a sense of spontaneity and adventure. And many of the activities that don’t involve spending require us to remain in the moment, listen to others respectfully and appreciate their presence.
How to plan a financial fast
Financial fasting can be as stringent as abstaining from spending for a week, or as measured as skipping lunch during the workweek. What’s most important to recognize is that financial fasting can be accomplished in degrees to accommodate your comfort level and needs.
- Go through your budget. Start by identifying the areas where you’re spending the most — eating out, going to movies — and the days in which you’re spending the most. This will help you target your fast and also give you ideas about how to occupy your time during a fast. Someone who regularly goes to an art museum on Sunday, for example, may instead choose to attend free art exhibitions in the area.
- Plan to start small. Just like physical fasting, financial fasting is a muscle. Begin by cutting out expenses that are easy to track. That regular Friday date night at the local bistro could turn into dinner and a movie at home, for instance. Once you’ve mastered those smaller targets, then you can take a stab at an entire day without spending and, ultimately, even an entire week.
- Don’t expect an overnight change. At first, you may feel as if you’re needlessly depriving yourself. But after fasting for a while, you’ll start to come out of each fast with a renewed appreciation for what money is — its purpose, significance and impact on the lives of others. That sense of connection will change how you spend that first dollar coming out of a fast.
Reshaping your relationship with money
Once you’ve incorporated financial fasting into your daily life, you’ll realize how much the world has to offer outside of indiscriminate spending. It can help refocus your financial priorities, reel in addictive spending habits and even inspire you to financially support causes you believe in.
The difficulties associated with financial fasting are not unsubstantial — but the joys it can bring to your life, and those around you, are well worth the effort.
This article has been obtained and is provided as a courtesy by Stephen B. Dunbar III, JD, CLU, Executive Vice President of the Georgia Alabama Gulf Coast Branch of Equitable Advisors, LLC. Equitable Advisors and its associates and affiliates make no representation as to the accuracy or completeness of this information, nor do they endorse, approve, or make any representations as to the accuracy, completeness, or appropriateness of any part of any content linked to from this article. You should consult your own financial professional regarding your particular circumstances.
Stephen Dunbar offers securities through Equitable Advisors, LLC (NY, NY 212-314-4600), member FINRA, SIPC (Equitable Financial Advisors in MI & TN), offers investment advisory products and services through Equitable Advisors, LLC, an SEC-registered investment advisor, and offers annuity and insurance products through Equitable Network, LLC (Equitable Network Insurance Agency of California, LLC; Equitable Network Insurance Agency of Utah, LLC; Equitable Network of Puerto Rico, Inc.). Not all financial professionals are duly registered and licensed in all states to offer all products and services. GE-5934902.1(09/23)(exp.09/25)