233 | Rewind: Crash Money Dieting

Don’t approach your finances in the same ineffective way many people approach losing weight—depriving yourself to get to your goals as quickly as possible.

That approach often ends up setting people further back and keeping them from achieving their goals.

In this rewind episode, let’s talk about why the crash money diet approach isn’t sustainable and what to do instead.

• • my controversial LinkedIn post about buying luxury designer shoes while in debt
  • the crash diet approach to financial goals
  • why this approach is unsustainable
  • an example of one lawyer’s crash money diet efforts to pay off her credit card
  • how the crash money diet approach keeps you in a cycle of never truly achieving your goals
  • how to approach your money instead

My controversial LinkedIn post

You’re listening to Personal Finance for Lawyers. I’m Rho Thomas, and as a busy wife, mom, and former Biglaw associate, I know all too well the tension between the culture of the legal profession and pretty much everything else you want to do in life. That’s why each week, I’m bringing you the information and tools you need to improve your money mindset and manage your money to create true wealth. Because ultimately, it’s not about the money. It’s about the freedom and flexibility the money affords. By the way, if you’re a lawyer who’s struggling with debt, you’re probably making at least one of five common mistakes. Grab my free guide on how to correct those mistakes and finally get out of debt for good. Head on over to rhothomas.com/guide. That’s G-U-I-D-E.

Hey friend. Welcome back to the show. I hope you’re doing well and having an amazing day so far. Today I am bringing you a rewind episode. This episode is a really good explanation of the way that I think about approaching your money goals, approaching managing your money versus the way that a lot of people approach it. If you and I are not connected on LinkedIn, go connect with me over there. I’m Rho Thomas, but I shared a post about how I bought a pair of designer shoes while my husband and I were paying off $678,000 of debt. And the post got a lot of attention. There were a lot of people who were like, Yes, I understand this concept of balance with managing your money, but there were a lot of other people who felt like it was irresponsible to make that kind of purchase when we had that kind of debt. And so this episode explains that approach more so that you understand the importance of maintaining balance while you are paying off your debt, and why the approach that people typically take to their personal finances and their goals doesn’t work. So I hope that this episode is helpful for you. Please enjoy this rewind episode, crash money dieting.

So you may be familiar with crash dieting. Basically it’s when people cut out a bunch of foods and try to lose weight really quickly and it’s all about depriving themselves only eating these really healthy things are only eating this little bit of food to try to get to the goal quickly. I see this same kind of behavior commonly with lawyers when they want to pay off debt or they want to get to a certain savings goal. So they’ll cut out all these things and try to buckle down to get to the goal really quickly. The issue though, in both contexts, is it’s not sustainable. So with Crash dieting, people are cutting out all the things and they’re living on like, you know, strawberries and water and starving, and then when they finally hit their goal weight, it’s like, well, I’m done with that. I don’t have to do that anymore. But then they’ll go back to how they were eating before because the way that they were eating throughout the crash diet wasn’t sustainable, and then they start putting the weight back on and it becomes this yo yo cycle of now I’m at this weight that I don’t want to be at. So let me do this crash diet again, to get back down to where I was. I was just speaking with a lawyer who was describing the same thing with her finances. So she was telling me about how she will deprive herself and be really focused and pay off her credit card. But then she gets to that goal and it’s like, I’m done with that I hit that goal and now I can let loose and she said that she would start making what she calls extreme purchases, and then she would rack up the credit card again. And so it’s this back and forth cycle, this yo yo cycle that she’s basically spending that she’s basically staying in the same place because she pays down the card and runs it back up again and then pays it down again and then runs it back up again. And so she feels like she’s taking one step forward and two steps back. And because of the cycle that she’s in she hasn’t been able to move on to her other financial goals like paying down her student loans. So the way that she’s been approaching her finances, although it might seem like it’s working in the moment because she’s making that progress on her credit card so quickly. It’s actually hurting her because it’s keeping her stuck in this cycle where she keeps working on the same goal over and over. So every time she pays off the credit card, it gives her this illusion right the sense of accomplishment the relief that comes along with improving her finances, but in reality, she’s not moving forward. And so she’s not actually improving her finances at all. She’s staying in the same place. So the thing with this crash diet approach to your finances is it’s really discouraging. It feels great when you hit your goal quickly but the journey to the goal feels terrible all the deprivation all that can’t have this I can’t do that. I’m on a budget. All of that language, all of that denying yourself feels bad. And then on top of that, you look up and you find yourself back in the same place that you thought you had already escaped from because the way that you got to that goal wasn’t sustainable. And so you go back to the behavior that you were doing before you revert back to how you were managing your finances before and then you end up back in the same place. So here’s what I want you to do. When you’re making a plan to achieve your financial goals. I don’t want you to go to deprivation. Don’t look at it from that place. Instead, think about how can I enjoy life while still achieving those goals? That’s the key. It’s both. So it’s not 100% about enjoying life and YOLO and I’ve got this money and so let me spend it right. You don’t want to do that. But you also don’t want to go to hoard all the money and save everything and scrimp and pay off as much as I can as quickly as possible and don’t spend on anything but necessities. You don’t want to do either of those extremes. You want to figure out how to incorporate both of those into your money management. It’s both and when that’s your plan. When your plan is balanced. It’s not all the way to to spend it all figure it out later, or just cut out all of these unnecessary expenses, cut out all of the enjoyment and only spend on things that I absolutely need to put everything else to work paying off my credit card or paying off my student loans or saving. When it’s the balance then you’re actually going to keep up with it. You’re going to keep going even once you’ve paid off the credit card that you’re working on or you’ve saved to whatever amount you want, where you’ve hit whatever goal you have, like you’re not going to feel like whew, now I can let off now. You know it’s a relief. Now I can do the things that I actually wanted to be doing all this time because you’re not depriving yourself of everything. Along the way. You’re approaching the goal from a more balanced place. And so because you don’t ever feel deprived in that way, then you don’t go and splurge and completely wipe out all of the progress that you made in getting to the goal. So don’t put off all the things that you love until you hit your goals. Ask yourself how you can do both and develop an execute a plan a balanced plan. That allows you to do both and when you approach your goals in that way, you’ll actually stick with the plan long enough to achieve the goals and you’ll have a much better experience while you do.

All right, I hope you enjoyed that episode and you understand the importance of balance and achieving your financial goals. And listen, if one of your financial goals is getting out of debt, make sure you check out my free guide. I share five common mistakes that lawyers make when they’re getting out of debt and how to correct them. So head to Rho thomas.com/guide to get your copy. All right, that is it for this week’s episode. Please take a second and share this episode with a friend or two. That is the best way to get this information out to more people so that we can share this information and help more lawyers manage their money better. And as always, I appreciate your support. As we close out, friend, I pray that you take the information you learn here, apply it in your life and open up to the realization that wealth is available to you. As you do that consistently, week after week, you’ll continue to take steps to regain control of your time, build wealth and live the life of freedom and choice you deserve. Talk to you later.