When I was 19 years old, I weighed 200 pounds.  At 5′ 7″ this was clearly an unhealthy weight for me.

By the end of the summer I was down to 148 pounds.

How did I do it?  I ate less, walked everywhere, and drank tons of water.

But returning to college meant pizza was a quick phone call away.  Beer, the staple of college kids everywhere, was always close at hand.  And dining hall fare wasn’t exactly health food, either.  As for exercise, let’s not even talk about it.

Ultimately, I regained about 30 pounds.  I then did what most people do – I went on a diet to lose the weight.

Once again my efforts paid off, but only for a short time.

Years later, I see the same problem happening with my clients and the way they handle money. It’s a vicious cycle.

Do You Treat Your Finances The Same Way?

When you’re neck-deep in debt, the first thing you do is cut your expenses to the bone in an effort to free up money to pay those debts off.

You stop eating out, cut cable and stop buying coffee on the way to work.

But you also stop doing the bare essentials – like buying new socks and underwear.

This is the standard money diet.

You can spot someone on a money diet from a mile away.  Their car is running on treadless tires, they haven’t gotten a haircut in ages, and their coat is fraying at the seams.

Though it may help them get out of debt, it’s only a matter of time before they’re back in the red.

The Yo-Yo Effect

On a weight-loss diet, you get to the point where you’ve starved yourself for so long that all you want to do is bury your head in a loaf of bread and a stick of butter (for me, it’s not chocolate or fried food) and stay there until it’s all gone.

That’s the yo-yo effect, and the same principle applies to your personal finances.

You treat yourself like a second-class citizen in an effort to pay off the debts. When the balances don’t decline as much as you’d like, so you throw up your hands and binge, undoing any of the benefits you’ve attained during your money diet.

I deserve it, you think.  Especially after all that deprivation.  I work so hard, it’s time for a treat!

No wonder money diets work as well as weight loss ones.

Change Your Life, Change Your Financial Situation

You need to get off the diet bandwagon.  There are a few ways to do this.

The first option is to work more, spend less, and use the excess to pay off the debt.  If you can do that, go for it.  Just make sure your quest for reduced spending doesn’t include deprivation or it’s not going to last.

The second option is to stop the money leaks, those spare dollars that come out of your wallet without being accounted for.

Coffee, snacks at the machine, newspapers and the like are all the beneficiaries of your money leak.  Plug the hole, account for the money, and figure out how to find less-expensive alternatives to get the same benefits.

Your third option is to consider credit counseling,  debt settlement or bankruptcy.  There are good providers and bad in each category, and all options require some deep thinking before you opt for one over the other.

Done correctly, any debt relief option can stop the cycle of financial missteps and help you get on the right track.

Whatever you do, put down the yo-yo.