I recently read “The Financial Diet,” a book by Chelsea Fagan, co-founder of the popular personal finance blog of the same name. The subtitle is, “A Total Beginner’s Guide to Getting Good with Money.”
Although it’s intended for beginners, it has a wealth of tips and suggestions. I found that I learned a lot, going beyond just those basics.
Like the blog, it’s written by women for women, although certainly, any gender could learn something from this book. It’s got a millennial tone, which makes it funny and entertaining to read. This is no dry personal finance book.
Here are five things I learned from reading The Financial Diet:
1. Your Money Should Be Visible … and Beautiful
If you don’t know how much money you have then how can you possibly be responsible with it? Of course, this should be obvious. And yet, many of us avoid looking at our money. Even if you’ve got apps and tools to help you track your funds, you might be able to go a step further.
The Financial Diet suggests that you hang your budget over your desk where you will see it every single day. Use a visual design that appeals to you. You should feel some kind of joy when you look at this, not a sense of dread. The more open and attractive you make your financial state, the easier it will be to work with it.
2. You Can Trust Your Gut
This is one of my favorite pieces of advice that comes out of The Financial Diet. This book is filled with interviews with smart, money-savvy people (mostly women.) The advice comes from Cait Flanders, co-host of the “Budgets and Cents” podcast. I like it because it goes against what you usually hear about money.
We tend to think about money as though it’s just a head thing. If you get really logical and learn the math, then you can be good with money. While there’s some truth to that, money is also highly emotional. Flanders points out that you know deep inside your gut when you’re making bad money choices. Tune in to your body, make space in your life for reflection, and listen to your gut when it comes to spending and saving money.
3. Measure Your Wealth in Freedom, Not Money
We tend to adapt to whatever income we have. While it is certainly nice to make more money, beyond a certain point it doesn’t make us any happier. Therefore, you’ll have a better quality of life if you measure your wealth in terms of your freedom. Chelsea Fagan says,
“I’ve been thinking in terms of the value that I get out of an hour spent, and how I can maximize that value per hour so that I get more done in a smaller amount of time and still have more freedom to pursue both the things I love and the things that help me grow within the context of my professional life.”
Within this same section, she also talks smartly about how if you have multiple interests, hobbies, and income-streams, then you won’t define yourself by one limiting role. Therefore, you’ll have the opportunity to increase happiness.
4. Food Matters on a Financial Diet
There’s an entire chapter of The Financial Diet devoted to food. It’s all about how to eat healthy and satisfying meals at home. This just isn’t something that you see in a typical personal finance book. However, intuitively, I find that it naturally fits.
First of all, food is social. Therefore, we often spend a lot of money going out to eat with others. However, if we reduce the going out and invite people over more often then we can save money on those meals.
Secondly, food is emotional. If you’re stressed or upset, then you’re likely to go spend money on indulgent, expensive, and not-so-good for you foods. However, if you’ve established a repertoire of affordable, easy-to-make feel-good foods then you won’t do this so often.
Most importantly, this section of The Financial Diet highlights a truth that many people want to ignore. We have to eat every day, several times per day. If we don’t master this part of our lives, it affects us in every way, including our finances.
5. Talking About Money Improves Relationships
I suppose I didn’t learn this one from the book. I have a psychology background and have thought a lot about money and relationships. However, The Financial Diet addresses it in broad new ways that got me thinking about it all from a fresh perspective. Specifically, it’s not just about how finances can impact your marriage or your family. It also covers how important it is to talk about money with your friends.
It’s still socially taboo to do this. In fact, the book cites someone from Cosmo who notes that most women would rather talk about their most private sexual urges than their finances. However, the more we open up and have these conversations, the better off we all are. Our relationships become more open, honest, and authentic. We can go deeper than the surface. If you’re not talking about money with your friends, you’re missing out on a valuable opportunity for growth.
If you’re interested in checking it out, you can buy a copy on Amazon.
Have you read The Financial Diet? What was your biggest takeaway?