Cold Turkey vs. The Slow and Gradual Approach

tortoise and hare

When you’re ready to improve your financial life, how should you go about it? Do you immediately cease all unnecessary spending, slash expenses to the bone, and use all of your extra money to pay down debt? Or do you go about it gradually, making a couple of small changes at first and then adding on as you go? Which way gives you the best chance of success? There are drawbacks and merits to both approaches but here are some thoughts to get you started.

When you approach financial change aggressively, you experience an instant rush of success. When you slash spending and start throwing all extra money into savings or against your debt, you get to see those balances increase/decrease at a rapid rate. You may feel inspired to take on another job, organize all of your paperwork in one weekend, or sell everything in the house that’s not nailed down.

Quick success and visible change can give you the motivation to keep going. It can also be a way of getting the pain over with in a shorter period of time. If you don’t like to suffer long-term, doing everything in a short burst may be painful, but more bearable than dragging it out. If you’re really struggling, quick and aggressive change may be the only thing standing between you and disaster.

On the other hand, making massive, restrictive changes can lead to rebellion. You may start to resent all the restrictions on your life. If you’ve eliminated all of your fun spending, you may go on a spending binge out of sheer frustration. If you take on extra jobs, you may get so stressed and tired that you decide to just give up altogether. If you’ve sold a lot of things in a short period of time, you may come to regret those hasty decisions. Your account balances might be looking better, but the rest of your life may be in shambles.

If you decide to tackle financial change slowly, you won’t see your debts decrease quickly, or see those account balances jump up, but you may avoid making careless mistakes. You may also avoid the backlash that comes with making too many changes too quickly. If you take things one step at a time, you give yourself a chance to adjust to change gradually. This may be more comfortable than wholesale change.

Going slowly may mean, though, that you never get where you’re trying to go. When you go slowly, it may be easier to cheat. You may find yourself saying, “Well, I can save tomorrow, after I buy this fun thing today.” Being gentle with yourself may give you too many excuses and “outs” that prevent you from doing what you need to do. It may be hard to maintain focus over a period of time. And if you don’t address the underlying problems in your financial life, you may find yourself fixing one issue while another one just gets bigger.

There is a third approach and that is to aim for balance. Maybe you want to be aggressive for a couple of months and then ease off for a month so that you can have some fun. Or maybe you make a lot of changes, but not as many as you could make all at once. That will leave you with some wiggle room to have a little fun. Maybe you make a few big changes and mix in some smaller ones, instead of doing all of the hard things at once.

As with anything in personal finance, how you choose to go about financial change is a personal choice. You have to know yourself and which method is likely to work best for you. Some people do well under aggressive, harsh restrictions and others flip out. Some people have no trouble sticking with something over the long haul and others need to get everything over with as quickly as possible. And some people need a balance. Be honest with yourself about how you function best and then choose the approach for you. Remember that no matter how you go about it, the important thing is that you do it.

(Photo courtesy of Dushan and Miae)

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4 Responses to Cold Turkey vs. The Slow and Gradual Approach

  1. I agree that it would be a personal decision and I do agree that if one takes the slow route they may be apt to make excuses. The way I look at it is if someone risks losing the roof over their head and they struggle to put food on the table then it’s time to suck it up and do what you have to do. I’m sure that means more than a few beers at the pub with mates or shopping at the mall. There are plenty of ways to smile in life and it doesn’t have to involve money. It’s not easy, no one said it would be but life throws us curve balls and we need to learn to balance our way through thick and thin. If $5 is all that is in the budget for entertainment be creative, find free things to do or frugal ways to spend the money. Personality plays a big role as does commitment if one is in a relationship. It’s a tough question to answer but only the person who needs to answer can make that call. Great post.

  2. Karyn S says:

    I think going cold turkey only works for when you have an unhealthy addiction. What you wrote in terms of finding a balance financially makes sense.

  3. Mark says:

    A method that works good for me is:

    Track each one of your expenses and you will have a clear idea of where your money goes.

    There are a lot of “hidden stupid expenses”, and the trick is… you need to know where they are to reduce them and save more money!

  4. Minny says:

    We discovered the endowment insurance would not pay the mortgage we went into instant ultra flugality. As the time went and we learnt more we saved more and more money. We treated it as a great and exciting challenge the payoff being the savings we discovered that we could make.

    Result, we more than covered out mortgage and saved enough to make our dream house in our chosen retirement city a reality.

    I will never regret the cold turkey approach as it worked very well for me.

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