Crash diets are extreme and unhealthy, but the financial version might actually make sense.
Scott Terrio recommends them to his clients sometimes, as manager of consumer insolvency for Hoyes, Michalos & Associates Licensed Insolvency Trustees. The firm helps people filing for bankruptcy, or making deals to avoid it, with offices across Ontario.
Terrio sees clients with a lot of debt, but if it鈥檚 a relatively modest amount 鈥� maybe $5,000 or $10,000 or so 鈥� he tells them to try an 鈥渆xtreme austerity program.鈥�
The premise is simple: Aside from rent, groceries and internet, cut absolutely all other spending, and live like a monk. Commit to this lifestyle for a handful of months, or more if you can; the short timespan will make it more tolerable, Terrio said.
No takeout, no Uber, cancel your subscriptions, get a cheap phone plan, tell your friends you can鈥檛 go out to restaurants or bars, he said. Pick the winter months when you鈥檙e not tempted by summer patios.
After a stint with the crash diet, you can take a break and return to normal life. If you aren't able to tackle all of your debt in one go, you can resume the crash diet later on in the year to reduce it further or eliminate it for good.
On this plan, you can gain more ground on your debt in a much shorter time 鈥� especially with high-interest debts such as credit cards. Extreme austerity can save years on your repayment plan, Terrio said.
鈥淧utting $300 down on your credit card is [nothing],鈥� he said. 鈥淏ut putting $700 for a few months is going to help you.鈥�
鈥淭he downside is that it sucks, but you鈥檙e on a mission,鈥� he added. 鈥淲hen you do all this, you will have taken what is a blip in your life of 12 months and fixed the problems that would have otherwise taken up 20 years of your life.鈥�
It鈥檚 definitely not for everyone, Terrio said, but it鈥檚 very effective for those with discipline and financial goals.
Robin Taub, CPA and author of The Wisest Investment, sees the potential in a hard reset.
A short-term crash diet can change habits and help 鈥渟ubscription creep,鈥� when you lose track of smaller monthly recurring payments, she said.
Taub likened it to a recent experience where her credit card was compromised and she was issued a new card 鈥� all those websites and subscriptions didn鈥檛 have her new card info, so she found herself updating them all individually.
鈥淚 was just reminded: Do I really want to give them my new credit card number and keep paying for this?鈥� The answer was often no, Taub said.
鈥淭hey really do add up without you noticing 鈥� it becomes a bit of a habit, and you鈥檙e not as mindful of your spending. I think the idea [of a crash diet] is to regain that awareness and mindfulness around your spending.鈥�
Frugality trends with similar premises have been circulating on social media for years, Taub pointed out.
Loud budgeting involves telling everyone you are on a strict financial plan so you don鈥檛 feel pressured to spend money socially, while 鈥淣o Buy 2025鈥� is a movement to make it through the year without buying any non-essential items. Cutting spending is also about sustainability, Taub said, which resonates with younger people. This demographic is also just simply feeling the pinch of the cost of living.
鈥淎 lot of young people are feeling this way,鈥� Taub said. 鈥淢y kids say to me: Every time they walk out the door, it costs them $100, whether they鈥檙e buying groceries or trying to do something fun with their friends. It鈥檚 just really expensive these days.鈥�
Sean Cooper made the news for his extreme frugality 鈥� the Toronto-based mortgage broker and author of Burn Your Mortgage went viral for paying down his mortgage in just three years. Cooper owned his home outright at age 30.
A major part of his financial plan was collecting rent: He lived in the basement of his home and rented out the rest of the property. But in addition to a strict budget, Cooper picked up side jobs as well.
鈥淓arning an extra source of income is great,鈥� he said. 鈥淭here are so many different opportunities to earn income these days. So it鈥檚 looking at a skill and how you can make money from it, whether it鈥檚 making YouTube videos or freelance writing or freelance web design, even pet sitting, dog walking 鈥� just find something that you enjoy and try to monetize it.鈥�
Make it hard to spend money, Cooper advised. Don鈥檛 bring your credit card when you go out, take your credit card info off your phone, delete the info from online shopping sites, apps, and subscriptions.
鈥淒o you really need five streaming services?鈥� Cooper said. 鈥淭here鈥檚 so many free streaming services you can watch.鈥�
After the crash diet, you might have found new useful habits, free hobbies, or the realization some past spending wasn鈥檛 serving you.
Another perk? A higher credit score.
鈥淚f you鈥檙e paying your debt this aggressively, you鈥檙e also rebuilding your credit,鈥� Terrio said, 鈥渂ecause you鈥檙e not only addressing 35 per cent of your score 鈥� which is transaction history 鈥� you鈥檙e also addressing another 30 per cent of your score, which is credit utilization, because your debt is coming down.鈥�
鈥淪o you can watch your credit score go crazy 鈥� You鈥檙e pulling the two biggest levers of your credit score at the same time, over a short period."
This report by The Canadian Press was first published June 10, 2025.
Nina Dragicevic, The Canadian Press
