If you go to the calorie counters section, there is a F.A.Q. section on calorie counting.
There are a few problems that can happen with eating too low calorie:
The first thing that should be explained is that the more you weigh, the more calories your body burns each day doing everyday activities. If a 150 pound woman, and a 250 pound woman both walk a mile, the 250 pound woman burns more calories doing this, because she is carrying 100 extra pounds the whole way with her.
This is the reason that you should not start out a calorie counting plan eating 900-1200 a day. You should start out eating the highest amount that you can (while losing 1-2 pounds per week) because when your weight loss plateaus after 20, 30, 50 pounds...then you want to have some calories to play with.
For instance, if you start out at 250 pounds and find that you can lose 2 pounds a week eating 1800 calories a day, then that is what you should be doing. After you lose 20, 30, or whatever pounds-you might find that your weight loss slows down or stops. This is because you are now carrying less weight-so you are carrying around less when you walk through the store, go up the stairs, etc. each day. At this time, drop the calories down a bit to maybe 1700, or 1600 if needed. You can also increase your exercise a bit-either in length, or intensity. This will get things going again.
You will find that as you near goal, because you have less to lose now-that it will slow down. The last 10-20 pounds come off the slowest. You don't want to start out at 900-1200 calories, and then have nowhere to go to (other than anorexia...) when your weight loss stops down the road. Your body will have gotten accustomed to an extremely low calorie level way too early in the game, and you are going to have trouble losing later on.
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Another thing that can happen with a too low calorie diet, is simple:malnutrition. You cannot live on 900-1000 calories a day, for an extended period of time, and not suffer health consequences. It is very hard, and you have to be pretty diligent, to get in your nutritional needs at 1200 calories a day (which is why most low calorie diets don't recommend that you go below that level for long periods of time.) At 1200 calories a day, to get in all the protein, fiber, fat, calcium, etc. that you need each day-you have to be very, very strict. No 100 calorie packs, etc. or you are going to be missing nutrients.
Sometimes very small, petite women DO have to go to 1000 calories a day-but this is only when they are trying to lose the last 5-15 pounds. It isn't for the whole journey!
After a few months of not enough nutrients-there will be side effects such as brittle hair and nails, drab looking skin, etc. and sometimes there can even be medical issues as well from losing weight too quickly. (gallstones, etc...)
So, even if there are no bad effects at this moment-health, appearance, and having trouble getting to goal because you have slowed your metabolism in the process are future concerns.
Aphil