Indulgences, while they are AWESOME at the time, often end up costing you the most money, which you can later regret. I know. My boyfriend and I used to love to eat out at gourmet restaurants, often. At the beginning of the summer when my bank balance started to dry up like the plant on my porch in the growing summer heat due to lack of employment, we cut back; we started eating awesome meals at home and went out maybe once every week or every other week (as opposed to almost daily). I cut back on a costly indulgence and saved a bunch of money that I needed to use to pay bills. No new information there, right? Everyone and their grandmother knows that if you cut back on stuff, you end up saving money. Well, would it put it in perspective for you if I gave you numbers? My numbers?
(Okay, don’t judge. Here they are:)
In April of 2012 (right after I got my tax refund check), I spent $220 on restaurants. $48 on fast food and$8 on groceries. And $109 on bars.
June of 2012 (the difficult month of unemployment), I spent $13 on restaurants. $9 on fast food. $32 on groceries. And $0 on bars.
Crazy, huh? I told myself it was okay to spend that money in April because the stuff I needed to pay for was taken care of. I had saved a little. I could treat myself. And I enjoyed that great food and drink. Then it took a little longer to get a job than I thought it would and I burned through those savings in June. And was left wishing that meals I had had at those tasty restaurants in April were still feeding me.
But there’s no need to live like a monk. Just last night, my good friends and I went grocery shopping. I had proudly announced that I was a dollar under my $50 budget. One of them asked, “Is that including alcohol?” I smiled and said, “I didn’t buy alcohol. I treated myself to some beauty products instead.”
I explained to them that I budget in for one treat on something like that a week. So sometimes I’ll buy a bottle of wine with my groceries. Sometimes I’ll head out to my favorite local bar and sip a well-made cocktail with friends. Last night I bought some blush and nail polish, neither of which I really needed. The difference from now and my past is that I plan for these little enjoyments. I don’t let them get the best of me and my wallet.
Spending is often tied to our emotions. Feeling sad? That chocolate bar at the checkout line looks pretty good and it’s so cheap! Feeling sexy? You definitely want a new dress to show off your legs. Feeling bored? That new gadget could help with that. If you buy things that you didn’t plan for, they’re splurges. If you plan to buy something you know you’ll enjoy, it’s a treat. Don’t let your emotions get the best of you.
There’s zero guilt associated with a treat because you not only earned and deserved it, you’re not hurting yourself by doing it. There’s tons of guilt associated with splurges because you know you probably shouldn’t have spent that money.
Indulgence is the last thing we needed to confront before we’re able to make our plan. Ignorance, Denial and Indulgence are all hindrances to your successful financial life, and now we’ve delved into all three to figure out how to combat them.
This week, look back at your spending and see what you bought that you didn’t plan on buying that you bought just because you wanted it: clothing, food, drinks, toys, manicures. A great tool to do this is Mint.com. When you link your accounts, all of your spending using your cards is logged and then it will label all the expenditures so you can see what you spent on what. Know where your weaknesses are. We’re going to use it next week to make your budget!