How Small Treats Can Help You Save Money

Sat, Jan 22, 2011

Budgeting, Financial Advice

Let’s face it. Saving money can be hard, especially if we have to sacrifice a lot of what we enjoy. In this respect, it’s sort of like dieting. We hope to give up many of the things we like that are also bad for us in order to become healthier. When we sacrifice in order to save money, we sometimes deny ourselves some pleasures that we’d otherwise be willing to spend more money on. However, they often get cut from the budget because we have more important financial goals that we need to meet.

However, completely denying ourselves can also lead to our making a mistake or binge purchase that nearly ruins the savings we have worked so hard to keep a hold of. In order to avoid this, I recommend rationing our ‘treat’ purchases just as we would our other expenses. By rewarding ourselves with a small ‘treat,’ we can actually encourage good, responsible money-saving behavior.

Of course, I don’t mean rewarding ourselves with just any treat, nor am I saying that you should buy money to save money. Treating yourself to save money means you have to be rational and responsible the entire process. Even the selection of the treat has to be managed responsibly. In fact, it’s helpful to view the treat as a legitimate part of the budget, instead of a ‘treat’ that exists outside of the budget. In other words, your saving actions—how much you can save over a week or month—directly affect your ability to purchase the treat.

In addition, the ‘treat’ must be economical and priced within reason, otherwise it’s not so much a ‘treat’ as it is a big expense. In other words, a ‘treat’ cannot be a thing for which you’d probably try to save up your money. That should be a necessity. Instead, a treat should be a short-term thing that will encourage you on your way towards saving more money!

But even though it’s short-term, you can still plan for it. When you plan out your budget, you should agree upon the treat beforehand. By doing this, you negate some of the irrationality that often goes into splurge-purchases. You also prepare yourself for the reward, thus creating anticipation in your brain. Anticipation can help spur you on in your desire to be financially responsible and save money. This is why the treat doesn’t have to be very much money. Instead, you’re using the anticipation of the treat to inspire you towards financial responsibility, rather than the treat itself.

If you do all of the above, you can enjoy your treat free of guilt. You worked hard for it. You earned it. And, more than anything, you should realize that by earning that little treat, be it a weekend movie or a dinner out on the town, you have worked towards achieving your overall financial goals.

This guest post is contributed by Raine Parker, who writes on the topics of accounting degree. She welcomes your comments at her email Id:

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