Money-saving strategies usually involve cutting back on something you enjoy: Scale back on name-brand skin care. Pass up that daily latte. Stop ordering fancy cocktails. Freeze your spending altogether with a "no-buy year."
Here's one savings hack that you won't hear every day: Treat yourself. Just be smart about it.
"It's OK to spend money on the things you really enjoy if you're willing to sacrifice in other areas," Chris Browning of Popcorn Finance told Grow at the personal finance convention FinCon earlier this month. "Because if you deprive yourself completely in all areas, you're destined to fail."
Science backs that up. When you think something is scarce, you tend to focus on it more and more, Eldar Shafir, a behavioral scientist who focuses on scarcity, told NPR. For example, a 2018 University of Minnesota study found that when you diet and keep yourself from a particular food, you are more likely to crave it and break your habits.
Your brain responds to the word "budget," the same way as it does the word "diet," Brad Klontz, a psychologist and certified financial planner, told The Cut. It associates both with deprivation. That can make it harder to meet financial goals — because why would you want to commit a course of action that feels both difficult and unpleasant?
And, indeed, many people don't: One in four people who don't budget say it's because they "never stick to one," a 2019 Credit.com survey found, while another 11% say they don't like to feel restricted.
Since budgeting can feel like dieting, as Browning says, depriving yourself often dooms the plan from the get-go. If you allow yourself to indulge in a few things that make you happy, though, it will be much easier to cut back on what you don't value as much.
"For me, it was like, give yourself grace to enjoy money in responsible ways, and I think it makes it that much easier to be diligent in areas you need to focus on," Browning says.
One strategy is to skip the detailed line-item budget in favor of a broader framework like the 50-30-20 budget, which divides your income among basic living expenses, discretionary spending, and long-term savings and investments. This helps ensure you're keeping up with bills and working toward long-term goals — and still gives you leeway for the extras that matter.
Also, consider which indulgences make you happiest, recognizing that your priorities may be different than other people's. Harold Pollack, coauthor of "The Index Card: Why Personal Finance Doesn't Have to Be Complicated," says he has the "crappiest" car on his street and used to judge his neighbor for having a more expensive SUV.
"I realized I was being a complete idiot and snob to look down on the fact that this guy spent a lot of money on this car because he's an upwardly mobile person and he enjoys the fact that he can enjoy this nice car," Pollack says. "Everyone has their thing."
If you allow yourself to spend some money on what you love and surround yourself with a community that is supportive and understanding, it will be easier to stick to your plans — and to come out ahead in the long run.
"It's too hard and too long of a journey to say, 'I'm never going to spend money on anything I like for the rest of my life,'" Browning says.
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