If you want to be financially successful, it's important to clamp down on your spending. On the other hand, allowing yourself to budget money for a single regular indulgence might be an effective way to keep your overall spending on track.
Photo by John Weise.
Finance blogger Adam Baker says even though he's typically a frugal guy, he allows himself to sink part of his hard-earned cash into martial arts training, a hobby he really loves. Although the classes run him more than $US160 a month, the benefits — good mental and physical health — far outweigh the pain to his pocketbook.
Sure, he doesn't need the classes in the same way he needs to pay his electric and phone bills. Baker's point, though, is that while financial advisors might suggest cutting back on his expensive hobbies, doing so might make him liable to burn out on saving money altogether. All work and no play... well, you know the rest.
If you're trying to decide whether an expense falls under the "financial vice" category, Baker says to ask yourself a series of quick questions to help you figure it out. Chief among them:
Is it consistent with our other goals? This is tough because many of these expenses will work against our financial goals by nature. However, we try to consider any ancillary benefits that are generated from the financial vice. Martial arts helps my fitness goals, provides me with a fun community of people, and helps me to stay mentally calm while under intense pressure (trust me).
Check out the post for more questions to ask yourself, and some ideas on limiting the amount of financial vices you indulge. What about you? Do you find that giving in to a spendy craving or two helps you stay on budget, or do you fold like a house of cards once you buy something not in your budget? Talk about it in the comments.
How to Manage Your Financial Vices [Get Rich Slowly]