Why Everyone Needs Financial Cheat Days
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Following a budget is like sticking to a diet — you must keep your eyes on long-term goals at the expense of short-term indulgence. But a regime of all belt-tightening without any splurges can lead to abandoning the resolution and going hog wild with spending. That's why even the most rigorous budgeters must build in occasional cheat days.
Anyone who has overspent a paycheck or carried credit card debt a little too long understands the benefits of budgeting. A budget helps you divide your monthly income between the bills you must pay, the expenditures you want to make, and the obligations you should attend to, like debt repayment or funding long-term goals like retirement. But developing a budget is often easier than sticking to one.
Following tight financial resolutions every day can wear out your willpower fast, causing you to fall off the wagon and go on a spending spree. Some financial experts echo diet experts and suggest "cheat days" — limited splurges that help you stick to your long-term goals. The key is to feel indulgent without going overboard.
One way to build in cheat days is to adopt a more flexible budget. A detailed budget allows little wiggle-room for occasional splurges. If you spent the $50 you budgeted for entertainment this month on a concert ticket, there's nothing left if you want to take in a movie. Consider a more flexible budgeting scheme like the 50-20-30 rule, setting maximum spending for necessities at 50 percent, paying down debt at 20 percent, and discretionary spending at 30 percent. Sticking to the plan isn't so painful when you get to decide every month where to spend that discretionary money.
Go Your Own Way
Be sure you know what you really would enjoy or appreciate before you pull out your wallet on a cheat day. It's all too easy to want to buy what friends have, or to surrender to the pull of advertising. If your heart longs for a fancy coffee drink, that's a fine and modest splurge, but it's wasted money if you aren't much of a coffee fan and would prefer a new book instead. Keep your preferences clear to get the most out of your cheat-day pleasure with both big purchases and small ones.