Written by: Colleen Lennon, LCSW
“You want me to budget for “fun” money? But I am supposed to be paying off all of my debt, how is that going to help me reach my goal?” In my work as a Financial Therapist, that is typically the response I receive from clients when I tell them they need to add in spending for “fun,” spending for themselves, or spending for things they enjoy or want to do/buy. This may seem counterintuitive when one is trying to pay off all of their debt and be in a better financial situation, but it is necessary for one’s mental health and motivation. Think about it this way, if you do something one hundred percent all the time, don’t you think you will get burnt out or tired from not having a break? It is the same way with finances. If an individual is budgeting one hundred percent of all the money they have coming in, down to the last penny, they may start to feel deprived, unhappy, and possibly even get discouraged and go on a spending spree or binge. Those feelings alone may result in losing motivation and not sticking to one’s budget, which will sabotage one’s motivation and ability to reach the desired goal of being debt free and living a more positive financial life.
In an article written by Tchiki Davis on Greater Good, The Science of a Meaningful Life, through University of California, Berkeley, titled “How to Budget for More Happiness,” the idea behind the title of the article is explained. In the article, the author explains how reducing the amount of money spent on fixed needs (required payments) and wants, in addition to managing the amount spent on variable needs, can result in more money to be used on variable wants, which increases day-to-day happiness. The author states that “variable wants are the most efficient at increasing quality of life and happiness.” These variable wants can include, but are not limited to, something paid for up front that you will use over time (such as a gym membership or yearly pass to spa, park, resort, etc.), vacations, gifts for self or others, charitable donations, a nice dinner or date, or small material items. Another important point is the need to adjust fixed wants that have become viewed as such due to living out of habit, such as the daily morning run to the coffee shop. Once these expenses have become habits, one may tend to view them as needs, lose the enjoyment from them, and end up spending a substantial amount in the long run. Once an individual is able to refocus their mindset and view these items more in terms of wants or “treats,” they hopefully will not need them as often, have more enjoyment when they do have them, and in turn end up saving money.
Budgeting should not be a painstaking or dreaded part of one’s life. It should be used as a way to work towards one’s financial goals, a positive financial lifestyle, and increase happiness. It is also very important for one’s mental health and happiness to track. Yes, everyone will tell you when budgeting that you should be tracking your spending, but you should also be tracking your debt and payments made. If statements, balances, or amounts due are the only way one sees their debt, they are missing a huge piece of the picture. Just looking at the current number from month to month can be overwhelming or depressing, leading to feelings of hopelessness or wanting to give up. But if one tracks the amount of debt, payments made each month, and can see the progress and numbers going down, this will also be highly beneficial for motivation and happiness. Use budgeting to your advantage, don’t let it get you down! Please contact Symmetry Counseling today to set up an appointment with a Financial Therapist who can help you view and use budgeting in more positive way.
Davis, Tchiki. “How to Budget for More Happiness.” Greater Good, The Science of a Meaningful Life. University of California, Berkeley, 20 December 2016. Web. 13 February 2017.