We have all experienced guilt at one point in time about a purchase we made. This purchase could have been made on something we do not even use, or as a way to congratulate ourselves- “heck yes I just ran 5 miles, time to buy that new bikini!” Whichever purchase, we are absolutely sick & tired of feeling that guilt. The staying up at night analyzing in your head whether to return the item or not, the coming up with justification as to why you made that purchase, the pang of guilt you feel when you tell your family and friends that you bought it. Well I am here to say – no more of that! We all work incredibly hard as students, mentors, entrepreneurs, family members, employees, etc. We should feel free to reward ourselves without feeling guilt any longer. I am going to provide you step by step instructions to save for the short term to reward yourself for all your hard work.
Essentially, setting aside money to reward yourself would be best if you had a budget (check out my post on different methods to create a budget later!), but we are going to go a simplified route. The 3 things that I need you to know are:
- What is your take home income per month? (refer to your paycheck if you are unsure)
- What is the total of all your fixed expenses combined per month? (i.e.: expenses that are absolutely due each month such as rent, car payments, student loan payments, insurance, cell phone bills, etc.)
- A general idea of your variable expenses (i.e: grocery bills, gas costs, shopping, monthly subscriptions, gym memberships, or things that may fluctuate or not be necessary for that month)
Okay, so let’s plug in some numbers (jot this down if it helps!):
- Your monthly take home income is $2,000
- The total of your fixed expenses combined is $1,200 (rent is $720, car payment is $300, car insurance is $50, cell phone bill is $80, student loan payment is $50 for a total of $1,200)
- Variable expenses estimated at $200 (gas estimated at $50, groceries estimated at $90, gym membership at $60 for a total of $200)
Next, you will use your take home income per month and subtract your fixed expenses & variable expenses.
$2,000 (take home income) – $1,200 (fixed expenses) – $200 (variable expenses) = $600 total left over per month.
Alright! Now we’ve got the magic number. After all bills & expenses are paid for in a month, you should have a total of $600 leftover (please keep in mind you have other expenses you may need to take into account such as retirement savings, emergency funds, etc. That may change your leftover dollar amount per month…this is just a hypothetical situation). This is where the fun part comes in. You can now determine an amount of money from this leftover total that is used solely to reward yourself!
There is no right, or wrong dollar amount to choose. You can allocate either $10 to $100+. Feel empowered to choose which dollar amount is comfortable for you. Okay, so let’s say you choose an $80 reward allocation each month. You can use this dollar amount for whatever your heart desires! New clothes, a trip with your friends, trying out that new restaurant, joining a rock climbing class – whatever it may be it should be something you enjoy. Allow yourself to be treated and not feel guilty for spending money because you knowingly set aside that dollar amount each month. This will be an amount that is available after your responsibilities of paying your bills & expenses are taken care of. The good news? Say you decide not to spend that $80 for this month…roll it over to next month for a combined $160 to create an even bigger reward for yourself! Or wait three months for a total of $240 to spend. There are incredible amount of ways to approach rewards savings for yourself.
The goal after completing these steps is to recognize that allocating a certain dollar amount solely for treating yourself is possible – whether large, or small. Each one of us may be at a different point in life, but creating ways to save for the short term to reward yourself will allow the prevention of overspending, or guilty money mistakes (“Yikes, I spent how much on my tab at the bar last night?”). It can create a new, powerful habit that you can utilize for months or years to come. I encourage you to use these steps to create your monthly rewards dollar amount. After all, who wants to feel guilty for going out to buy coffee that may be overpriced? If you know you have that reward and the money to do so, you sip that coffee with confidence!