Sarah was finally making money. She had slogged through almost three years to get her business off the ground and, at last, it was taking on a life of its own. What wasn’t taking on a life of its own was her finances.
She had taken a couple of personal finance classes and talked to some accountant friends. Yet there was never anything left at the end of the month to put into savings. In fact, a few months she still had to scrimp to make ends meet.
If there’s one phrase that can sabotage even the finest spending plan, it’s “ I deserve it .”
Where does this come from? Typically it comes from women making up for all the years — or even a short period of time — when they “went without” as kids or young teens.
Maybe they were teased about their clothing or about not having what other kids had. Or maybe they just felt “different” because their parents made comments about how poor they were, or how rich other people were. Or maybe an incident was seared on their brain when they went to buy something and were embarrassed to have to put it back because they didn’t have enough money to buy it.
In any case, that feeling of deprivation is a pretty strong trigger for unnecessary buying.
That trigger can make them feel they have the right to spoil themselves. (And if they work hard to earn their money, that’s even more reason!)
So, although enough money may be coming in to cover all expenses, plus an amount for pleasure spending, the “ I deserve it ” mindset can make it really easy to fall for must-haves that they see in magazines, in boutiques or online:
- Something pretty or luxurious, something that says “you’re special.”
- A Thai yoga massage.
- A new anti-age cream that makes that 49-year-old model look 35.
- A quick weekend cruise to an island where “everything’s included.”
- Dinner and drinks at the new little place downtown.
- Or all of the above.
And before you know it, the amount set aside for pleasure spending looks miniscule compared to what comes in on that month’s credit card statements.
One of two things happens next: either credit card debt creeps up, month after month, or (if credit cards are paid off each month) it becomes difficult to close out the rest of the month’s expenses with what remains.
So how can the “ I deserve it ” mindset be defeated?
Most people have trouble differentiating between needs and wants. To defeat the ” I deserve it ” mindset, stop and think of what your needs are. These are the things you absolutely, positively have to pay each month: mortgage or rent, food, insurances, credit card minimums, installment payments on loans, gas, anything else that someone could come yell at you about if you don’t pay. Or that will cause you true lack if you can’t buy (food, gas, etc.)
Everything else is a want.
Make a list of all those needs. Look at your disposable income. Whatever is left after earmarking money for your needs is available for wants.
Then give some real thought to your wants. Ask yourself:
- Do I want to be able to take a vacation next winter? If so, how much do I want to set aside each month towards that?
- Do I want to pay down my school loan faster than required? If so, how much do I want to set aside each month towards that?
- Do I want to start feeling better about my retirement prospects? If so, how much do I want to set aside each month towards that?
- Do I want to go out to dinner once a week? If so, how much do I want …
You get the idea.
Instead of coming from a place of deprivation, realize you have full control over how you spend your money.
Figure out what brings you the greatest joy. Is it always having instant gratification? Or is it having some fun, some nice things, but also feeling like an adult who is making adult decisions? Is it feeling that you’re taking care of yourself for the long term?