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Saying 'yes' can help you say 'no'

Occasional indulgences will keep your finances on track.

By Donna_Freedman Oct 1, 2009 2:03AM

Scared that your money won't keep pace with rising food and energy costs? You may be tempted to cut to the barest of bones, buying nothing nonessential and pinching every penny twice before putting it under your mattress.

I have a better idea. Spend a little money. And spend it on something that isn't strictly necessary. 

Seriously. I believe that allowing for the occasional indulgence, whether it's a new book or a meal out or a carousel ride, will keep you on budget in the long run. 

I'm not telling you to trash your spending plan. I'm just suggesting that you say "yes" to a little splurge here and there. Having something that you want every so often makes it easier not to have it the rest of the time.

Just ask personal-finance blogger "Story Girl." She bought herself a chocolate croissant when she should have been saving for retirement.

Sweet nothings
We've all heard of the "latte factor," i.e., small expenditures add up significantly during one's lifetime. In a post called "The chocolate croissant effect," Story Girl recalls the summer she took a second job to save up for a cross-country move. One day she forgot to bring coffee from home and stopped in a bakery for java to go. 

By the cash register were freshly baked chocolate croissants for $1. Story Girl thought about the latte factor: "If I didn’t buy a chocolate croissant every day for a year, I’d have an extra $365." She reminded herself that she was working an extra job to save money, not spend it.

Then she bought a chocolate croissant. 

It was delicious, and it didn't send her down the road to financial ruin that summer. Most of the time she didn't buy a croissant. But when she did, she enjoyed it thoroughly "instead of letting myself feel guilty about spending the money." After all, she was still socking away a second, part-time salary. The occasional $1 treat was not going to break the bank. 

The fact that she brought her own coffee from home every day indicates that she was already conscientious. So why not have a croissant now and then?

Today, no; later, maybe
One way to keep little kids from melting down in the store is to tell them that some days are "looking days" and others are "buying days." 

I've used a version of this tactic during the past year. To put off certain purchases, I tell myself, "Today, I'm going to say 'no' to that." Usually these are small treats like English muffins or a pint of ice cream.

Frankly, it wouldn't hurt for me to miss a few treats. But beating myself up -- Why are you even thinking about mint chip when you know you need to lose weight? -- wouldn't do me much good. What does work (usually) is telling myself, "Not today, but maybe later in the week I'll buy this."

Most of the time, I'm too busy to go back to the store. Problem solved.

For other people it's not as simple. They feel they need updated wardrobes to keep up a professional appearance, or they want to spend time with friends and their friends just happen to like to go dancing every weekend.

Need it or want it?
If these are things we really want, then we should try to arrange our budgets to include them. Getting creative helps: If you want to go clubbing with friends, then take your lunch to work every day for a week or two and use the savings to get yourself beyond the velvet rope. You can also trim your budget by learning to discern needs from wants. 

Sometimes, though, it's OK to give in to what you want. Nobody needs a croissant, or a lipstick, or a carousel ride. But these things make our lives nicer. 

Give yourself a buying day every now and then. They make the looking days a lot more bearable.

Published June 20, 2008



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