Since it’s the new year (and in the new year you tell the truth), I’m going to make a confession.
I don’t like blanket affirmations.
I prefer personalized advice, the kind that takes into account your circumstances, personality, and goals.
This is my preference in all of life, but even more so in personal finance. When it comes to spending money, one-size-fits-all advice could put some people in serious financial jeopardy.
Of course, there are some best practices we should all work on: pay off debt, control spending, and so on. But ascribing to a “treat yo’ self” mentality? That’s advice that I’m not sure is good for anyone.
Do we need more encouragement for spending money?
Here’s a big problem with the “treat yo’ self” mantra: The majority of people don’t need more encouragement to spend money.
We live in a consumer culture. I don’t have a problem with that — my all too regular visits to coffee shops and bookstores affirm that I’m no stranger to spending money.
But the ease of access to consumer goods nowadays means we need a little more encouragement to help us control spending, not more encouragement to spend money.
Amazon can send you anything you want almost immediately. Your credit card enables you to swipe without feeling the heat of money leaving your bank account. And the things we love to use every day always seem to have an upgrade available.
But do we really need the motivation to spend that money?
The message behind “treat yo’ self” is great — we should be doing things that make us feel good. But when this mantra turns into making more purchases on a whim, that good feeling might dissipate a little too quickly.
When that cycle begins, we’ll have to spend that money over and over again to keep up the good feelings.
Who’s tracking your treats?
The second problem with this mantra is that it activates the already addictive nature of buying. In fact, it not only activates it, it crowdsources it.
If you share a picture of a shiny new object on Instagram with the hashtag #TreatYoSelf, your friends will give you a lot of virtual high fives. But will they notice that it’s the fifth time you’ve done it this month? Will you notice?
Impulse control is incredibly difficult to conquer. Let’s not make it worse by celebrating spending money whenever we feel like we need some self-love.
Treating yourself too much can hurt you in the end
“Treat yo’ self” may sound like a positive sentiment, but it can actually hurt you in the end. Spending money on too many of these little boosts does nothing to help you achieve your long-term goals.
When people think of budgeting, they often fear that they’ll be restricted. But that’s not what budgets are for: Budgets are simply a blueprint for your money. Your income may dictate the boundaries of the foundation, but you get to decide what to put inside.
Every time we stray from our carefully drawn plans, we’re not treating ourselves — we’re getting in our own way. When we step back and look for the house we were building only to find that we’re still on the first floor, suddenly it’s clear what those treats were really doing.
Here’s how to control your spending and treat yourself at the same time
I do not, in fact, abide by the hate-your-life-to-reach-your-goals mentality, and I still believe in the general concept of treating yourself. However, there are better ways to use the hashtag. Consider the following:
- A snapshot of the coffee you made at home in your favorite mug #TreatYoSelf
- An image of you handing cash to a teller to deposit money into a savings account #TreatYoSelf
- A picture of your meals for the week after you prepared them all at once so you don’t feel tempted to buy lunch out #TreatYoSelf
The list goes on and on! As you share images of how you control your spending instead of wasting that money, you can see snapshots of the real benefits you reap. Before you know it, you could capture a screenshot of your student loan balance after it’s paid off or a picture from that vacation you saved for.
Go ahead and treat yo’ self, but do it by creating a category in your budget for those extra little somethings so they don’t dig into other areas of your budget. Celebrate the little things you do every day to come closer to your big goals, and commend your friends for doing the same thing.
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1 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.89% APR (with Auto Pay) to 5.87% APR (with Auto Pay). Variable rate loan rates range from 2.47% APR (with Auto Pay) to 5.87% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of Month/Day/Year, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 08/21/18. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at firstname.lastname@example.org, or call 888-601-2801 for more information on ourstudent loan refinance product.
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2 Important Disclosures for Laurel Road.
Laurel Road Disclosures
3 Important Disclosures for SoFi.
4 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
5 Important Disclosures for CommonBond.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
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