Is it okay to Treat Yo Self?
I love to spoil myself. I think most of us do. While we all have different tastes, likes, and preferences, there are probably things you like that you like to splurge on too. Will that ruin your financial plan? Will it destroy your ability to retire? Maybe.
I think there are three things that can help you determine if it’s okay to splurge. First, find the right balance for you to be happy. Second, know your budget. Lastly, make a financial plan.
Balance is one of the hardest things of life to find. Balancing time, budget, diet, I suspect we all have struggled at some point with balance in our lives. For most aspects, there’s no right answer that’s the same for everyone – it’s personal and we each need to decide what’s right for us. It probably will even change throughout our lives as we grow.
For me, when I was in my 20s, I probably worked 60+ hours per week at my job, then spent countless hours remodeling a house in my free time. That was a good balance for me at the time. It helped me achieve my goals (at the time), kept me out of trouble, and was a great learning experience. Now that I have kids, I work a “normal” schedule, I spend very little time on remodeling projects, unless they are necessary to keep the house running, and spend a lot of time with my kids; it’s a totally different balance now, but it’s right for me and my family right now. I suspect when my kids get a little older, they won’t want to be around me all the time and I’ll pick my hobbies back up more.
The point here is, yes, you should treat yo self, but you can’t do it all the time, it needs to be taken in context of everything in your life. Some rest and relaxation is needed, but you also probably need to work. It’s okay to be lazy sometimes, but you need to exercise and be active sometimes too. You need to eat vegetables. You probably should save for your future financial well being. Life can’t be all cupcakes and parties. Balancing the things we want with the things we need is something to ponder, continually work on, and revisit throughout life. Growing and change are hard, but to live a happy life, I think it’s critical.
I don’t think everyone needs a budget. I don’t think it’s helpful for everyone, I think the stress caused by budgeting is not worth the energy for some, and I think there are alternatives that many use (maybe passively) that are just as good as having detailed spreadsheets.
What is important is to know how much you can spend on splurges and fun money. Maybe this means knowing you have a monthly allotment for splurges. Maybe you have a savings account where you keep your emergency fund and amounts beyond your emergency level can be used for splurges. Maybe it means paying your bills, making your savings goals, then spending the rest.
Whatever works best for you is best and stick to it. The point is to know and have a system for your budget, whether it’s formal or not.
Last, have a financial plan. Can you buy that watch? Can you afford to buy fancy coffee at the fancy shop every day? Is a hot tub affordable? What about a pool or renovation? Those expensive shoes are really nice too, can we get them?
I think almost anything is possible with financial planning. It might mean saving up. It might mean sacrificing on one thing to get another. It might mean being in a position where you have cash or a 0% interest credit card you can use to get it now. The important part of financial planning, in this context, is it helps provide confidence and clarity to what you can responsibly spend today and what you need to save to achieve your long-term goals.
Financial planning is about balancing lifestyle today with lifestyle in the future. There is uncertainty about the future, but planning allows us to weigh a lot of scenarios and get a confidence level we are comfortable with. It also gives us confidence that, if we are making our savings targets, we can spend what we have in excess and we have some level of confidence that we can still achieve our long-term goals.
Remember that your goals in the long-term are probably not going to be certain or locked in if you start planning early. Markets fluctuate, taxes will change, inflation will be something, goals will probably change, and we can’t say with 100% certainty what any of these will be. There is a savings and wealth level that would give a lot of confidence that you’d be successful in retirement, but there will always be risks and uncertainties.
Treat yo self! Splurge the splurge! Just make sure you know what you are doing first and make sure it’s done in conjunction with your responsible actions too. I think financial planning is the best way to have confidence that your spending is reasonable. So make a plan, update it regularly, and live it.
I think the best ways to know if you can make extravagant expenses are to make sure you have a good balance of fun spending with responsible spending, have a budget of some sort, and make a financial plan. Working these continually and simultaneously will help increase your chances of long-term financial success and current happiness – whatever that means to you!
If you’d like to discuss your financial situation or create a financial plan, Telos Financial welcomes the opportunity to talk with you. Contact us today to schedule a no cost or obligation introductory meeting. Telos is a financial planning firm serving Michigan’s high income and high net worth millennials, recent college graduates, and small business owners.
Telos Financial is a fee based, holistic financial planning firm located in Plymouth, Michigan serving young professionals and their families. Dennis LaVoy is a Certified Financial Planner® Designee and a Chartered Life Underwriter®. Dennis is proud to be a firm based in Michigan focused on serving high net worth and high-income young professionals, millennials, and those preparing for retirement. He founded Telos Financial and to provide fiduciary financial services to families across Michigan including Plymouth, Canton, Ann Arbor, Detroit, and as well as all over the great United States of America.
Thanks for reading the latest edition of Planning for your Purpose, Telos Financial’s blog, where I discuss different topics related to financial planning. CERTIFIED FINANCIAL PLANNER™ professional Dennis LaVoy is Plymouth, Michigan’s holistic financial advisor serving clients throughout the mitten as well as across the country.
The primary purpose of the blog is to introduce financial planning concepts and questions I receive from clients that I believe are important. I want to start discussions that will educate, benefit, and improve your financial life, ultimately, to help you focus on your telos!