As someone who writes on financial matters all day, I'm certainly not one to spend frivolously. At the same time, I do not believe in depriving myself of the small luxuries that make my days more pleasant and easier to deal with. And sometimes, this means shining on the expensive coffee bought in the store knowing full well that I can make a cup at home for a fraction of the cost.
When I started this habit (which, to be clear, I do not indulge in every day but rather once or twice a week – at most – as a gift), it was difficult to sip my coffee bought in the store without feeling guilty. I was there, paying between $ 2 and $ 3 for something that would cost a few cents in my kitchen. But there's a reason why I'm now able to drink my extravagant coffee without stress: it does not stop me from achieving my financial goals.
If you want to enjoy your favorite drink equally impeccably, here are two things you should do.
1. Paid first
You could argue that spending $ 2 or $ 3 a day on coffee will have no impact on your long-term financial goals and, in many cases, you'd be right. But personally, I feel much better about spending that money when I learn that I have already made my fair share of savings for the month. That's why I take care to pay me before dedicating myself to the things I want, whether it's food, clothes or holidays.
As a freelancer, I do not collect a fixed paycheck, but rather get paid for the work I produce. Therefore, automating my savings is not as easy as it would be for someone who gets paid a fixed amount every two weeks. However, every time I get paid for an item or project, I take at least 20% of my earnings and place it in a pension account. Because I'm taken by emergency savings and I'm not putting money aside for short-term goals at the moment (I already own a house, so I do not have a down payment on my radar), I can use that part of my income to save money for future.
Now, if you're late on emergency savings, establish that the safety net should take priority over all other goals, including retirement. But if you have the habit of paying yourself first, you will buy the option to use your cash surpluses to give yourself without worries. So go ahead and set up an automatic savings plan with your bank, or sign up for your employer's 401 (k) if you're good at short-term liquidity reserves. It's a smart move regardless, and if it helps you avoid feeling guilty about indulging here and there, even better.
2. Follow a budget
I firmly believe in following a budget because doing so helps me to understand where my money is going. In this way, if I do encounter financial problems at any time (such as the time when I needed to break down more than $ 15,000 to solve a classification problem on my property), I'll know exactly where I have room to cut corners.
If you want to enjoy your luxury shopping without guilt, create a budget and enter it. If, for example, you come to see that you can afford to spend $ 3 a day on coffee and still pay your bills and save money, there is no reason to feel bad. On the other hand, if you notice that your daily drink is making you crush in other areas, you may want to resize or reduce another category of spending if buying beverages bought in the store does more to improve the quality of the your life.
Above all, make sure your favorite delicacies, whether in the form of coffee or anything, do not prevent your ability to save every month. If they do, then once again, you will have to consider reducing or altering your spending elsewhere until your income increases. And again, paying before can make this decision easier. If you automatically calculate a certain level of savings in your budget and work backwards from there, you will be more likely to make smart choices about where to get the rest of your money.
Although it took me a while to get to a place where I could afford small luxuries without guilt, I am happy to have finally arrived. And I encourage anyone who feels uncomfortable regularly in indulging in taking the steps above and joining me.