Alright I’m back from vacation and I got to be honest my timing could not have been worse. The reason I took off for the week was because I had reading week from school and I was ready to lose my mind with both school and work full time. I pretty much work hard all year so when I have any time off from school I try to use it to recharge my batteries. Even though I did recharge my batteries while laying in the sun all week I got food poisoning near the end of the trip and to make things worse I forgot how much work I had waiting for me upon arrival back home. School is going to keep me extremely busy the next few weeks, but despite that I will still post regularly. I want to apologize to anyone that has tried to contact me in the last week or so. I am now officially back full swing so if you wish to contact me then please feel free to do so.
As a result of meeting some very interesting people and having some thought provoking conversations I have decided to write about a subject that I discussed a few times over the last week. Is spending money a good way to reward yourself? The question is so subjective that no one can possibly come up with a conclusive answer. In my own opinion I will say that the answer is yes. If you care to know why I feel this way then please read my list of reasons.
1. Motivational tool. Some of us, in fact probably almost all young people can’t save money unless they see some sort of reward. One easy trick is to try to save 50% (just a rough number that depends on your living conditions) of your pay while still living at home. From that 50% you can tell yourself that you will spend 10% quarterly or semi annually in order to reward yourself.
2. Results are visible. Whether you reward yourself by travelling or buying some new gadget, the results are clear and visible. Many times when we are saving our money the fact that we do not see clear results it has us questioning the purpose of saving.
3. Makes saving money fun. Saving money for retirement and setting up emergency funds may be extremely boring for most young people. By setting up your savings so that some of your money is used for “fun” purposes such as going out for a nice dinner or visiting that part of the world that has interested you for many years. I don’t know about you guys but ever since I started rewarding myself with vacations I have become more motivated to save more of my income.
Before I close today’s article I would to give so much needed thanks to a few other personal finance bloggers that linked to me while I was away.
Green Panda Treehouse was kind enough to link me in her weekly roundup last week.
Jeff Rose of Good Financial Cents also linked to me in a roundup of his.
John at Passive Family Income featured a guest post of mine last week when I was away which is available here.
A great big thanks goes out to the guys over at College Finance 101. They are both very intelligent people that run a highly respected blog that gears to pretty much the same audience as Studenomics. I have been following the blog for quite a while now and I was honored when they linked to Studenomics last week.
If done responsibly, yes. But too many people in college carry around the idea that “I work hard I should spend money frivolously!” Not the case!
I think the best thing to do is spend money frugally. Spend it. Get enjoyment out of it. But don’t go overboard. And I usually place experiences over material goods.
I actually got back from vacation yesterday, so I hope your vacation was enjoyable as mine!
I would agree with you that spending money is a good reward under 2 circumstances: 1) Always pay cash – don’t reward yourself by racking up debt on your credit card. 2) Make it proportional to your situation. If you make $20,000 per year, you can’t afford to take a $5,000 shopping spree, but if you make $200,000 a year, a $5,000 shopping trip isn’t out of line every once in a great while.
This question is one of those ones that you think omg why have I never asked that!
I think a lot of it depends on the nature of the reward. Did you really do something that needs rewarding?
I think some of it depends on how that money is being spent to reward you. For example I like rewarding myself with piano sheet music which I usually print from the Internet. This costs me a little bit in printing and paper costs but I feel it’s worth it as playing the piano helps me relax and also keeps up my creativity.
On a bigger scale, I would really like a digital piano (mainly because I don’t like playing whilst my family are around as the piano can be heard throughout the house and I don’t feel it’s fair for them to have to constantly endure it) but it’s a massive cost. I think I’d have to do something extremely impressive to be able to reward myself with that.
My sister is a good example. She completed her oral examination in her final year of university and decided she deserved a treat because she worked endlessly on it. Her treat? A Starbucks iced-coffee. This was about £2.65. (She’s thriftier than me and so this treat made her feel so good).
I think you can get the same pleasure from buying a £3 magazine as you can buying a new iPod. It’s always a fleeting feeling anyway.