How to Enjoy Spending Money While You Achieve Your Financial Goals

The Money Minister

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For many, money management is a black and white topic. They focus on just one goal at a time, working as efficiently as possible with the money they have.

I've been on both sides of the spectrum: all work and no play to get out of debt and the eventual transition from debt-burdened to debt-free.

In this episode, we go through 7 steps to help you strike a healthy balance between your long-term financial goals and having fun, then we discuss why.

It really comes down to planning your finances and then following that plan. But it's not so simple, is it?

There are two common traps people fall into when going whole-hog on their financial goals:

1. Not spending anything on fun
2. Spending too much on fun

"Thanks for that, Sherlock," you might be saying right now. Let me elaborate.

Lots of people will not spend anything on having fun while getting out of debt. They treat this time like going to Purgatory for your sins. They want it to hurt.

And that's okay to a degree.

But I've seen time and time again that those who enter debt-payoff Purgatory come out without the ability to have fun. It can then take years of therapy to be okay having fun again.

And then what's the point?

I advocate spending 1% to 5% of any "extra" or "beyond essentials" money on fun while getting out of debt. And you can spend it however you like.

That amount goes up to 10% when you've achieved significant milestones.

When you're still allocating some money to fun, you remember to be a person. You keep your friends and other relationships. You build a deeper desire to get out of debt, which makes you do crazy things like getting another job or selling all the crap you really don't use anymore - and maybe some that you do.

But then... some people swing from spending just a little bit on fun to spending WAY too much money on fun.

I've seen it over and over. It's like the old self woke up and they start spending without reserve on stuff they eventually regret: takeout 3x a week, fancy restaurants, cases of wine, too many Christmas presents, the new Playstation or Quest system. The list goes on.

And the next month, they're back in Purgatory, paying for their sins of spending without keeping a plan in mind. They realize getting out of debt is pushed by a month or two and start beating themselves up.

That's not a great cycle to be in.

Here's the thing...

Your goals are YOUR goals. Your goals can be about enjoyment. Your goals can be about helping other people. Your goals can be about your retirement (and some should be!). Your goals are YOURS and money is a tool that helps you get to them.

Some people need to have enjoyment goals. Our next goal is Disney World with the kids! We're stoked.

Some people need to have financial goals that sound WAY better to them than their enjoyment goals. They need to learn to live within their means.

Often, my job is to figure out where people are on this spectrum and help them stay healthy, with relationships, and not burnt out while trying to get out of debt.

It's hard to strike the balance.

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