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Between inflation, borrowing costs and a tougher job market, many Americans are feeling financially stretched. In fact, only 27% of U.S. households report living comfortably, according to a Yahoo Finance/Marist Poll taken in December. Thirty percent say they’ve got a “little left over for extras,” another 30% say they’re just able to cover their basic expenses, and 13% say they’re not even managing that. When there’s not much wiggle room with money — you’re trying to keep to a budget, avoid debt, and maybe (hopefully?) save a little for college or retirement — is treating yourself out of the question? What about if you’re on a “No Buy” kick where you’ve pledged to stop eating out or shopping? Should you ever treat yourself? Yes, actually. While you don’t want to use needing a treat as an excuse to lose your determination, giving yourself a reward every now and then can actually boost your resolve and improve your chances of reaching your financial goals. It’s all about knowing when and how to do it.

When You Should Treat Yourself

No one wants to be worrying about financial instability or making it to the next paycheck. And for most of us, discipline is key to building financial security. Impulse buying was shown to delay big financial goals for 52% of impulsive spenders, according to a 2023 online survey by The Harris Poll and YNAB. But there are risks to going overboard. For one, it’s stressful worrying about every single expense. And during economic uncertainty, allowing yourself a small indulgence like a new lipstick or book can be a form of coping, providing a sense of control. Being too restrictive can also make you feel deprived and then backfire, triggering a spending spree. The American Psychological Association suggests willpower is like a muscle that can become exhausted if used too frequently. The key is to plan for occasional indulgences, so you can satisfy the desire without jeopardizing your overall financial health. Here are some specific situations when it can make sense to treat yourself — in moderation:

1.    To celebrate an achievement. Rewards reinforce good behaviors. So if you’ve landed a new job, a dinner out could be a great way to celebrate. (Pro tip: If you’ve been looking to try that super fancy new restaurant but it’s out of your budget, go for lunch or brunch instead. It’s usually a cheaper way to experience the same ambiance and food.)

2.    To invest in your mental health. If you’re stressed out, there’s nothing wrong with getting a massage, a therapy session, or even a higher quality mattress. Self-care is usually a worthy expense, and will put you in a better frame of mind for working toward your financial goals.

3.    To give you a release valve: If you’ve ever been on a diet, you probably know that being too restrictive almost never works. The last thing you want is to derail your progress. So if a small splurge is what’s going to prevent a huge splurge, it’s worth it.

4.    To make yourself happy: Being thoughtful and intentional with your money is the opposite of impulse buying, which people often regret. If there are occasional treats that will actually make you feel good — and not put you into debt — they’re important.

When You Should Hold Off

Too much treating yourself can throw your finances out of whack, keep you from feeling prepared for emergencies, and even leave you feeling guilty and ashamed. The trick is understanding your underlying motivations. Here are key considerations to help you determine when to hold off:

1.    Overspending and adding to debt can increase your stress level. A treat should make you feel good, not anxious and regretful. Plus, being stressed can actually make you vulnerable to more impulse spending, according to the TIAA Institute.

2.    Small expenses add up. Indulgences like coffees out or Uber rides might not feel that expensive, but they add up if you treat yourself a lot.

3.    Emotional spending can leave you gutted. Studies have shown that shopping triggers the release of dopamine, the brain's "feel-good" neurotransmitter. But this mood boost is short-lived, and the subsequent letdown can create almost addictive behaviors. You want to spend again to regain that positive feeling.

4.    Fear of missing out (or FOMO) isn’t a good reason to treat yourself. Impulse buys driven by sales or trends can lead to regret and clutter.

How to Treat Yourself and Keep to Your Budget

Incorporating the occasional indulgence into your financial plan can make you happier and healthier — without compromising financial health. Here are some strategies to treating yourself responsibly:

1.    Allocate a budget. Plan ahead by designating a specific portion of your income for treats. This will ensure they don’t interfere with essential expenses or savings goals.

2.    Be sparing. Treats are only treats because you don’t have them that often. If the novelty wears off, you won’t enjoy them much.

3.    Rely on treats that don’t require money. Get out from behind your desk to walk in nature, visit a local museum on its free admission day, or take a bubble bath or nap. Here are some other fulfilling ways to treat yourself with little or no expense.

4.    Practice mindful spending. Before buying a treat, stop and take a minute to check in with yourself. This will help you make intentional choices and avoid impulsive buying.

5.    Prioritize treating yourself to experiences over things. Doing something — like attending a concert or exploring a new hobby — often provides more lasting satisfaction than a physical item.

6.    Plan (way) ahead for larger indulgences. If you want to treat yourself to a vacation or high-end gadget, make a plan to save incrementally. For example, if your treat costs $2,000 and you have $50 a week of wiggle room in your budget, mark your calendar for 10 months out. You’ll have something great to look forward to.

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Image credit: Bernie Pesko/SoFi Source iStock

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