The "Treat Yourself Tax" Lets You Spend Without Feeling Too Guilty

It’s so hard to get through the day without a little treat. It feels right to pick up an iced matcha in the morning or a cold brew in the afternoon, and just as nice to grab takeout in the evening as a reward for surviving back-to-back meetings. Treats also extend to bigger splurges, of course, like new shoes or a smartwatch — anything you don’t need, but still really want.

When you’re trying to stick to a budget, it often means giving up these types of purchases entirely. Cut to you sadly making coffee at home with tiny kitchen ice cubes, while pining for a store-bought brew. If it makes you sad to go without life’s little luxuries, then you might fall in love with the “treat yourself tax.”

This money-saving hack introduces treats back into your life while simultaneously cushioning your bank account. The idea is this: Whenever you purchase something unnecessary, you take the same dollar amount and transfer it to your savings.

Did you just get a $7 latte? A $30 shirt? A $100 watch? Open up your banking app and move the same amount immediately. In an instant, you’ll get the treat you wanted and so desperately deserved while stowing money away, learning about your spending habits, and more. Keep reading below for all the benefits of the treat yourself tax, according to an expert.

Save More With The “Treat Yourself Tax”

According to Nadia Vanderhall, a financial planner and founder of The Brands and Bands, the treat yourself tax is a mindset shift that helps you stay in line with your budget. “It’s about looking at your money, figuring out what brings you joy — big or small — and building that in on purpose,” she tells Bustle.

Not only does the treat yourself tax allow you to grab a latte when you’re in the mood, but it also means you can go out to dinner with friends, hit up a concert, and put a little fun back into your life. “This is the kind of hack that works because it’s flexible and real,” says Vanderhall. “It helps you stick to your budget without it feeling like punishment.”

It also encourages you to pause before swiping your card. When you think about the tax, “you start to check in with yourself and ask, ‘Do I really want this or am I just stressed or bored?’” she says. “You get more intentional with your money.” If the tax seems excessive, take it as a sign the splurge isn’t worth it.

According to Vanderhall, budgeting isn’t about being miserable, and that’s the biggest takeaway from this trend. “If you can’t enjoy your money at all, it’s harder to stay consistent,” she says. “Not enjoying it can make you resent it. This trend is about staying grounded and connected to your why, even when you’re saving.”

How To Try The “Treat Yourself Tax”

The treat yourself tax is worth a try if you feel overwhelmed by super-tight budgets. “This gives you breathing room,” says Vanderhall. “It’s also good for impulse shoppers because now you’ve got a plan. No guilt, no guessing, just structure. Everyone, no matter the income, can implement this.”

Remember, this is about immediately transferring money into your savings account that matches what you just spent. If you buy $25 movie tickets, move $25 to savings. If you snag a $4 lip balm, send $4 to savings. Over time, you’ll start to see your nest egg grow, and you also might adjust some of your habits.

If it turns out you treat yourself every single day — or even multiple times a day — then you may want to make a change. “The treat also doesn’t have to break the bank,” she says. “It can be a solo movie date, that $12 mascara mini you love, or just something that makes you feel good.”

Source:

Nadia Vanderhall, financial planner, founder of The Brands and Bands