Why You NEED Blow Money
| September 20, 2012 | Posted by Roshawn Watson under Personal Finance, psychology |
By Roshawn Watson
There’s an EPIC battle going on. The stakes have never been higher. Your very destiny hangs in the balance. Both sides have experienced warriors, and only ONE will emerge victorious.
I’m speaking of the battle between your self-control and your desires. One of my biggest exposures to this conflict occurred when I was in debt. I went contrary to much of what I read and heard. I insisted on retaining some “blow money” (discretionary funds). In order to achieve my aggressive timetable for paying off my debt, I counted blow money vital. Now, the amount allocated for this was marginal: the pitiful crumbs that I kept for myself paled in comparison to what I gave my debtors (mainly Sallie Mae) each month. However, it provided a degree of balance in an otherwise unbalanced process. I found blow money necessary to maintain my tenacity over the long term. It was my lifeline to normalcy. To this day, I consider blow money an important part of my budget, and to my delight, I recently read a great series of studies supporting why you should have blow money too!
Constant Denial Depletes Your Energy
I know few people who love budgeting. We tolerate budgets. We abide by budgets, but we don’t generally love budgets. Budgets typically require discipline, and until it becomes habitual, budgeting can be downright dreadful. We will be painfully aware of every sacrifice. We will count the days until the misery budget ends. It will require our continual effort. The whole process will feel unnatural. That’s because it is unnatural. If you have budgeted and failed, find solace in the fact that MAYBE YOUR BUDGET WAS RIGGED TO FAIL FROM THE BEGINNING. I know that is a bold statement, but hear me out. Understanding the implications of the following eight words will save you MUCH pain related to budgeting, dieting, and any other activity the requires you to deprive yourself.
Constant denial depletes energy needed to resist temptation.
In other words, you may look the same when you are tired as you do when you are fresh (excluding the dark circles underneath your eyes); however, studies from Baumeister and others have now repeatedly shown that you are NOT the same person. Your will and strength to persist can diminish with constant conflict. Tired eyes rarely see a bright future.
Related Article: How to See a Bright Future
We see many applications of this principle. From detectives wearing down the wills of compelling suspects to divulge incriminating details of their alleged crimes with lengthy interrogations to grocery stores placing the most delectable treats right by the checkout counter, the concept of resource depletion has tangible implications to your overall wellbeing, your waistline, and YOUR WALLET.
One of the things that I found the most interesting about this research was that it apparently did not even matter what area a person was trying to exercise control in, if he had already performed acts of self-control, doing so diminished his ability to exercise control in the future. For example, researchers looked at subjects’ abilities to watch a comedy without permitting themselves to laugh, to resist chocolate chip cookies, to use a handgrip, and to persist in the face of failure on unsolvable anagram.
With respect to budgeting, this means that: without blow money, you are more likely to spend impulsively. After all, the very resources you would use to resist impulsive spending would be depleted through prior efforts to tame your spending beast (aka, prior denials).
Blow Money Can Replete Your Energy
One of the biggest reasons why having “blow money” works is because it allows you to strategically deviate from the savings, investing, and (sometimes) giving script with minimal, if any, harm to your overall goals. Conceptually, I consider blow money the same as having weekly “free day” as a part of a healthy diet. As anyone who has been on one can attest, diets can be very difficult to abide by. Indeed, the diet industry would not be a $60 billion industry if diets were easy. Some of the best advice I have heard regarding dieting is to allow yourself a “free day:” a day when you can eat anything in any quantity you want. Part of the rationale behind the free day is that: if you had to eat healthy ALL the time, even when many of your friends and family are chowing down on all sorts of deliciousness during weekend outings, holidays, and special occasions, then your diet is impractical. One reason is that such a diet isolates you, and that in itself weakens you. The same is true for your budget. If your budget alienates you from any fun, what incentive would you have to stick with it? Another reason this diet sucks is because you would become MORE sensitive to the effects of high-sugar, high-calorie treats. Believe it or not, I’m not just referring to the psychological impact of such deprivation. Biologically, data in rats suggest that deprivation leads to increased sensitization to bad foods. If impractical diets are unsustainable, why would anyone think impractical budgets would work?
Diets are to eating plans, what budgets are to spending plans, and if having an free day, where you enjoy yourself, is considered a vital part of a reasonable diet, then shouldn’t the same apply to budgets?
Interestingly enough, I often find that I am more motivated after changing things up, as it kind of allows time to take a step away from the mechanics and gain a better, more objective, perspective of the best plan forward. Financially speaking, “blow money” serves to reawaken you to why you save in the first place. That way, you can approach subsequent challenges to your budget from a position of strength rather than one of depletion.
Related Article: Why Do We Save Anyway
Blow Money Neutralizes the “Well, I Already Screwed Up” Scenario
Another interesting rationale for keeping blow money a part of your budget is that it absolutely neutralizes the “well, I already screwed up” mentality. This behavior was described well by Polivy and colleagues. It occurs when you screw up from a plan (i.e., budget or diet), feel embarrassed about or ashamed of your mistake, and then count the day’s efforts to control yourself entirely lost because you already dropped the ball. Consequently, you let yourself go (lose control) even further. In other words, if your willpower isn’t enough to prevent you from partaking in a cookie, you are likely to get a double hamburger with cheese fries and a milkshake too.
Once you flirt with chaos, it has a way of owning you.
This is equally true with budgeting. Once you lose control, often it is hard to find yourself again. When you don’t have blow money, you are wrestling with the pleasure you feel from satiating your desires through impulse splurges and the guilt that you have over deviating from your budget. This is obviously a weak and unhealthy position to place yourself.
Of course, that doesn’t have to be the case. For example, if you include “blow money” as a part of your spending plan (budget), then when you blow money on something that you deem “fun,” you haven’t messed up. This spending was already budgeted for. There wouldn’t be the same excuses to abandon your budget if you included blow money in your budget in the first place.
Related Article: The Dreaded B Word
Closing Thoughts
Budgets certainly do not have to be swear words in your house. Successful budgeters remember to establish some flexibility to their maintenance plan based on their needs, such as “blow money.” They don’t risk not achieving their spending goals by having unrealistic budgets that only work if everything goes perfectly and if they deny themselves fun from today until retirement! They systematize their saving, investing, AND spending. They don’t expend so much energy resisting temptation that they lose sight of why they save anyway!
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Image Credit: Images of Money
Another wonderful post! Well done.
Years ago, I went on a spiritual financial retreat. This retreat was for people who were dealing with codependency issues and money.
I remember one of the speakers talking about verbiage and money. Words can be the cause of stress in our lives and if we can change our words, we can change our financial lives. Two of her examples are the words budget and goal. She reasoned that if we replace budget with financial plan and goal with a financial process, these new terms remove stress and give us hope. Budget is too restricting and goal is too lofty (think of a goal post).
The terms financial plan and process represent movement and change.
I took her advice and have never looked back.
Thanks so much Steven for the kind words and for sharing what you learned in the conference!!!!
I can definitely understand how changing the words can give you a completely different feeling. This reminds me of why I don't really personally say the word diet any more. I despise the word, as it doesn't evoke a warm feeling. I think of deprivation, and that is unpleasant. However, eating plan or lifestyle modification have totally different rings to it. It doesn't seem temporary. It seems like a positive change, just like the "financial plan" and process.
Everyone has to find the right lifestyle that can keep them happy. It's like dieting. You don't want to do the yo yo diets. You need to create a sustainable plan so you can manage your weight. Personal finance is similar. You don't want to live such a spartan lifestyle that you feel unfulfilled. Blow money is the pressure valve. We get a bit of cash every week to spend however we want to. I can save that cash up to buy bigger purchases or just spend it on lunch. It help us keep to our frugal lifestyle in the long run.
That's pretty easy to understand. It is about long-term decisions versus a short term fix. When you have the distant future on your mind, things like sustainability begin to have more meaning. When I read your comment, it brings to light that this is a lifestyle consisting of a series of good decisions versus a momentary sacrifice.
YEP I couldn't agree more. I was just thinking of all the things I'm holding off on purchasing until the next debt is paid off, and I thought, well, I'm not going to be able to buy all of those things if I want to continue building my net worth!
That's a very awesome example! Trying to have it all at once can be incredibly taxing, if it is even possible for your situation. That's the reason I like how you are so goal oriented. You reward yourself as you hit your goals. That's such a healthy way to eliminate debt, particularly a large amount of debt.
Good work Shawn. I'm going to blow some money really soon, on a tablet computer – and I can't wait! I've been planning to blow it on a tablet for a couple of years, so I know I'm ready, and about to burst. It's a great feeling because I know I can genuinely afford to blow it, but I'm still not sure if I want to just yet. What a great position to be in. I might just wait a bit longer though….
Thanks so much Drew!
That's an awesome purchase! I love tablet PCs but haven't yet been sold on tablets as standalone media consumption devices yet . My reservations probably have more to do with me not really having a place for them in my life rather than their utility. That said, they keep on getting better and better.As I was looking at the new Kindle Fires, I would be lying if I didn't acknowledge that they were tempting. Good luck on the purchase!!!!
Spot on. We budget for shopping each month after determining what we will make/need to pay on debt repayment to stay on track, etc. This way, we don't beat ourselves up if we buy something, but we also get to high-five ourselves when we're way below it! Last month, I decided I didn't *really* need a new pair of jeans like I'd budgeted for, so ended up saving the $60 I set aside for it. That made me very proud of myself.
-M
Michelle,
You definitely should be proud of yourself. I definitely have to force myself to spend on myself at times. It is easier to set something aside than spend it at times, so I definitely know where you are coming from. I try to still keep unspent blow money separate so when the time comes to spend it, I am already mentally detached from it.
I so agree with this! One of the things we did when we started on this journey was to start an 'I'm so worth it' account – every month 6-8 % of our regular income goes in it and the condition is that this has to be spend during the month. Some months we don't – but the opportunity is always there. The result?
Even when we started with an enormous debt we still felt human; feeling human and strong meant we can focus on what matters – increasing income and reducing debt. In there years we have paid off over $130,000 (there is a bit more left nut will be paid off by early spring next year) – this is the reduction not how much we have paid (you have to account for the interest). I attribute the fact we have done so well to always provifding for fun (my PF Olympics finalist post was about this).
Maria,
I love this! That is an incredible amount to pay off, and for you to still be setting aside a significant portion for yourself… BRAVO!
I love how you said that it keeps you human. For me, it was a lifeline too. It is amazing how difficult it can be to pay off considerable sums. Unless you go through it, it is hard to even fully appreciate.
I have my blow money budgeted as fun money and sometimes it just accumulates and accumulates and that is OK with me. I'll have it when I need it. My girlfriend likes to spend her more and that's fine too. It is for whatever we want it to be for and no interfere with how we spend our own.
Lance,
I accumulate blow money too 🙂 It sounds like you find comfort in knowing that it is there when you are ready for it. Based on the different spending habits, I wonder if you and your GF have different money personalities. Fun stuff!
I don't know about "blow" money, but I am planning a little weekend away. I gave up my vacation this year and I need a little time away. A couple nights at the beach may be just enough to recharge. Is this blow money?
Oh, I think this qualifies as discretionary funds for sure. Blow money just has a nice ring to it. I just spent an extended weekend in Canada, so I can vouch that a little bit of R&R is just what the doctor ordered. Have fun!!!
Good points on the negative decision balance. I recently read Baumeister's book on willpower. Amazing to see so many of the studies and insights apply to everyday life.
Thanks so much! Much of his research is absolutely fascinating and directly applicable to our lives, just like you say.
Wonderful article and beautiful comments. I had a great time reading the article. Thanks.
Thank you Finance Fox. I appreciate you stopping by and letting me know. Best Regards!
I absolutely agree with what you wrote about "well, I already blew it" – whenever I make a small, unplanned purchase, I find myself trying to talk myself into a bigger, even MORE budget-busting purchase. We need to budget for blow money – we have disposable income (finally – not much, but even $20 can make you feel rich after years of going without!).
I concur. It is just like you go on all veggie diet (not recommended), then a single scoop of ice cream would be absolutely precious to you.
We have a budget but we constantly review it and update it to make sure it is realistic. We have also built in a fun spending category that gets allotted so many funds per month. This gives the freedom to spend money on the splurges and not go over for the month. It works really well and we never feel under pressure.
[…] @ Watson Inc writes eloquently on willpower and the need to have blow money (*). Bonus: a reference to Roy Baumeister’s research on […]
You are rock stars!!! That sounds like a well-oiled machine! That's going to make you a powerful force to be reckoned with because doing this consistently allows you to build some serious wealth.
Everyone else said such intelligent things I wanted to say….so I'll just say this:
Was I the only one that read the title a whole different way? I thought Roshawn's pharmacological background was finally entering his posts…. 😉
Haha. Too funny! No, this is about money that you can "blow" not a tongue in cheek reference to anything else 🙂
[…] Related article: Why You NEED Blow Money […]
[…] Watson Inc – Why You NEED Blow Money […]
There is always something interesting to read on your blog. I trace my money through my budget system. But you know we are human and can make mistakes very easily.
Sometimes when I purchase something without any planning, it really get me in trouble and I have to find new ways to get on track.
Thank you so much!!!
I feel you when you say we're all human. I think that part of the reason to note common behaviors and stop holding ourselves to standards that are not reasonable. The challenge is often what are we likely to do and what do we want to do. If our budget only focuses on what we want to do and ignores what we're likely to do, we can get into a lot of trouble! Great comment!!!
When you use "discretionary spending" I agree with you but I hate the term "blow money." It makes me think of grinding money up in a garbage disposal – and worse yet, not recording the ground-up money as a transaction in Mint! I've never been in an intense debt payoff mode so I've sought a balance among needs, savings, and discretionary spending. But I equate "blow" with "waste" and my husband and I don't do that. We are very conscious to choose "want" activities and purchases so that they will provide the most value possible for our money. Maybe if we had high incomes we could feel free to waste money but that's not where we are now.
Oh, and I disagree about having "free days" when on a diet unless your intention is to fail. A proper diet is a lifestyle change and you don't get days off from your life!
Can you tell I have a bit of an extreme and rigid personality? 😉
I think its great to have some "blow money" after of course you have decided on how much you are going to save. My wife and I came up with an amount that we both are allowed to spend each month on whatever. No fussing no arguments. Just spend it on whatever you heart desires. It makes saving, working, and living worth while. If you want a pair of shoes, clothing, etc you use the extra money each has to get it. The key is not just blowing all your money.
This is a fantastic post! And it truly makes sense. Definitely a fitting way to manage and spend at the same time without the guilt
Thanks Mark. I appreciate your comment. I'm all about guilt-free, responsible spending.
I do believe that the psychological aspect plays an important role in making and spendig money. Whereas everyone recommends strict budgeting, I'd rather say that bowin money might be more effective. Thanks for this inspiring share.