Is it possible to spend money, guilt-free?

Life is good. You’re stocking away money automatically every month into your investments, you’ve built up your emergency fund, you’re chunking away at your mortgage and your net worth is slowly climbing monthly from the systems we’ve put in place.

You now find yourself with money left over every month and ask yourself – where should I put this? As mom and dad said ‘always save for a rainy day’ right?  Well, what if we start using that money now. What if we allocate a portion of our monthly income to spend guilt-free.

In my experience, when people cross $150,000 of income, they stop carefully tracking expenses. (This is fine! At 150k you can loosen up. You don’t need to track the price of a coffee.)

However, there are 3 problem areas I see for expenses above 150k income:

1. They’re spending more but STILL stressed out about money! This is because most people don’t save and invest based on percentages. If they saved $700/month before, they don’t adjust their savings rate to be higher. It should! If you track your expenses by % you’ll be able to save more, invest more, and even SPEND more.
2. Because they stop tracking, their costs increase substantially on eating and travel. I’ll ask them about travel. Their response: “It’s not like we travel all the time!” But if they dig into actual spending, they took 6 vacations, including mini trips and because they make more money, they didn’t track their spending on any of them. These add up.
3. They almost never stop to celebrate and decide what their new Rich Life is. 150k is a lot of money! Do you still want to eat at the same restaurants? Do you want to hire a cleaner for the home? Or tip more at your favourite local restaurants? Or save for a special anniversary vacation? Most of us simply “slide” into the next phase of our financial lives without taking a second to stop and appreciate and plan what the next chapter of our Rich Life could be.

If your income has increased beyond 150k, what do you notice about your spending?

Use these 4 numbers. As your income increases, these benchmarks will help you save, invest, and even spend more:
Fixed costs: 50-60% of take-home pay
Savings: 10-20% (the more the better)
Guilt Free Spending: 20-30%

Life is lived outside of a spreadsheet and guilt-free spending is something that isn’t talked about often. What is the most common financial advice? Save, cut out your Netflix, and drink coffee at home. Hardly anyone talks about conscious spending. I urge you to look at your finances to determine where you can find money every month to spend guilt-free. Start small – maybe hire help around the house, take a spa day, pick your kids up from school every day for a month, and fly premium economy for your next trip.

This is your one life, why not make it a Rich one?