Posted by Mike Smith :: June 4, 2008 @ 6:17 am

Having good financial habits can be hard work. Occasionally rewarding yourself helps to make the effort seem worthwhile and gives you motivation to continue your frugal ways. Even though you could save more money by not rewarding yourself, if a small indulgence allows you to keep up your good habits, it might save you more in the long run.

Living frugally doesn't mean that you aren't allowed to spend any money. In fact, being thrifty with money allows you to afford things that would otherwise be out of your reach without borrowing money. There's nothing wrong with financing purchases, particularly if you use an affordable option like a peer-to-peer loan, but making smaller purchases with cash that you've saved is also very satisfying.

Here's an example of how to reward your good behavior:

Eating meals out can really put a drain on your budget. By refraining from eating out regularly, you not only save money, but also make the times when you do eat out more enjoyable. I always find that having a rare night out at a nice restaurant is much more satisfying than eating out more often at a casual place. You don't need to go to a fancy place to have a good time, but if you have good habits, you can choose to eat wherever you like. Fancy doesn't have to mean expensive. Many restaurants offer specials on certain nights. Getting a deal while rewarding your good behavior serves its purpose while relieving you of spender's guilt.

Seeing friends and family spending beyond their means and doing things that you choose not to can be a frustrating experience. Telling yourself that you will be much better off in the long run, while true, only gets you so far. An occasional reward for your good behavior won't throw off your long-term plan and may be just what you need to persevere.