By Katherine McLaughlin
Sept. 7, 2021
For as long as I've understood money, I've felt guilty for spending it. Even as a child, when I'd save birthday money and chore allowance, I felt a pang every time I went to a cash register and slowly counted out bills from my orange and red wallet with the elephant on the front.
- I used to feel guilty every time I spent money on a "want," even though I could afford to.
- It was bad for my mental health, so I opened two checking accounts: one for essentials, one for fun.
- Now, I know exactly how much I can spend — and the rest goes to savings.
As I've grown older, this guilt hasn't left me. No matter how much I try, I still feel a stab in my stomach when I swipe my debit card for more than $50 — it's even worse if it's something I don't need.
Despite being "good" with my money, I didn't have a good relationship with it. It felt more controlling than liberating, and all of my "responsible" choices felt like they were for nothing when I couldn't enjoy the benefits of making them.
Sometimes this extreme frugality has led to a complete financial breakdown, where the constraints I placed on myself became unsustainable to the point that I just dropped them.
Eventually, being the type-A person that I am, I wanted to create a system that would allow me to spend more freely without the internal blame I kept projecting onto myself. But I quickly realized the tool I was using to help me manage my spending was actually making me save significantly more money, too.
I opened a second checking account for fun and non-essential purchases
I decided I wanted to open a second checking account specifically for spending money on fun and non-essential items. Right now, I mainly use it when I want to eat out or order food, the occasional clothing purchase, and for home decor items. One day, I hope to be able to also use this account to pay for travel, too.
I wanted an account that had essentially no rules. It would be for me to use however and whenever I wanted, so long as there was money in it.
While I don't put a large portion of my income into this account, my spending guilt did slowly leave me once I started using it. I felt much more confident buying things for myself knowing I had a whole other checking account that was fully funded for all of my essential spending.
I automated my paychecks to instantly deposit money into my various accounts
As soon as I opened up a second checking account, I automated my paychecks so they're instantly split between my different accounts. Right now, I put 50% into my essential checking, 25% into my savings account, 10% towards investments, and 15% into my fun account.
Before dividing up my percentages, I tracked my spending penny for penny over a few months to get a very clear picture of how much money I needed at the minimum to live, and then how much felt like a realistic amount to let myself use freely while maintaining my savings goals.
With the money automatically going where it needs to, I can't overspend even if I want to. This security has made it easier for me to feel confident with the purchases I do want to make.
Ironically enough though, while I did this with the idea of spending money, it's helped me save more than ever before.
I'm saving more because I'm putting less in total into my two checking accounts
When I only had one checking account, despite my best intentions, I was putting too much money into it. I was worried that I'd accidentally overspend on something fun and then have to take money out of my savings to pay for an unexpected bill or expense. Because of this, I overfunded my checking account, then seeing the money in the account gave me the idea that it was OK to spend it.
While I didn't realize it at the time, I was subconsciously doing this because I didn't have a true grasp on how I was using any of my money — whether it was a necessary purchase or not.
By separating my spendable money into two accounts, I can very easily see where I stand at any point in the month. I know when I can splurge on Whole Foods instead of Trader Joe's in the same way I know when I can buy the new shirt I want and when it's time to put it back on the rack. This easy awareness without the need to track every purchase has not only made my spending simpler, but streamlined my savings goals, too.
Using this system, I've been able to put aside an additional $200 to $300 a month on top of what I was already saving. Over the course of the year, this will be an additional $2,400-$3,600. On my relatively lower entry-level salary, these additional savings are substantial.
I still track my spending at the end of the month to see if I should make any changes to my income distribution
While I don't track every purchase the moment I make it anymore, I still track my overall monthly spending. I look at both what I spent money on that was essential and what was fun and look for ways to cut back.
While I'm happy with the progress I'm making, my goal is to be able to put aside more money each month, closer to 40% of my income. Of course, there are some things I know I can't immediately make cheaper — my rent being a big one — but I'm still looking at both essential and non-essential items for places where I can spend less.
My spending guilt hasn't completely disappeared, but it has definitely minimized. I'm working every day to find ways to enjoy the money I earn while still making smart decisions, but I've learned I spend most confidently when I save confidently. This system allows me to do both.
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