Do You Need a Financial Diet?

Playing Is Your Splurging Breaking Your Bank beyond Repair?

ER physician Dr. Travis Stork shares that 42% of Americans have less than $10,000 saved for retirement yet a new study says they spend an average of $143,280 simply treating themselves. According to the study, Americans spend over $200 per month on non-essentials. Dermatologist Dr. Sonia Batra adds that the study found people under 25 years old were using one-third of their income on luxury items. 

Watch: Doctors Ask Patients to Fund His Retirement?

The Doctors all agree you can treat yourself but it should be in balance with savings for the future. They invite financial expert and New York Times bestselling author of “Rich Bitch” Nicole Lapin to share some tips on how to do just that. 

Nicole tells people to think of a financial diet a lot like a regular diet. Don’t quit splurging cold turkey. Allow yourself small indulgences and you won’t end up binging later on. “Allow yourself the equivalent of a financial Hershey’s kiss, so you don’t end up in the middle of the night noshing on a big old hunk of chocolate cake because you are so hungry and deprived,” says Nicole. 

Nicole continues to equate spending to food. “Think of a spending plan in the same way you would an eating plan. Something that is sustainable.” Nicole breaks down spending into the 3 E’s:

Essentials: 70% on things like housing, transportation and food
End Game: 15% goes towards the future you for things like retirement and savings
Extras: No more than 15% should go to the extras. Whatever you chose to treat yourself with!

Nicole encourages people to splurge on whatever makes them happy, even that morning latte! “If you’re not treating yourself, you’re not stoked about staying on track, and that is what’s going to keep you going.”

Dr. Batra asks Nicole about her per-use fee principal. Nicole explains this is a way to think about material splurges. For example, if you buy a blazer for $200 but you wear it twice a week and if you factor in alterations and dry cleaning, it’s probably about $2 per wear. Now a pricey dress you’re going to wear once… that may not be worth it. 

Nicole adds investing in yourself is one of the best investments you can make. She says the happier you are, the more successful you are, so it can help you in the long run.

Watch: Drs. Rx: How to Stop Spending Money on Takeout

Plastic surgeon Dr. Andrew Ordon tells people to not feel guilty about taking that vacation or going to that occasional special meal out. The Doctors add investing in healthy foods or activities like massages or exercise classes is money well-spent because it will contribute to your health and happiness. Dr. Travis adds something like a mattress, which you spend a third of your life on, is worth a splurge.

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