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Rewarding Yourself Along Your Journey to Financial
Success
by Karen Kuebler
I’m a firm believer in rewarding yourself for hard work and
a job well done. Working hard and saving hard can get pretty dreary if you
don’t have some fun along the way. Over the years I have created some reward
systems that help us enjoy our journey.
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I can get pretty goofy with some of my ideas. My ideas range
from low-end (zero cost) to higher-end (spending money on myself). Take the ones
you like and throw out the rest.
 | I really like *instantaneous* rewards. I get excited when I
get coupons for freebies, so it doesn’t take a lot to bring a smile to my
face. I keep a calendar on our bedroom closet wall. At the end of each day,
I evaluate how we did with our financial goals. If we resisted impulse
spending, found resourceful ways to do without, or thought of less expensive
alternatives, etc. I place a star on the calendar. Yes, I buy those colorful
stars like we used to get in Kindergarten when we were good. I guess it
really made an impression on me, because I still love to give myself a star
at the end of the day! |
| We have been budgeting an allowance for ourselves for
years. I think this is *really* important. If you can only budget $5, it
still is money you can choose to spend any way you want without having to
answer to any one. Our allowance used to be pretty low. Sometimes we
budgeted $15 or $20 each per month. At the time we retired, we were each
taking a $25 per month allowance. We have continued to raise it over the
years since we retired. This provides an easy solution when one of us wants
to buy something that isn’t really for the household. My husband still
tries to ‘weedle’ certain items out of household, but if that doesn’t
work he will use his allowance! |
| When I retired my friends at work threw a party for me. One
of my gifts was a great big fat piggy bank! It is very special to me because
they all signed it and it was sort of representative of the way I had lived
my life all those years before retirement. That was the example they always
saw, and it had obviously made a big impression since they gave this to me
as a gift. Of course the piggy bank was empty. But, true to form, I passed
the piggy bank around and my friends contributed a bit of change. I keep it
on a shelf in the closet and empty my change into it each day. I love to
fill it up, count out the money, roll it up and cash it in for something
special. It’s getting pretty heavy again. It’s fun for me to just pick
it up and feel how heavy he is getting every once in awhile. |
| A few years before I retired, I created a "40 Months
to Freedom Calendar" as we were working toward financial freedom. It
was a celebration for me to draw a great big "X" in the box at the
end of each month. I’m a huge fan of visual reminders of goals. They keep
the rewards alive and in sight at all times. |
| Choose rewards that are special to your interests and
tastes. Two of my favorite rewards are facials and massages! Sometimes when
I’m working on a project that is taking a lot of time and effort, I will
schedule a massage to look forward to at the completion. I tend to do this
more when the project is earning some money! The reward should be
commensurate with the work involved. If the task is something smaller, like
organizing a room, then we might plan to go for dinner or to a movie at the
end of the day. When the goal takes several years, such as completing my
MBA, then a dinner won’t cut it! We planned a nice trip to Victoria once I
had completed school. Obviously, you don’t want to short change your
financial goals by spending all of your money. We’ve budgeted for these
rewards because I really believe they are an important part of a
‘holistic’ approach to achieving financial freedom. We’ve been able to
include them in our budget because we live our daily lives very frugally. |
| I keep a ‘creative savings jar’ on a shelf in our
closet. Every time we think of a way to spend less on something we were
going to have to purchase or a service we needed done, I calculate how much
we saved and put the difference in the jar. By doing this, it is amazing how
resourceful we can be. We’ve come up with alternative ways to do things,
have meticulously shopped sales, and have postponed purchases until we find
more cost effective solutions. The money really can add up. In the month of
March we accumulated $100 in the creative savings jar. I colored my own
hair, saved $30, and loved the way it turned out. We were very conservative
with using the car and only used one tank of gas for the month. We put the
cost of one tank, $25, in the jar. We both needed tennis shoes, but waited
for a sale. We found a great sale --buy one pair, get the second pair at
half price and saved $15. We had guests come in from out of town and I
prepared chicken picatta for dinner. I figured we saved $20 by not going out
for a dutch dinner. Probably a conservative estimate on that one ;-). I like
keeping the money in a jar so I can *see* it. Once we save a few hundred I
deposit it into an interest-bearing money market account. Then we start
filling the jar again. We think of something special we want to apply the
money toward, which fuels the motivation to save more. |
| When we retired we started having the dividends earned from
our stocks paid directly to us. We previously reinvested the dividends in
more shares. This is our taxable stock account, and we have to pay taxes on
the dividends even if they are reinvested. We decided we didn’t need to
purchase more shares of these stocks at this point, and we now use the
dividends as a *reward* for our hard work and savings. The money goes into
an ‘entertainment fund’ which we use for our recreational activities. |
| We’ve always made a ‘game’ out of saving for
something special we might want to purchase that will take a chunk of money.
We’ve been doing this for the last 20 years. We used to hold garage sales
and sell items through the classifieds. Now we have Ebay! It has been a
wonderful way to simplify and declutter and get paid for it at the same
time. If I earn money through a consulting assignment, I will put that
towards the special purchase. My husband has done lots of car work, body
repair jobs, and other types of work to earn extra income. He will also sell
some of his collectible items that are sitting on a shelf, hidden from view.
We make trade-offs. Will the new item bring more pleasure and/or value to us
than the item we are going to sell? If yes, then sell! |
| My favorite *reward* is ‘profit sharing.’ I compare our
personal finances to running a business. At the end of the year, if we have
lived within our budget the full year, we should have a surplus. We play a
game each month of ‘beat the budget.’ Our incentive comes at the end of
the year when we divide the surplus into three piles. My husband gets one, I
get one, and we put the third into an ‘entertainment fund’ for the
following year. Think about it. Every time we make a purchase, my husband
says "Am I willing to pay a third of this out of my pocket?" This
has worked great for us! And, it makes sense. If we’ve stayed within our
plan all year, we have already put money aside for savings. We’ve worked
hard and saved hard. Isn’t that what profit sharing is all about? |
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Copyright 2002 by Karen
Kuebler
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