Sometimes, the reality of personal finances can be tense and stressful. Sometimes, a quirky and helpful way of looking at and understanding personal finance goals can be motivation to see them through. Basically, the writer argues, you can do a lot for your overall mental and financial health by recognizing and understanding your financial vices.

What is a Financial Vice?

Financial vices are those things that we spend money on that are very important to us—but may seem silly to other people. One person’s vice might be new books, while another’s might be collectible action figures.

The point is, vices are something you’re willing to splurge on. And, if you’re able to, you should. After all, adjusting our spending habits so that you have money for the things that really make you happy is the whole point of developing a budget.

Identifying Financial Vices

Keep in mind, though, that you can’t just claim every item you want is a vice and should be purchased. True vices should meet these criteria:

• Lasting: Is this something that is important to you every (or almost every) day? For example, a gym membership you use often and feel the benefits of constantly may qualify, but a daily donut may not (no matter how good it smells).
• Consistent with goals: Will this expense allow you to stay on track with your larger financial and life goals? For example, that gym membership may keep you better focused and motivated at work, while the donut purchase might just drain your food budget.
• Contained: Financial vices shouldn’t end up taking over your life or ruin your budget, so be wary of expenses that have an addictive quality (gambling, drugs/alcohol, elaborate video games, etc.).
• Acceptable to all involved parties: If you’re living the single life, this one doesn’t really apply to you, but if you’re in a relationship or family, it’s important. If you cannot convince a partner that your vice is worthwhile, you may need to reevaluate how much you need and want it in your life.

So take a look at your current spending habits and see if you can identify your true financial vices. Then you can commit yourself to making room in your spending plan for them. Cutting a few vices can mean the difference between bankruptcy and a manageable budget!

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