Todd Christensen Profile Picture
Staff Writer at Debt Reduction Services


Spending when you believe you deserve to, also known as entitlement spending, may be a weakness in your finances.

Budgeting for Entitlement Spending

Picture this: You’ve had a lousy day at work. You’re exhausted. You’ve worked your tail off for your boss, and he/she can hardly remember your name let alone express appreciation for all your hard work.

Now, let’s assume that it’s also payday. Here comes the temptation. Do you go out after work and spend money you don’t have in order to blow off some steam or do you find another avenue for relieving your frustration?

Spending the money you haven’t planned for or that you just plain don’t have, all because you feel you “deserve” to treat yourself to something nice, fun or tasty, is called “Entitlement Spending.” For those who unwind at a bar after work every day, we’re talking about $400 or so a year just for one beer. For those who splurge on clothing once a month, it could be much more than that.

Entitlement spending can also work the other way around, though. Some people feel the same urge to spend when they’ve had a great day. “It’s time to celebrate!”

Here are our tips for dealing with the temptation to fall into the entitlement spending pit:

  1. Add a category to your monthly budget called “free money.” This is not “free” as in no cost, but “free” as in “available.” You can call it whatever you like – “spending money,” or “rough day money,” even “celebration money.”
  2. Set aside a modest amount into this budget category. For some people, it might be $5 per month. For others, it might be $50 or more.
  3. Don’t think of this “free money” as something you’ll spend on anything specific. Rather, this is for those days and times when you want to spend on impulse.
  4. You may want to withdraw the cash from your bank and place it in an envelope in your glove box, purse, or desk drawer.
  5. Just remember to tell yourself that once this money’s gone, that’s all there is for the rest of the month. Try to hold onto it until the last week. By then, you’ll realize that you really don’t even want to spend money as a way to blow off steam.
  6. Seeing your savings account grow can be a reward in and of itself.

Finally, my favorite way of looking at Entitlement Spending, especially given that we hear a lot of people try to justify it by saying, “I deserved it,” is this:

Telling yourself you deserve to spend money you don’t have after a rough day is like smashing your thumb with a hammer and then saying you deserve to give yourself a puncture wound to go with it.

Do You Have Questions About Controlling Your Entitlement Spending?

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If you need more information on budgeting for your entitlement spending or have any other questions about improving your personal finances, please feel free to comment below and we’ll answer as right away!

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