Your Guide To Guilt-free & Responsible Shopping

By krishna, 28 June, 2024


Shopping can be an experience that could give you mixed feelings. You feel the thrill of buying a shiny new item that you have always wanted when you click the "buy" button. But within a few moments or minutes, days or maybe weeks, this feeling gets replaced by guilt, frustration when you finally look at your bank balance.

The Dilemma of Shopping and Saving

If you look online for advice, you will find a plethora of articles that ask you “control that shopping impulse” and save that money, to “live frugally”. The money thus saved could then be invested in a high interest rate financial instrument such as mutual funds or bonds. Compound interest works its magic over a few years and viola, some day in the distant future, you become a millionaire. But becoming a millionaire does not come without its own share of sacrifices. Living the life of a monk is not easy and not desirable. Watching the precious years of your life just fly by while you keep living frugally and then saving, investing, patiently waiting for the day that you become a wealthy person is easier said than done. On the other hand, there isn’t a shortage of articles online that push you to spend your money and live your life. Buy that new iPhone or go to that -vacation abroad that you have always longed for so long. In fact, in today’s consumption-centric world, such behaviour is encouraged. Living your life to the fullest while you are young is the mantra of our generation. But practically speaking, this is a path that usually becomes increasingly difficult as months and years go by. Sooner or later, you find yourself buried under mounds of debt. Or maybe, you look back and wonder that despite earning so much money over the past few years, where did the money go? How come you ended up saving so little despite earning so much over the years?

The Pros and Cons of Both Paths

Clearly, both paths have their own share of pros and cons. The first one asks you to take control of your future and sacrifice your present. The second path demands that you live your present leaving the future at the mercy of the gods / universe ( or whatever it is that you believe in ). Youngsters starting off with their financial life usually get stuck at one of the two paths.

Seeking an Alternative Approach

But what do you do when you want the pros of both paths and want to do away as much as possible with the cons of both paths. Live your life and at the same time save money so that your future isn’t left at the mercy of unseen forces. Answer to this question is a set of financial habits and a strategy that guides you on your financial journey while giving you an indication as to when it is safe to spend so that when you go shopping or on your dream vacation, you are not filled with guilt or regret later.

Understanding Net Worth

One financial term that you need to get acquainted with before we begin discussing the strategy is the term “Networth”. “Networth” is defined as the difference between “assets” ( i.e what you own ) and “liabilities” ( i.e what you owe ). Assets could be anything that have economic value such as cash, gold, fixed deposits in banks, real estate or any investments etc. Whereas, liabilities are loans, credit card debts or in simpler words, money owed to someone. So if you have $10,000 in your bank accounts, $2000 in gold and you own $1000 in credit card debt, your net worth is $10,000 + $2000 - $1000 = $11,000. If you owe more that you own, then your net worth is negative. So if you have $10,000 in your bank account but you owe $30,000 in credit card debt then your net worth is $10,000 - $30,000 = -$20,000.

There are many tools online such as that allow you to calculate and track your net worth easily.

The Strategy: Financial Goal Posts

With the definition of networth clear, let us go ahead with the strategy mentioned above. One such strategy, simply put, is to define yourself financial goal posts in terms of net worth. And it does not matter what amount of money you choose as an indicator. Whenever you reach a goal post, you reward yourself with a maximum of 10% of the current value of your net worth goal post.

Implementing Financial Goal Posts

So, for example, you could define your goal posts with an amount as low as $100. So the day your net worth reaches $100, you reward yourself by shopping online with 10% of $100 i.e $10. You might ask what could you possibly enjoy with a $10 budget but the game gets more interesting as we go ahead. As you go ahead and keep saving to reach the next goal post of say, $500 or $1000, your rewards can be more luxurious as now your budget is 10% of $500 = $50 or 10% of $1000 = $100.

The One-Time Rule

One very important point to be noted here is that a goal post can be used as a reward once and ONLY ONCE. This is the only rule that cannot be violated. This rule ensures that you grow in networth while you keep rewarding yourself.

Setting Appropriate Goal Posts

Something else that is recommended is to keep a distance of at least 10% between your current and next goal post. In fact, if the goal post amount is lower, the difference amount can be as high as 100% or 500%. So you could have the following goal posts : $100, $500, $1000, $2000, $5000, $10,000, $15,000 and so on. If you are starting off with a negative net worth, then your goal posts could look like this : -$20,000, -$15,000, -$10,000, -$5000, $0, $100, $500, $1000, $2000 and so on.

Rewards for Negative Net Worth

If your current goal post is negative, then instead of using the “10% of goalpost” formula to reward yourself, you could use the “10% of difference between your last and current goal post” formula. So, if your last goal post was -$20,000 and you finally reached another goal post of -$15,000 today, you could reward yourself with 10% of difference i.e 10% of ( -$15,000 - ( -$20,000 ) ) = 10% of $5000 = $500.

Using Wishlists

If you accomplished what is mentioned above like a pro, here is something else you could do. Get into this habit of using the “wishlist” features that most shopping apps provide. Every time you feel that urge to shop, simply add it to your “wishlist”. Soon, you will have a list of items in your wishlist that you want to buy. Note down the price of each item and then place them against each goal post. For example, an item worth around $100 in your wishlist could be placed against the $1000 goal post. Another item worth $1000 could be placed against a higher goal post ( the $10,000 goal post ).


Once you start off with this practice of rewarding yourself based on your net worth, you might find yourself moving away from this habit, initially or especially once you reach some significant goal post. But bring yourself back to this habit and we promise you that your days of guilt filled shopping will be a thing of the past.


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