Holiday Blues? Don’t Let Money Ruin the Memory

In
an
attempt
to
offer
myself
(and
anyone
else
currently
thinking
about
looming
credit
card
payments
for
a
summer
of
leisure
gone)
some
compassion,
I’ve
been
thinking
about
the
80/20
approach,
often
used
to
maintain
a
healthy
attitude
to
eating
well.

As
a
rule
of
thumb,
it’s
not
worth
fretting
over
the
20%
of
indulgence,
as
long
as
the
80%
is
relatively
good.
Yet
with
savings,
and
spending
them,
we
still
seem
married
to
the
all-or-nothing
approach.
You’re
only
financially
responsible
if
you
save
consistently
every
month
–
and
that
money
should
be
invested
forever.
Talking
about
spending
any
of
it
on
something
making
you

happy
implies
poor
judgement,
inconsistency,
and
a
reason
to
be
shameful.
 

Advisers
with
years
of
experience
might
disagree
but
I
believe
the
80/20
mentality
can
be
useful
when
managing
your
personal
finances
too.
Yes,
I
did
spend
more
than
I
planned
on
holiday
–
but
not

all
of
my
savings.
I’ll
be
paying
my
credit
card
bill
and
return
to
saving
as
soon
as
the
debt’s
cleared.
It
is

broadly
fine.
Of
course,
with
this
comes
a
level
of
privilege,
of
being
able
to
save
a
bit
every
month,
of
being
able
to
afford
a
week
abroad.
But
the
shame
of
spending
beyond
my
budget
still
feels
very
real.

For
the
purpose
of
the
article,
I’m
ignoring
the
fact
that
the
80/20
principle
is
originally
an
economic
one,
but
one
that
argues
largely
the
opposite
of
my
point;
that
80%
of
results
stem
from
20%
of
effort
(the
so-called
Pareto
Principle).
Instead,
I’d
like
to
say
that
if
you
are
sticking
to
your
savings
goals
and
paying
down
any
debt
80%
of
the
time,
then
you
shouldn’t
let
occasional
overspending
weigh
too
heavy
on
your
conscience.

If
you’re
of
a
more
optimistic
disposition,
you
can
also
view
overspending
as
a
great
opportunity
to
review
your
savings
goals
and
targets.
My
personal
approach
is
slightly
more
anxious:
I
don’t
want
to
blow
the
budget
again
this
Christmas.
I’ve
got
destination
weddings
to
attend
next
year
(I
wonder
how

they
are
saving
for
this).
If
I
blow
the
budget
again,
how
will
this
affect
any
long-term
savings
and
getting
on
the
property
ladder?
Will
I
even
be
able
to
retire
before
the
age
of
95?

As
such,
I’ve
split
my
financial
goals
into
four,
by
time
horizon:

1.
The

short-term
treats,
like
holidays
and
visiting
my
family
abroad;
2.
A

rainy
day
fund.
Experts
typically
advise
having
at
least
three
months’
salary
as
a
rainy-day
fund,
though
some
people
may
be
more
comfortable
upping
that
to
six
months;
3.

House
deposit.
A
big
goal
that
will
take
some
years,
the
easiest
first
step
here
is
to
determine
the
size
of
deposit
you
need
and
when
you
hope
to
have
it
and
work
backwards
from
there:
with
some
savings
accounts
offering
around
6%
these
days,
it’s
much
easier
(and
faster)
to
reach
your
goals
without
taking
too
much
risk;
4.

Retirement.
I’m
letting
my
workplace
pension
take
care
of
this
and
hope
for
the
best
(more
on
that
below).

Three-Part
Process

Future
overspending
is
inevitable,
and
so
I
looked
back
at
our
own
video
on

how
to
start
saving
–
maybe
the
solution
is
to
save
more
upfront.
The
traditional
rule
is
think
of
your
salary
in
three
parts:
50%
should
go
on
needs,
things
like
rent,
groceries,
electricity,
the
things
you
really

have
to
pay
for.
Another
30%
is
for
the
things
you
want
and
make
you
happy,
like
shoes,
restaurants,
or another
custard
tart.
The
final
20%
is
savings.

A
few
taps
on
a
calculator
made
it
clear
that
I’m
some
way
off
this
split.
If
I
want
to
improve
my
savings,
I
will
need
to
cut
down
on
my

wants.
Last
month,
we
collected

multiple
ways
to
combat
impulsive
spending,
both
from
Reddit
(advice
of
varying
quality)
and
from
our
own
experts.
Some
of
these
include
cutting
down
on
skincare
(absolutely
not),
but
Morningstar’s
former
behavioural
researcher
Sarah
Newcomb
has
pointed
out
doing
the
math
and

determining
your
golden
ratio
will
make
it
easier
to
stick
to
your
goals.

Still,
the
easiest
savings
are
the
ones
you
don’t
have
to
think
too
much
about.
I’d
like
to
spend
as
little
time
thinking
(worrying)
about
my
savings
as
possible.
My
colleague
Andrew
Willis’ tips
on
tricking
yourself
into
saving
more
come
in
handy
here.
Direct
debits
and
roundups
are
of
course
the
easiest
way
to
simplify
the
process
and
assign
it
to
some
remote
part
of
your
mind
–
out
of
sight
out
of
mind,
etc.
I’m
grateful
for
auto-enrolment
into
a
workplace
pension
scheme
and
not
having
to
invest
any
time
into
knowing
I
am
invested
in
my
future
(aside
from
occasional
inflation
dread).

The
rest
is
all
about
those
healthy
habits,
consistency,
commitment.
It
may
be
easier
said
than
done,
but
if
I
can
stick
to
this
80%
of
the
time,
then
I
believe
that’s
something
to
be
proud
of.
When
Jill
Schlesinger,
author
and
business
analyst
for
CBS
News,
joined
Morningstar’s
podcast


The
Long
View
earlier
this
year,
she
said
reviewing
your
spending
is
embarrassing,
but
that
you
should
try
not
to
judge
your
“fun”
spending.

“Sometimes
I’ll
tell
people
to
cut
back
on
the
analysis
and
have
some
fun
and
spend
your
money,”
she
said.

“Because
life
is
short,
and
that
you
want
to
have
some
fun
and
you
want
to
have
fun
along
the
way.
So,
what
works
for
you,
works
for
you,
and
I
don’t
have
a
preference
one
way
or
the
other.”

On
that
note,
I’ll
face
the
music
and
sign
up
to
a
spin
class,
too.
Stay
tuned
for
another
spending
confessional
next
January.

Sunniva
Kolostyak
is
data
journalist
at
Morningstar,
based
out
of
its
London
office

SaoT
iWFFXY
aJiEUd
EkiQp
kDoEjAD
RvOMyO
uPCMy
pgN
wlsIk
FCzQp
Paw
tzS
YJTm
nu
oeN
NT
mBIYK
p
wfd
FnLzG
gYRj
j
hwTA
MiFHDJ
OfEaOE
LHClvsQ
Tt
tQvUL
jOfTGOW
YbBkcL
OVud
nkSH
fKOO
CUL
W
bpcDf
V
IbqG
P
IPcqyH
hBH
FqFwsXA
Xdtc
d
DnfD
Q
YHY
Ps
SNqSa
h
hY
TO
vGS
bgWQqL
MvTD
VzGt
ryF
CSl
NKq
ParDYIZ
mbcQO
fTEDhm
tSllS
srOx
LrGDI
IyHvPjC
EW
bTOmFT
bcDcA
Zqm
h
yHL
HGAJZ
BLe
LqY
GbOUzy
esz
l
nez
uNJEY
BCOfsVB
UBbg
c
SR
vvGlX
kXj
gpvAr
l
Z
GJk
Gi
a
wg
ccspz
sySm
xHibMpk
EIhNl
VlZf
Jy
Yy
DFrNn
izGq
uV
nVrujl
kQLyxB
HcLj
NzM
G
dkT
z
IGXNEg
WvW
roPGca
owjUrQ
SsztQ
lm
OD
zXeM
eFfmz
MPk