This post is by new staff writer Honey Smith.

One of my goals in taking a hard look at my budget is not to do too much at once. I want to make sure my changes stick and avoid making repaying debt an obsession.

You can read about the first budget category I examined, life insurance, here. That one tiny change ended up being instrumental in my quest to pay off my credit card debt, which was very exciting.

Also in that post, I mentioned that some of the “extra” money I squeezed out of my monthly budget was the $40 adult allowance I give myself.

Some of the money gets spent on things like going to the used-book store or buying a new article of clothing from Goodwill. However, about half of this cash allowance is reliably spent on one of my weaknesses: food. Namely, bagels (not grocery store bagels, bagel-shop bagels).

Alternatives to bagel-shop bagels

Astute readers pointed out in the comments that there must surely be a less expensive way to indulge my bagel habit (which, actually, is more of a cream cheese habit — I am addicted to the jalapeno-flavored cream cheese at this particular chain). Indeed, this is the case:

  • I could buy day-old bagels from the bagel shop
  • I could buy grocery store brand bagels
  • I could make my own bagels
  • I could buy the flavored cream cheese from the bagel shop by the tub
  • I could make my own jalapeno-flavored cream cheese

I will probably actually try making my own bagels at some point, more because I am a hobby chef than anything else. Sadly, buying the flavored cream cheese by the tub at the bagel shop is not an option, since this is the ONLY FLAVOR they don’t sell this way. Presumably this is the case because only lunatics from the Southwest eat jalapenos for breakfast. (Actually, if I could put jalapenos in everything, I probably would.)

However, I could probably halve my bagel costs using some or all of the strategies above. But as J.D. has pointed out many times, it’s more about the mind than it is about the math. To get to the bottom of my bagel budget, I have to ask myself: why do I buy bagels from the bagel shop in the first place?

What bagels mean to me

Yes, fresh-made bagels and zesty cream cheese are delicious. But there are other reasons I frequent this shop. First, it gets me out of the office for a bit during the nicest part of the day. Second, it feels like a luxury to have something hot and fresh I did not make — for less than $3 a pop.

Bagel photo by Evan AmosOn the other hand, there are also reasons that I bring my breakfast to work most mornings. It is obviously less expensive to have instant oatmeal or some Greek yogurt. Additionally, those options are significantly healthier than the bagel. (Both the Greek yogurt I like and the instant oatmeal I use have about half as many calories as the bagel alone. Lord knows how many calories are in the cream cheese, since they know me by name at the shop and usually give me extra!)

In other words, it’s not just my wallet that says “don’t buy a bagel every day.” My waistline agrees. And, as it turns out, that’s EXACTLY the reason I want them to stay a somewhat-expensive indulgence. That, and I want to avoid frugality burnout.

If I spend half my monthly allowance on bagels, that’s $5 per week. At slightly less than $3 per slice of heaven bagel with cream cheese, I can enjoy toasted goodness 1.6 times per week. This means that sometimes I have only one bagel per week, and never more than two. If I decreased the cost of each bagel, what would probably happen?

I’d say to myself, “Oh, goodie! I can eat more bagels!”

Yes, the appropriate personal-finance-blogger thing to say is that I’d pocket that extra $10 per month and snowflake it into debt repayment. I know myself, however, and that’s not what would happen. Instead, I am deliberately keeping my bagels expensive in order to erect a passive barrier to eating so many.

I hadn’t explicitly thought of it this way prior to writing this post, but it’s what I’ve been doing subconsciously all along. I’m creating a balance between how expensive bagels are, the value I get out of the experience of eating one, and what a poor nutritional choice they are.

To me, $20 a month balances the financial scales quite nicely — without tipping the literal scales too far in a direction I don’t want to go.

Other indulgences

Once I did think of it this way, it occurred to me that there are probably other indulgences that I could take the same approach to. What about beer?

Currently, I have a beer most nights after I get home from work. Because I like craft microbrews, on average we are probably talking $7.99 plus tax per six pack. At one six pack a week, that’s about $35 per month.

Under the current system, each beer costs about $1.33. However, I’m also drinking that beer alone at my house. Ironically, probably while watching The Bachelor or The Biggest Loser. I’m also consuming 24 of them per month. Hello, calories and antisocial lameness!

Now let’s say I take that $35 per month out of the grocery budget and give it to myself as allowance, to be spent on happy hours with friends. A craft bottle or draft costs about $4 during happy hour, which becomes $5 or so when you include the tip. Now for the same amount of money, I am drinking seven beers per month.

Whoa. That’s a 70 percent reduction in the number of beers consumed, plus in this scenario I am getting out of the house and being more social. Is it the most frugal choice? No. But it doesn’t increase my costs either, and is healthier all the way around. I’ll take it.

What about you?

What’s your favorite small splurge? Pumpkin spice lattes (I don’t drink coffee but hear they’re out of this world)? Energy drinks? Movies at the theater? Are you always scouting the absolute best deal on every single purchase, or is there merit in the idea that by keeping something on the expensive side, it stays a rare treat? Call me a nosy pepper — jalapeno business!

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