Piggy Bank with Coins

The Guide to Guilt-free Spending

Posted on Posted in Personal Finance, Savings & Spending

This Post Originally Appeared on The Player’s Office.


It was the morning after a night out with friends – we grabbed dinner at one of the top restaurants in the city, shared a $100 bottle of wine at an exclusive hotel lounge and were personally chauffeured in a blacked-out Yukon Uber.

The next morning I not only woke up with a hangover, I also had the spending guilts. You know that feeling when you start doing the math of how much you spent the night before? Or during your recent shopping trip?

I used to get this all the time, until I decided to setup an automated system that allowed for guilt-free spending. Interested? Keep reading.

To reach the point where you can start to spend guilt-free on the things you value most in life (whether that be clothes, restaurants, travel or electronics), you must use the age-old strategy of paying yourself first. Luckily in our modern, tech enhanced world, this is actually really easy. I’ll be teaching you how.

Paying yourself first simply means that when you get paid (bi-weekly, semi-monthly, etc.) you move the cash that is already earmarked for your savings goals immediately from your chequings to your savings accounts, leaving the rest to spend wherever and however you want, guilt-free. Your savings goals might include: saving for that trip to Europe, a new MacBook, or a down payment on your first home.

This is the complete opposite of what most of us do – we usually spend, and then save whatever is left at the end of the month (typically nothing).

Although this is a simple concept, it is actually very hard to maintain this discipline each paycheck. That’s where automation and organization come in.

All of the big banks nowadays have the ability to open multiple, free, online savings accounts right from the comfort of your own home. They also have a feature that allows you to setup an automated savings plan. You choose the frequency, date, $ amount and which account to transfer to and they do the rest. But how do you know how much you should be saving vs. guilt-free spending? Great question.

Book an hour or two on a random weekday night and follow the 5-Steps below to start your guilt-free spending (and savings!) plan.

Step 1: Determine your after-tax monthly income. I like to use these calculators as a quick estimate:


Step 2: What are your guaranteed monthly expenses (rent, car, groceries, student loans, cell-phone, Netflix, etc.)? Set these up on automatic monthly payments if possible. I like to include a $75-100 buffer for unexpected expenses such as trips to the dentist or an oil change.

Step 3: What are your savings goals? Pay off Debt? Vacation? Down Payment? I recommend you save at least 10-15% as long-term savings (note: long-term savings can be put on hold if you have high-interest debt to pay off!). I also recommend saving 2-3% into an Emergency Savings account for large unexpected expenses.

Step 4: Create online savings accounts with your bank and name them after your goals. Everyone should have a Long-term and Emergency Savings account. Setup automatic monthly savings into these accounts to occur 1-2 days after you get paid.

Bank Specific Automated Programs:

  • Tangerine – Automatic Savings Program
  • RBC – Save-Matic
  • TD – Pre-Authorized Savings Services
  • BMO – Automatic Savings
  • Scotia Bank – Automatic Contributions

Step 5: Now that you have setup your automated system, you can determine how much you have left for monthly guilt-free spending. Subtract your monthly guaranteed expenses and savings goals from your after-tax income – the rest is your “personal allowance” for guilt-free spending. Not enough to “enjoy” your life to the fullest? Focus on increasing your income or cutting down on one major expense.

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3 thoughts on “The Guide to Guilt-free Spending

  1. This article has come at the right time. I have just entered into 2017 on a very very strict budget. With your article I have just opened a savings account that I will transfer my guilt free monies into and when that monthly amount is gone I am S.O.L until the next month. Thanks for this amazing advice and I look forward to your next articles!!

  2. Hi there would you mind stating which blog platform you’re
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    P.S My apologies for getting off-topic but I had to ask!

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