Most personal finance experts say not to buy anything you don’t need. pay off debt. But who doesn’t want to give up all the fun of spending and have nothing to look forward to? Not me.

I’m constantly tracking every penny and slapping myself on the wrist over budget It didn’t make me want to spend less – it just made me feel worse when I did. Plus, limiting my spending actually made me want to spend MoreIt traps me in a spend-and-restrict cycle. Now I’m a money coachI understand why. This approach is not sustainable and does not address the real problem.

I finally ditched the classic tips and created my own spending rule. I I changed the way I think about spendingand it helped me reduce my spending without giving up on the things I wanted (or wanted) to buy. It also allowed me to set ambitious financial goals. saving enough for retirement 30 years ahead of schedule. I share this rule with the thousands of clients I’ve helped eliminate debt and exceed their money goals. And now I’m sharing it with you.

Ready to reshape your mindset about spending? Here’s how the “$1 rule” works and why it could change your life.

What is the $1 rule?

The $1 rule is my take on the old idea of ​​cost per use, specifically using a dollar as a reference point. Before purchasing a product, calculate how many times you will use it. If it drops to $1 or less per use, I give myself the green light to buy.

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So, if a product costs $100 and you can only use it five times, that drops to $20 per use. According to the $1 rule, this is not worth the purchase.

This rule works especially well when applied to your weak points where you tend to overeat. For me, this is clothing, accessories and home goods. I still buy things I love (and will get a lot of use out of), but it keeps me from making impulse purchases that might seem like a good deal.

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It also encourages me to choose sustainable and quality products. I’ve moved away from fast fashion almost completely because even a $5 shirt that I might only wear once or twice breaks the $1 rule.

How does the $1 rule work for large purchases?

When discussing big expenses like furniture or technology, price tags look different when you first calculate how many uses you’ll get.

For example, when we bought our last house, it became clear that my old HGTV-obsessed self was making a comeback. It’s easy to get caught up in the excitement of decorating a new home and end up buying more than you really need. But what actually value money?

Since my husband and I constantly work from home, we decided we were willing to pay a little more for quality desks and office chairs. We’ve learned from our previous moves that cheaper tables tend to fall apart easily. So instead of leaving Aim Or, as we did before, we bought a table on Craigslist and then went to a higher-end furniture store.

We found a classic desk selling for $699, down 40% to $419. That’s more than I’ve ever spent on a desk, but I found that using the $1 rule, I’d be sitting in front of the desk five days a week for 50 weeks a year, which translates to 250 uses per year. The purchase will surpass the $1 rule in less than two years.

I felt much more confident in this purchase than I did in the days when I saved and saved every penny.

Be careful: The $1 rule does not allow you to spend money that is not in your budget. However, you need to be careful about how much flexible income you have. But using this rule to regulate the purchases you make with your discretionary income can help you stop overspending without feeling restricted.

What happens if an item fails the $1 rule?

I still occasionally spend without following the $1 rule. When it comes to paying for events or travel, the $1 rule doesn’t always work. But that’s when I rely on my budget and past experiences to decide whether an expense is worthwhile.

The Broadway show Hamilton came to our city while I was focused on paying off my student loans and mortgage. The musical theater enthusiast in me was at odds with the voices of leading debt experts saying it would be a mistake to buy those expensive tickets. But since I stick to the $1 rule for 99% of my purchases, I knew I could make an exception.

Yes, I bought Hamilton tickets instead of putting extra money towards my debt and I don’t regret it. However, I did not use a loan to finance the purchase. Instead, I traded in other expenses I would have throughout the month, like dining out and social gatherings, so I could pay for the tickets in full without a credit card and without breaking the bank.

The $1 rule won’t always help you when deciding whether an experience like a vacation or concert is worth the money. But if you stick to it for material purchases most of the time, you’ll be able to set aside more money for experiences without hurting your debt payoff goals.

You can pay off your debt and continue living your life

Leaving room to enjoy my money allowed me to focus on the long and often monotonous journey of paying off debt and saving for the future. I also eliminate the guilt of spending on things that are meaningful to me, which has helped me develop a healthier relationship with money.

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