Having a treat-yourself mindset is to blame for much of Americans’ financial woes: 74% of Americans report having an overspending problem and 55% of Americans admit to spending recklessly, even as 62% of American households live paycheck to paycheck as of 2024. And “Nearly half of Americans (46%) have missed paying a bill at some point because of nonessential spending,” according to a survey on overspending by Clever Real Estate.
Having a treat-yourself mindset—a mindset that centers on impulse buying and prioritizes small purchases over small progress toward your financial goals—fuels this drive for consumerism. According to that same study by Clever Real Estate, “84% of Americans justify unnecessary purchases with phrases such as ‘I deserve it’ or ‘I’ll treat myself.’ ”
And while higher-income earners struggle the most with living within their means and insufficient income remains the primary reason why lower-income earners live paycheck to paycheck, too much discretionaray spending generally remains a significant problem across the board.
According to PYMNTS’ study of earners who live paycheck to paycheck, “Higher spending on essentials among lower-income consumers is not generally offset by a lesser portion allocated to discretional spending, indicating that the average consumer prefers to save less rather than give up entirely on nonessential spending.”
And while giving up entirely on discretional spending shouldn’t be the goal for most people, if you live paycheck to paycheck and are struggling to get by and are spending your little remaining money to treat yourself because you don’t think it’s worth it to save money, that’s going to be one of multiple factors that are preventing you from ever moving out of the paycheck to paycheck cycle.
Too much discretionary spending holds so many people back from achieving financial freedom; countless Americans view saving as an act of deprivation and spending as an act of self-care. Given the fact that so many Americans struggle immensely with curbing their discretionary spending, it’s fair to say that the current credit card debt crisis, emergency savings crisis, and retirement crisis are largely—but not entirely—a result of the ubiquity of this treat-yourself mindset.
If you want to protect your long-term financial health, you absolutely need to confont these five truths about adopting a treat-yourself mindset:
1. Having a treat-yourself mindset makes financial stress a self-fulfilling prophecy.
Many people adopt a treat-yourself mindset because they are fatalists about budgeting — they believe that saving or investing a little bit at a time will make no impact whatsoever on their long-term finances, so they might as well treat themselves. Another word for this is “doom spending”—the paradoxical act of spending money to relieve the stress of believing that you don’t have enough of it.
Similarly, the treat-yourself mindset is at the heart of the recent “soft saving” trend, which emphasizes prioritizing spending money today over saving for the future in the name of self-care or mental health—often as a coping mechanism for financial stress.
According to Credit Karma, 27% of Americans, including 37% of Gen Zers and 39% of Millenials, spend to cope with stress. And LendingTree reports that 50% of Americans view emotional spending as normal, and 50% of emotional spenders “say stress is the top mood that influences them to spend.” Money is Americans’ top stressor, with 47% of Americans stressed at least occasionally about money.
If you treat yourself because you think that your financial future is doomed and that saving small amounts of money over time won’t make a difference to your financial future, the truth is that your financial future probably isn’t doomed — but it could be if you continue to liberally exercise a treat-yourself mindset to the detriment of your long-term financial goals over the course of decades.
People who adopt a treat-yourself mindset don’t realize just how much small expenses add up over time — and they don’t realize just how much incredible progress they could make toward their financial goals if they stop spending impulsively. Time is your strongest wealth-building asset, and you absolutely can make a difference to your financial future if you harness the power of small compounding changes: Investing just 1% more of your income could make a noticeable impact on your future finances—even if you earn a lower income.
If you’re adopting a treat-yourself mindset to escape from feelings of financial hopelessness, you need to know that achieving your financial goals is absolutely doable if you reject this spend-first-save-later mentality.
2. Having a treat-yourself mindset drives America’s credit card debt crisis.
When you have a treat-yourself mindset, spending is largely driven by emotion and impulse and your feelings today become more important than your long-term financial stability. This same mentality is partially responsible for Americans’ ever-increasing credit card debt: The average credit card balance is $6,580 as of Q4 of 2024.
According to a survey of 2,000 U.S. adults by LendingTree, 69%–75% of consumers in all income brackets report emotional spending; “76% of emotional spenders admit that doing so has led to overspending, and 39% of them say they’ve gone into debt as a result.”
According to Bankrate’s 2025 Credit Card Debt Report, “38% of U.S. adults are willing to go into debt for discretionary purchases,” including travel (27%), dining out (14%) and/or entertainment (13%). One in five Americans cite discretionary purchases as the primary reason why they are in credit card debt: 11% carry card debt mostly because of retail purchases and another 9% say that their credit card debt is mostly due to spending on entertainment or vacations.
And although emergency expenses are the biggest cause of credit card debt, credit card debt happens largely because most Americans don’t have adequate emergency savings, and the data is clear that Americans strongly prefer to to spend money on discretionary purchases over saving for emergencies.
3. Having a treat-yourself mindset stops you from saving for emergencies.
Having a treat-yourself mindset is a major reason why so many Americans struggle to build an emergency fund: 59% of Americans can’t pay for a $1,000 emergency expense with money from their savings accounts, and “27% of U.S. adults have no emergency savings at all,” according to Bankrate’s 2025 Annual Emergency Savings Report. And 36% of Americans have less than 3 months of expenses saved for emergencies.
According to a survey by Credit Karma, “more than one-third (36%) of Americans say they can’t rationalize saving money due to feelings of uncertainty about the world and economy, increasing to 47% of Gen Z and 43% of millennials. This could be why nearly one-in-five (19%) Americans have $0 in savings right now.”
According to one study by PYMNTS, discretionary spending is a key reason why high-income earners don’t save for the future; however, discretionary spending remains a barrier to saving money at all income levels: “Higher spending on essentials among lower-income consumers is not generally offset by a lesser portion allocated to discretional spending, indicating that the average consumer prefers to save less rather than give up entirely on nonessential spending.”
That same study notes that earners who make less than $50,000 and live paycheck to paycheck spend 21.7% of their income on discretionary purchases, while they allocate just 6.1% of their income to retirement and savings. Earners who make $50,000–$100,000 spend 24% on discretionary purchases while allocating 7.1% of their income for savings and retirement. And given that so many Americans admit to having a spending problem, it’s no wonder that the average savings rate as a percentage of disposible income is just 4.6%, according to the Bureau of Labor Statistics.
Another study by PYMNTS found that splurging is a common reason why consumers live paycheck to paycheck: 23.6% to 33.7% of Millenials and Gen Zers cite splurging as a reason why they live paycheck to paycheck, and 12.9% to 18.6% cite it as the top reason for living paycheck to paycheck.
Further research by PYMNTS concludes that:
Paycheck-to-paycheck living is a continuum between choice and necessity….Our research reveals that 21% of American consumers (37 million) live paycheck to paycheck primarily out of necessity—there is a significant mismatch between money in and money out every month. More than half—54%, or some 93 million consumers—do so due to a blend of choices about how they spend their paychecks and circumstances that create unexpected financial events. And 25% live this way predominantly by choice.
Getting rid of a treat-yourself mindset is key if you want to escape the paycheck-to-paycheck cycle and save for emergencies or invest for retirement.
4. The treat-yourself mindset robs you of your retirement.
America’s current retirement crisis is the long-term consequence of having a spend-now-save-later mindset. According to a 2024 survey by GoBankingRates, between 25% and 35% of people — depending on their age bracket — have nothing saved for retirement.
That same study reports that “Nearly three out of four people — 71% — are heading toward retirement with five-figure nest eggs at best. Ten percent have $50,000 to $100,000, 33% have less than $50,000 and 28% have exactly zero dollars saved for retirement.”
Alarmingly, 40% of retirees worry that they will completely drain their retirement savings, and 26% of nonretired adults aged 50+ “expect to never retire,” according to two 2024 studies by Clever Real Estate and AARP.
With 38% of U.S. adults being willing to go into debt for discretionary spending, 74% of U.S. adults admitting to having an overspending problem, 36% of U.S. adults “can’t rationalize” saving money because they use spending as a coping mechanism and view saving for the future as pointless, and 84% of U.S. adults adopting a ‘treat-yourself’ mentality to justify discretionary spending, it’s no wonder that America is facing a massive retirement crisis.
When you treat yourself to something small over and over because you don’t think that investing that money will make a difference, you overlook the fact that time, not money is your greatest wealth-building tool. If you spend years thinking that you don’t have enough to make an impact on your financial future, you’re wasting your most important wealth-building tool: time.
When you adopt a treat-yourself mindset, you’re essentially telling yourself that you have to have an all-or-nothing approach to investing. Having a treat-yourself mindset is so dangerous for your finances because you’re robbing yourself of the opportunity to make incremental progress toward your financial goals.
5. You can’t avoid hard choices by adopting a treat-yourself mindset.
When you consistently prioritize instant gratification over incremental progress, what you’re doing is avoiding doing the hard work it takes to build financial stability. If you adopt a treat-yourself mindset, you might think that you’re avoiding making hard choices, but the reality is that hard choices are inevitable regardless of whether or not you exercise a treat-yourself mindset.
Facing the reality that you won’t be able to support yourself for 3–6 months if you’re laid off is hard. Cycling in and out of debt constantly is hard. Waking up closer and closer to retirement knowing that you have nothing invested is hard.
If you don’t make the hard choice now to save instead of spend, then you’ll be forced to make hard choices in the future if you find yourself in a difficult financial situation. Hard choices are inevitable—you just have to choose when you get to make those hard choices.
But choosing to say ‘No’ to yourself now gets easier and easier, whereas choosing instant gratification makes life increasingly difficult in the long run. If you can make saying ‘No’ to yourself a habit, there will come a time where saying ‘No’ won’t be so hard anymore.
So which hard choices are you going to choose: the kind that makes your life better — or the kind that is a consequence of decades of overspending in the name of treating yourself?