Everyone deserves a little treat—but no one wants to be left in the red at the end of the month. Is it possible to indulge while still maintaining financial wellness? Sure! Read on for a few tips about smart splurging without the guilt.
Buying yourself something special doesn’t have to be an impulsive act. In fact, planning ahead for a splurge means you get to budget ahead (smart!) but also look forward to the upcoming treat (fun!). Why not set aside a certain amount of cash each pay period to build a “fun account” dedicated to splurges?
A special treat here and there is unlikely to lead to bankruptcy. The real danger is when a single splurge leads to a spending spree. To avoid overspending, consider withdrawing your dedicated splurge money in cash, so that when you’re at the store you can’t spend more than you’ve budgeted.
On the other hand, splurging with a credit card could be a smart way to earn rewards as you spend. Choose a card that offers great perks and benefits, and most importantly: be sure to pay off your entire statement balance every month. Incurring credit card debt may disrupt future splurging opportunities!
A smart splurge often involves comparison shopping ahead of time. Check prices at nearby stores for your splurge item of choice, and see if it’s available for less money online. On the other hand, a splurge at a secondhand store may be significantly cheaper—which means more money for your next treat.
If you’ve got the urge to splurge, take some time to think about what purchases will feel like a special treat both now and in the future. Instead of paying ten dollars for a fancy coffee, how about buying a nice mug you can enjoy every morning? More value per dollar usually means a smarter splurge!
Sometimes, the thrill of a splurge is less about the treat and more about the shopping. Give yourself a set amount of time to go wild online. Fill those carts to your heart’s desire! Then, step away from the computer. You may find much of the “splurge urge” has been sated, without spending a cent.
While it may seem that budgeting and splurging are polar opposites, in truth, budgeting is what makes smart splurges possible. If you haven’t budgeted before, the 50-30-20 budgeting rule may be a good place to start: aim to spend 50% of your income on needs, 30% on wants, and 20% on savings.
Instead of constantly splurging throughout the month, every time you see a splurge-worthy item, write it down. At the end of the month, you can evaluate your list and your budget to choose one or two items to splurge on. Sometimes, simply noting down a special item on your list scratches the itch to spend!