Is it ever OK to splurge?
Your budget should help you do what you love
Q: I’m trying to keep my spending in check, but I want to treat myself occasionally. Is it ever OK for me to spend a little extra on something special?
A: Your budget should help you do what you love, not leave you stuck at home, afraid to spend one extra penny. That’s why I follow the “pay yourself first” philosophy, which just means saving some of your income as you earn it. That puts your longer-term savings on autopilot, while you cover regular expenses out of your day-to-day budget.
But when money is tight, it’s easy to feel like you’ll never go to the movies or buy a sketchbook again. And feeling deprived by your budget makes it more likely you’ll abandon it with a spontaneous shopping spree at H&M.
“If you’re not doing things that are essential and restorative, chances are you’re going to start spending money on other things that are shortterm, quick-fix things,” says H. Jude Boudreaux, a certified financial planner and founder of Upperline Financial Planning in New Orleans. Online shopping and pricey dinners out feel good in the moment, he says. But if they don’t truly fulfill you, you’ll end up going back for more — and overspending while you’re at it.
Rest assured. There are ways to build fun into a slim budget. But first, let’s make sure you’re choosing your splurges wisely.
PINPOINT WHAT MAKES YOU HAPPY
Your first task is to figure out what “essential and restorative” mean to you. Identify the experiences that bring you deep joy, not just fleeting pleasure, and prioritize them.
Boudreaux often asks his clients the three questions formulated by George Kinder, founder of the life planning movement , which encourages financial professionals to incorporate clients’ nonmonetary goals and values into their financial plans. The questions ask how you’d change your life if you were completely financially secure, if you had five to 10 years to live, and if you had 24 hours to live. Your answers shed light on what’s most important to you. Boudreaux says his clients’ most satisfying activities often don’t cost much. But if the exercise reveals you have a penchant for travel to faraway lands, make that a longer-term goal and create a plan to realize it.
Make your goals specific, Boudreaux says; instead of setting aside money for travel in general, save for a “nineday trip to Ireland.” Also, consider setting up a separate, travelonly savings account at a bank other than the one where you keep your checking account. If the accounts aren’t linked, you’ll be less likely to dip into those savings for daily expenses, says Ashley Feinstein Gerstley, a money coach and founder of The Fiscal Femme in New York.