Does it ever make sense financially to splurge on things you don’t need but really want? How do you avoid feeling guilty about indulging in stuff you want that’s just a luxury or hobby?
From a purely financial sense it may not make sense to splurge, but there is more to life than finances. Money is a tool which we use to get things we need or want. It’s good to have this tool so we can live comfortably, but simply having money for the sake of having it isn’t a particularly useful goal.
Put another way, there isn’t anything wrong with splurging on things you want occasionally, so long as your spending on luxury items or hobbies doesn’t interfere with your other financial goals. There is a balance to be struck between enjoying life now and being secure financially long-term.
Most of us save money and invest so we can live comfortably, retire someday, have a home, food, medical care, and look after our children. As long as you’re putting away enough money to cover your goals, such as the ones I just listed, and you have money left over in your budget, you should feel comfortable spending the extra money without guilt.
Take a walk through the budgeting tips and make sure you’re checking all the boxes. Are you tracking your income and expenses? Have you eliminated your debts, or at least are paying them down on schedule? Do you have an emergency fund in case you become unemployed? Are you saving for the future, putting money away for retirement? Assuming you’ve covered all of these bases already, and you still have money left over in your budget, then you can plan to splurge on things you want.
My recommendation is to set up a high interest savings account. Each month, put extra money you don’t need for bills, debt payments, and retirement savings into the account. This account will act as your guilt-free money for purchasing things you want – a car, a vacation, a nice watch, entertainment equipment, or whatever draws your eye. Once the account has enough money in it, then you can buy whatever it is you like.
I recommend against putting off bill or debt payments to buy luxuries. I’d also recommend against buying luxuries on credit. Save up gradually for the things you want to buy for yourself to enjoy. Trying to buy luxuries on credit will cost you a lot in interest payments and may put you in a bad financial state. However, assuming you are not drowning in debt, your needs are all met, and you’re putting away some money for your future self, there is no reason to feel guilty about putting a little money aside each month for something you’ll really enjoy.
Comments are closed, but trackbacks and pingbacks are open.