Save to splurge

We wrote a few weeks ago, in Think of your purchases in terms of work hours, about a way to improve your outlook on spending in order to avoid frivolous and impetuous purchases that can wreck your budget. And we write often about saving and being thrifty.

But here’s a reminder: Sometimes it’s also OK to treat yourself to a special item or activity that you love. Allowing yourself an occasional treat is necessary to keep you from feeling deprived by your budget. And because it’s often the feeling of deprivation that leads us to indulge in “I-deserve-this” spending binges, avoiding that feeling – and those binges – is a key to sticking to your budget.

It’s similar to the diet philosophy that says a too-strict diet makes it more likely that you’ll cheat with a high calorie pig-out splurge. For example, you’ll be less likely to break your diet by eating a pint of ice cream if your diet allows you an occasional scoop of ice cream than if your diet is super strict and completely bans all desserts.

That being said, keep in mind that we’re not talking about spending hundreds or thousands of dollars on a new TV, computer, fur coat or season tickets to your favorite sports team. Rather, budget to indulge in small, inexpensive items that let you feel like you’re having a treat without your pocketbook taking a major hit. Because what’s the point of saving if you can't splurge occasionally on yourself and others?

A good way to allow these small splurges every once in a while is to include a line item in your budget that specifically sets aside money to spend on the little things that aren't needs, but which make you happy. For some, that’s an occasional movie night out, while for others, it’s a fancy gourmet coffee or a good bottle of wine. Building this category into your budget upfront helps you stick to your budget and avoid feeling deprived so you can meet your financial goals and reduce both buyer and saver's remorse.

In other words, save to splurge every now and then!