Sometimes it’s okay to splurge: 10 splurges that won’t break the bank
I feel as if I've been a Scrooge here lately: “don't watch Super Bowl commercials”, “don't buy gadgets”, “bundle up to stay warm“, etc. While it's true that saving money requires sacrifices, I don't mean to make it sound like drudgery. Actually, I'm elated with my progress.
When I was working with Lauren Muney to create my wellness program, she emphasized that fitness should not be a chore. “Remember that you're working toward something positive, something long-term,” she said. “And allow yourself a treat once in a while.” She told me that as long as I stuck to my diet and fitness plan the rest of the time, I could allow myself a couple of “treat meals” during the week, meals during which I didn't worry whether I was following the plan to the letter. This has made a huge difference.
The same concept holds true for personal finance. I've written before that you shouldn't confuse frugality with depriving yourself. They're not the same thing. It's a good idea to allow yourself a reward now and then, to allow yourself to splurge.
In December I wrote about my financial goals. Since then I've had a number of major victories:
- I built my non-emergency fund savings from $0 to $700. (Kris and I have $5,000 emergency fund that represents our only joint account.)
- I paid down my home equity loan to $15,000 (which is $6,000 less than it was a year ago).
- I reduced my comic book spending from $179 in December (or my average of $250/month in 2006) to $65 in January.
- I slashed other miscellaneous discretionary spending.
I've made tremendous progress just one month. I even saved enough spare cash to indulge in an exorbitant treat. Kris and I joined two close friends for a meal at one of our favorite Portland restaurants, Paley's Place.
Paley's Place is not the sort of restaurant you enter expecting to pay less than $50. Or $100. Or $150. Kris and I spent $160 on our meal the other night and felt we escaped having spent less than we might have. (Last time we spent over $200.) But the expense was was worth it. The food is fantastic. As the restaurant's web site says:
Paley's Place offers Pacific Northwest regional cuisine, served in the warm and inviting setting of a Victorian home. Chef and owner, Vitaly Paley, creates seasonal menus from the bounty of the Northwest — fresh organic ingredients supplied by local farmers, growers and purveyors — with Southern French and Northern Italian influences.
Whatever. All I know is that the food is damn good. We paid $7 for french fries. You know what? They were worth it! It's difficult for the frugal side of me to justify such an expensive meal, no matter how well I've been doing lately. It's the equivalent of ten meals at other restaurants. But I ask myself: “Is the food really that much better?” The answer is “yes”. Kris put it best: “That's a once-every-five-years restaurant.”
We had a wonderful meal and great conversation with friends. I got my money's worth. It was a solid reminder that managing money is all about knowing when to save and knowing when to splurge.
Build Fun Money into Your Budget
Even if it's only $5 a month and you spend it on a cappuccino, building some fun money into your budget can keep you from getting frustrated and giving up on your goals. When I was starting my debt payoff journey, I let myself spend $20 a month on bagels. Just be sure that you're not spending more or more often than you can afford if you want to meet your other financial goals.
Allocate Some Windfall Money to a Splurge
An unexpected inheritance, a larger-than-foreseen tax refund, a gift from a loved one — whatever the source, a windfall can (and should!) be allocated toward your most imperative financial goal, whether that means paying off debt or beefing up your emergency fund.
However, if it feels frustrating to come into a lump sum of money and be completely responsible with all of it, maybe you want to establish a rule about extra money. My own rule of thumb is to give myself permission to spend a portion on something frivolous. For me, 10 percent of any amount below $1,000 and five percent of any amount greater than that feels like a good balance between fun and being responsible.
Celebrate When You Reach a Milestone
Your being laser-focused on a particular debt has paid off (haha, pun). Maybe it's a student loan, perhaps it's a credit card or even a car payment. Taking a moment to stop and smell your success is a key aspect of motivation and money.
Maybe you take a break for a month and allocate what you would have spent on something fun before reactivating your debt snowball. Even if you decide to reward yourself in a small way, taking the time to think about something other than money can feel like a reward all its own.
What Constitutes a Splurge?
For me, splurges fall into three main categories: they can be an experience, an item that lasts a long time, or paying others to do something that you hate to do. Another criterion for a splurge is that it's rare (not lifestyle inflation). This isn't to say you can't splurge on a monthly basis if you work fun money into your budget. However, you should always be aware that the item/event/experience in question is a want and not a need. Constant evaluation of your budget is key to making sure you're not overextending yourself.
5 Splurges $50 or Under
But if it's been awhile since you've treated yourself, it might be hard to decide what you should even splurge on! And if your tastes run more to the expensive side and your current splurge is relatively small potatoes, you may also be at a loss. Here are some ideas for splurges that won't break the bank.
Dinner and a movie. A tradition that never goes out of style. There are even theaters that play movies that have been out for awhile (sometimes even classic movies) that are less expensive than their current-blockbuster counterparts. If you're more of a homebody, takeout and a ordering movie on-demand may be more your style.
A mani/pedi. A manicure and pedicure will run you less than $50 at most nail salons and will make you feel pampered and relaxed. And they're not just for ladies! Fellas, consider giving it a try.
Perfume or cologne. What I like about this is that one bottle of perfume or cologne lasts a long time, so this is a splurge with some staying power. Every time you spritz yourself or get a compliment on how good you smell, you'll be reminded of your financial skills.
A scented candle. Like cologne, many scented candles last a long time, making them another splurge that serves as a constant reminder of your success in conquering a particular debt or meeting a financial goal. These come in more scents than you can possibly imagine, and choosing can be half the fun. So spend some time and pick something amazing!
A good book. While there is a place for cheap or free books, maybe there's a certain author or series that you know you'll read again and again. If that's the case, and you can't find it used, go ahead and buy it new. There's worse things to spend your money on than expanding your brain.
5 Splurges $100 or Under
When your budget can handle a little bigger splurge, these things can help you indulge in some free time or relaxation. And sometimes they can even feel like a mini-vacation!
Maid or landscaping service. This is one of my favorite splurges because it takes something I don't have much time for and don't enjoy and takes it off my plate completely. (Well, at least it's done for a couple of weeks anyway!)
A massage. Paying off debt is stressful. And even if you're in a good place financially, you probably carry more stress in your body than you think you do. I'm always surprised when I get a massage by how much stress I'm holding, and where in my body it's presenting itself. I always feel better afterward.
A facial. I've had friends recommend these for years and I was never interested. However, I recently tried one for the first time and I really enjoyed it! It was relaxing and my skin looked amazing afterwards. I'll say the same thing here that I did about mani/pedis — they're not just for ladies! In fact, since most guys don't wear makeup and most women do, arguably it might even make a bigger difference for men.
A piece of art. At this price point, we're probably not talking about anything huge or fancy, but a piece of art that you like and that inspires you will last forever. Heck, I've got some poster prints in semi-nice frames that I adore.
A video game. Assuming you've already got a game system, the right video game can provide some of the lowest-cost entertainment per hour than almost anything else around. My favorite game cost $65 and I've invested over 250 hours in my character. Fun!
What Do You Splurge On?
I write a lot about frugality, about saving for the future. But what about enjoying life today? My friend Matt recently asked, “Amid all the saving and sacrifices you make to keep your financial life in order, what is your one extravagance that you deem worth spending money on? I know with you it's that Filson clothing stuff, right? Maybe Apple products?”
He's right. I love both Filson and Apple. I don't often splurge on Filson — I'm just too cheap — but I always spend more for Apple computers because they're worth it to me. I don't really consider that a splurge, though, because it helps to increase my productivity. My food spending? Now, that is a splurge! Kris and I love fine food, and we're not afraid to pay for it. On our recent trip to San Francisco, I spent more on food than I spent on clothing during all of 2007.
But Matt wanted to know more. “I'd love to hear these personal finance bloggers who try and one-up each other on how hard they clip coupons or how much they devote to their 401k, I'd love to hear they get a massage every so often or bought a new fancy car and why they chose to spend their money on that one thing.”
Armed with Matt's suggestion, I approached some of my colleagues. Here are the things personal finance bloggers splurge on:
NCN from No Credit Needed wrote:
I like saving money but I don't mind splurging on a few things. Included among these are gymnastics lessons for my daughter. She's eight, and she is a competitive gymnast. Her training sessions are expensive but important to her. So, we gladly pay for them. I'm not sure that this is an extravagance, but it certainly isn't necessary.
FMF from Free Money Finance wrote:
Cycling is my one extravagance. I bought a new road bike last year for a few thousand dollars. Add in other purchases like a bike rack for my SUV, specialized bike clothes, hydration packs, nutritional bars, maintenance equipment and on and on — and it comes out to be a sizable amount. Then again, cycling keeps me in shape and has helped my cholesterol drop like a rock, so I'm sure it's actually saving me money in the long run. That's my story, at least, and I'm sticking to it.
Will from Wise Bread wrote:
I'm willing to pay a high premium to avoid LA traffic. I've never lived more than a ten-minute drive away from any of my jobs. This usually means paying an extra $300 a month for the convenience. But I think it is worth it because I get an extra two hours a day in my life. That works out to be $5 per hour — a price I'll gladly pay for spending more time on my blog (um, I mean my family).
Pinyo from Moolanomy wrote:
While my wife and I try to save as much money as possible, we tend to splurge on things that bring the family together and improve our quality of life. For instance, we like to eat out on the weekends and don't mind spending more money at a good restaurant. We also don't mind spending money on trips and vacations. Lastly, we like to spend more money on higher quality items if we know we will be using them for a long time.
Jim from Blueprint for Financial Prosperity wrote:
I'm all about spend as little as possible for “stuff” and the splurging on experiences. For example, I'll try to pay as little as possible for the computer I'll need (almost the opposite of J.D. and his Apple fetish), or haggle my way to the cheapest cell phone plan, but I'll go gangbusters when I'm on vacation. For example, on our honeymoon, we took a helicopter tour of Kauai, Hawaii that ran $240 a piece. While pricey, I value the experience of touring Kauai on a helicopter with my wife — and not feeling guilty over spending the money — more than accumulating “stuff.”
Plonkee from Plonkee Money wrote:
I'm not the most frugal person in the world, but I do tend to stick to a pretty middle of the road existence, not splashing out on much. My main extravagance is haircuts — I get my regular cut and blow dry in probably the nicest and most expensive salon in the city. Given the unexciting hairstyles I normally sport, I could probably spend about half the amount and get the same cut, but I trust my hairdresser, and I feel like I'm spending for quality. I also love pretending that I'm fashionable and sophisticated, and can afford the high life.
Trent from The Simple Dollar wrote:
I tend to splurge on anything Nintendo. I own a Wii and a DS and have a grand old time with both of them.
The GLBL Guy from Gather Little By Little wrote:
Dress shoes. I wear my dress shoes all day long, 5-6 days a week. I want shoes that are durable, comfortable and easy to maintain. I started wearing Doc Martens ten years ago, and I still have and wear that first pair. I'm willing to put out the extra money in the short-term to wear them in the long-term.
Nina from Queercents wrote:
My partner and I prefer to buy experiences rather than things. We'll spend money on a nice piece of fish and an above average bottle of Sauvignon Blanc. That's a typical Tuesday night for us. Most people concentrate their disposable dollars on things reserved for special occasions rather than on what we do or use everyday. Alexandra Stoddard writes of the 5-percent Rule. This translates into: “a tendency to save up for a few outstanding events each year — for a particular party, anniversary or birthday celebration, a vacation. Such events comprise at the most 5 percent of our living time, and the remaining 95 percent is often merely walked through in wistful anticipation of some later joy.” We pay attention to the smaller, day-to-day occurrences and are willing to splurge on these experiences.
Flexo from Consumerism Commentary wrote:
My biggest splurge, which I would consider to be a series of small splurges, is my habit to eat lunch with my coworkers out of the office. I do this because I don't like cooking for myself at home, the office's cafeteria is as expensive as going out (and I can get better food out of the office), and I prefer the company of my co-workers. I've tried brown-bagging it, but after many years, I can't get that to work for me.
SVB from The Digerati Life wrote:
I am a frugalist at heart and practice a lot of discipline and self-control when it comes to spending. I don't buy stuff very often and don't buy on impulse. However, I do have a few things I may splurge on without regrets. I usually don't hold back when I purchase things for my house that I think will beautify it or make it more comfortable to live in. In particular, I have a weakness for fabric and linen (e.g. pretty curtains and bed accessories), as well as garden plants. Not only do they add to my family's personal comfort and enjoyment but I also feel that they add to the value of our surroundings. I view curb appeal as an investment! Or it could just be my “nesting instinct” kicking in.
Cap from Stop Buying Crap wrote:
When I'm traveling or on vacation, I would splurge as if there's no depths to my bankroll. My internal calculator will turn off, and everything will suddenly become affordable in my eyes. Expensive dinner? No problem. Overpriced souvenirs that'll most likely collect dust soon after? Two please. The spend attitude, of course, quickly wears itself out after the vacation is over — especially when the bill arrives. Having said that, I generally won't revisit these places again, so the price of a fun experience for myself and loved ones is well worth the splurge.
Lily from The Honest Dollar wrote:
My boyfriend and I are fairly serious about saving. Being young and living in New York, we have a lot of opportunities for spending money, but we tend to be conservative in daily spending. Our main splurge is food. We save up to go to Michelin-rated restaurants. We drop the big bucks on organic chicken and beef because my boyfriend swears they taste better (I'm skeptical, but I humor him). We invest in quality cookware. After all, you are what you eat.
Mrs. Micah wrote:
When I asked my husband about my one splurge, he said exactly what I was thinking: “chocolate!” I buy a bag of Nestle semi-sweet chips every week and by the end it's all gone. If I want a little pick-me-up, I'll have a dozen chips straight. Or I'll mix them up with peanuts as a trail mix to stave off blood sugar drops. If it affected my weight I'd stop, but since it doesn't I count it as a regular grocery expense like rice and milk.
Jeremy from Gen X Finance wrote:
As Elaine described George in an episode of Seinfeld, I'm very careful with money. Most purchases are planned out well in advance, and I almost always buy something when it is on sale. The one exception is food. Now, I'm not talking about fancy restaurant food, but fresh food for cooking at home. I absolutely love to cook. So if I feel like cooking steak, I'll go buy steak. I'm talking NY Strip, Ribeye, etc. I'll buy 20 dollar a pound fresh sea scallops, imported cheese, or whatever is needed to create the meal I desire. To me, great food is one of the best things to experience in life, so it is worth every penny.
Nickel from Five Cent Nickel worte:
Over the past couple of years, our spending patterns have been increasingly shaped by a desire to create wonderful memories as opposed to accumulating more stuff. I think this is largely driven by the realization that our kids won't be young forever, and we need to enjoy this time in our life as much as possible. So our biggest splurges now run toward travel — either trips to see extended family, or family vacations.
I think that even the most frugal person has one or two indulgences she allows herself. And that's not wrong. In fact, it's good. It's these things that keep us going as we save for the future. What do you splurge on and why?