The truth is, an occasional splurge every now and then probably helps keep us sane. If you spend most of your time abiding by the financial rules you’ve set up for yourself, it can feel nice to go a little crazy and purchase something you really love that maybe isn’t quite within your budget.
But do you really love that item enough to break your budget for it? While a splurge is, by definition, the act of spending money freely or extravagantly, we still maintain that there’s a “smart” way to splurge that can leave you feeling satiated with the rush of making the purchase and also satisfied that the purchase was a smart one. To do so, start by asking yourself a couple of questions before handing over your credit card. Here are some good ones.
Question 1: How many hours will I have to work to make up for this purchase?
Why it helps to ask: Nothing can put the kibosh on spending more than figuring out exactly how much of your time you’ll need to invest to make up for the purchase. If you can ask yourself this question and be okay with the answer — whether that’s because the answer isn’t actually that much time anyway or because you simply don’t care how long it takes you to work it off because you love the item that much and know you’ll get a ton of use out of it — then it’s probably a good item to have on hand.
Question 2: How will this purchase make my life easier and/or better?
Why it helps to ask: For some items, the answer here may be materialistic or frivolous — and that’s okay. Sometimes a purchase is important to us simply because we love it. That leather jacket that costs just a tad more than you would normally spend might not actually fundamentally enhance your life in any real way, but if you feel fantastic when you wear it and you know you’ll wear it a lot, then it might be worth buying. On the other hand, some expensive purchases — particularly for electronic goods like computers, cell phones or e-readers, for example — actually do make our lives easier, and therefore the sizeable price tag is worth it in the end.
Question 3: Will I use this enough to justify the cost?
Why it helps to ask: If you’re interested in buying an expensive object because it fulfills some particular need in your life right at this very moment, it’s probably worth taking a second to ask yourself if you foresee this object as being fundamentally helpful in the future, as well. If the answer is no, then it might be smarter to see about borrowing a similar product from a friend, or renting one for only the amount of time that you foresee yourself actually using it.
Question 4: Am I getting the best deal on this item?
Why it helps to ask: Sometimes part of the fun of a splurge is the rush we get from falling in love with something and buying it right away in that moment, but taking the time to ask yourself if you’re actually getting the best deal on that particular item shouldn’t take away from that rush — wouldn’t it be better to get the same great item but at an even greater price? For example, have you searched online to see if you can find it cheaper there, or did you try looking for coupons? Are any particular holidays coming up where items might be likely to go on sale? Taking a beat to do a bit of investigating could help you score not only a great purchase, but a great deal as well.
Question 5: What will I have to sacrifice to make this purchase?
Why it helps to ask: Assuming this splurge is outside of your budget, you’ll probably need to cut back in other areas of your life for a little while to make up for the difference. So before making the transaction, stop and ask yourself what you’ll need to give up for the month to pay for it, and if you’re willing to do that. Does buying this item now mean fewer dinners out with friends for a while, a deduction from your travel savings for the month or less spending on other entertainment options? (One thing a splurge should never mean is a deduction from your emergency savings or putting less away in a retirement account for the month to cover the difference, so keep that in mind.) If you’re okay with what you’ll have to forgo to get your splurge on, then you can probably go ahead and do so.
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