Being finance-savvy is an essential skill, especially these days when there’s a plethora of things to spend one’s money on easily: food deliveries, rides, pop-up shops, limited editions, you name it. It’s always ideal to have a good grasp of your spending limits to ensure you don’t fall hard into debt. A good rule to have before giving in to that new pair of designer boots or signing up for a table at the newly-opened fancy restaurant is to ask yourself, “Do I really need this?”

Well, the answer to that question is almost always no. Sure, clothing and food fall under your basic needs, but they don’t necessarily have to come with a label and a hefty price tag. You can have a pair of boots that doesn’t burn a hole in your wallet and you can satisfy your craving for delicious food so that it doesn’t cost your entire monthly food budget.

However, being sensible with money doesn’t mean every single dollar you spend should be for practicality’s sake. Just as people who go on diets know, you can allow yourself a cheat day every now and then. This way, you don’t feel completely deprived. But do your best to focus on your goal.

Whether you’re saving up for something big or looking into completely clearing yourself of debt, read on for four pointers on how to give in to your indulgences while staying true to your mission.

1. Think of your budget in percentages.

When someone orders in pizza for the house, one’s share is always divided by slices. Two slices for him, two slices for her, two slices for you, and so on. Now think of your budget as a pizza, and instead of the number of slices, you assign a percentage. You allot 40 per cent for your necessities like utilities and rent, 30 per cent for your groceries, 20 per cent for your credit card debt, and 10 per cent to spend on yourself. Thinking in these terms will give you a better picture of your money while spending on yourself within the budget limits.

2. Establish clear splurging rules.

Once you determine how much you can afford for a splurge, form a set of ground rules to make sure you don’t go overboard. For example, if you’re planning to give in to an indulgence, pay with a debit card or with cash. If you need to put it on your credit card, then it means you’re not able to afford it at this time. If you’re expecting a big tax refund soon, ensure that you’re allotting a bigger portion for your savings and not spending it all on splurges.

3. Avoid impulse buying.

Impulse purchases are probably the number one cause of one’s budget being in shambles. For some people, it’s almost an instinctive reaction to get their credit cards ready when they see something they like, whether online or at a store. An effective way to avoid this is to create a mantra and follow it, like Taco Tuesday. You can establish your own like Bubble Tea Sunday or Cheesecake Friday. This means that you’re allowing yourself these indulgences only on those particular days. This way, you can guarantee that you’re not giving in to impulse buys.

4. Make the splurges count.

If you truly want to make the most out of a splurge, then plan splurges that allow you to spend more time with your family and friends. For example, if you and your friend have been longing to see a band in concert, you can designate this as your splurge. Through this, you not only get to spend time with your friend, but you get to enjoy it too.

Splurging from time to time is beneficial for your mental and emotional health. Being too restrictive of your funds can lead you to feel deprived, and then it becomes to feel like a burden. You can allow yourself a few indulgences here and there, but be sure to follow the tips above so your spending still sticks to your budget.

Sources

Baluch, Anna. “How To Treat Yourself on a Tight Budget.” The Balance. https://www.thebalance.com/how-to-treat-yourself-on-a-tight-budget-5079687

Fellizar Kristine. “How much money should you spend when ‘treating yourself’? We got expert advice.” HelloGiggles. https://hellogiggles.com/lifestyle/treat-yourself-money-expert/

Juliano, Maggie. “The science of splurges: what do dieting and saving for retirement have in common?” Benefit Consultants Group. https://www.bcgbenefits.com/blog/the-science-of-splurges