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11 November 2020
Having a financial budget is like maintaining a healthy diet, and just like having a cheat day for your diet, once in a while, you will have the occasional urge to splurge. In fact, studies have shown that depriving yourself of these urges could do you more harm than good in the long run. But how do you splurge without breaking your budget?
When people think of a budget, they sometimes think of extreme discipline and financial sacrifices that leave no room for any excess spending. But truth be told, life is not always about saving money. Sometimes it is okay to treat yourself and splurge on something once in a while.
However, you should not blow your entire savings away on a single purchase. So, how can you make your splurges count and align it with your long term financial plans? Here are a few handy tips.
Save your extra cash into a separate splurge account. By building it into your budget, you are less likely to feel guilty when spending on something you do not necessarily need. This will also ensure that you also will not feel deprived and end up randomly draining your bank account without thinking it through.
Research from Cornell University shows that money spent on experiences brings us greater happiness than material things. This means that a fancy dress or new watch might not be as satisfying as using your money to enjoy a beach holiday, see a play, or go diving with some friends. You might even get some joy from planning and anticipating the event, the experience itself, and the lifelong memories that come with it.
Don’t check everything out of that cart just yet! Give yourself some time to reflect before you key in your card details and count the days before your package arrives. Leave the items you wanted to buy at the checkout cart to stew for a bit and go on with your day. If you still want it 24 hours from now, then by all means go ahead and treat yourself!
If you are dining out every night of the week or constantly buying some cool new toy, these splurges will quickly lose their appeal and cease to give you the same satisfaction it did at first. However, if you are splurging more sporadically, it feels special when you do indulge. Alternatively, you could save up a few months’ worth of splurge money for something bigger and longer term.
When it comes to shopping for something, there is always more than one way (and more than one price) to splurge on the stuff you want. A quick Google search and maybe if you asked around, you will discover there are many types of loyalty cards, discount websites and online promo codes that can make your splurge a little more worthwhile. Sometimes it is also about timing - monthly sales promotions and special events like Singles Day will give you a better bang for your buck.
At the end of the day, it is nice to reward yourself for all the hard work you do. It serves as a good reminder that you are progressing with your financial goals and is also a great motivator to continue with your financial journey. Remember, just don’t spend it all in one go!
The above articles are intended for informational purposes only. AIA accepts no responsibility for loss which may arise from reliance on information contained in the articles.