I got the biggest shock of my life the day I realized that living on a budget wasn’t the straitjacket or rigid “diet” I assumed it would be. In fact, it was my life as a credit-card junkie that put me in financial bondage.
A budget saved my life because it allowed me to get out of debt. It gave me back my freedom. Want to know my secret for staying on a budget for so many years? I splurge. Seriously. And I do not feel guilty. I love nice things and I love to travel.
Even while I was getting out of debt, I didn’t banish all of these things from my life. In fact, my occasional guilt-free splurges are what helped me stay on a budget. Since I didn’t feel deprived, I found it a lot easier to stick to my plan.
Calculated splurging is not difficult. In fact, I think you’ll find it makes a lot of sense. And the bigger payoff is the financial maturity that comes with delayed gratification. Planning and waiting really does make you more appreciative.
Make a list. This is the fun part. Think about your splurges of choice. A haircut and color at a great salon? A luxe lipstick? A big-ticket item like a new laptop? Write down all the things you want. Get specific, but don’t worry if you can’t think of everything right now. You’ll be changing this list often in the future. The point is that slowly, one at a time, you can find a way to work these splurges into your budget.
Open an account. Whether it’s a savings account at a bank or credit union, or an online savings account, you need a place to save for your splurges. Make it a place that you won’t be tempted to dip into yet is still convenient enough for you to make deposits.
Review your habits. Sure, you’ve always used that pricey salon shampoo, but it’s important to ask yourself whether that’s a meaningful splurge or just an old habit. Check the drugstore: You’ll find great brands for a lot less money. Same goes for the grocery store. Do you need a specific brand of canned veggies, flour or cereal? Probably not, so go for the cheapest. Here’s a good rule of thumb: Say no to say yes. In other words, cut back where it doesn’t matter so you can buy the things that do.
Find the cash. Start thinking of ways to bring in a little extra spending money to fund your account. Perhaps you can sell some things online. Determine to spend $10 less at the supermarket this week, and put that money into your account. Next week, make it $15.
Take your coupon savings in cash and add that to your splurge account. When you get a raise or pay off a bill, put some of it into the account. Even a dollar or two here and there will add up quickly if you’re consistent. In my house, she who does the laundry keeps the money that ends up in the bottom of the washer. And when I get money for my birthday or a refund on something I return, that money goes into the account, too.
Look for deals. Buy on sale (your everyday stuff as well as your splurges) whenever you can. I am a big fan of Bath & Body Works’ line of body butter, which is a splurge for me. And I don’t deny myself. I wait until one of the store’s big sales (they happen several times a year), which makes the splurge that much sweeter.
Rethink eating out. You don’t have to banish eating out from your life because you’re on a budget. Just shift your thinking: A meal out shouldn’t be something you grab on the run, it should be something special that requires planning. Keep an envelope with restaurant coupons in your bag. Dine where the kids eat free on a specific night. Instead of an entire dinner at a fancy restaurant, splurge by going just for dessert and coffee. Or go for lunch, which is usually cheaper. Same ambience, less money.
Shop smarter. Think about changing where you shop. Instead of the mall, head to a thrift store or a shop that benefits a certain charity, where prices will be a lot cheaper.
Stores that carry gently used items are exploding with business these days, and they’re bigger and better than you might imagine. Discover the joys of consignment clothing stores, where you’ll find better quality and beautifully displayed near-new clothing at hugely discounted prices.
Want to know the best fringe benefit of splurging on a budget? No more impulse shopping. You have time to breathe and to think. And even to change your mind altogether—you may decide to just skip the spa day so you can keep saving for the European vacation. It all depends on what matters most to you.