Splurge the Right Way to Maximize Your Satisfaction

So you’ve been doing a good job of saving up money and not blowing your entire paycheck on frivolous buys. Great job! But before you decide to treat yourself, make sure you know how to splurge in a way that doesn’t completely demolish all the hard work you’ve put into your financial house. Just like with car insurance, there’s a right way and a wrong way to go about spending your hard-earned cash. Make sure you know where a particular path leads before you head down it.

Know Where Your Every Penny Goes

Before you buy something nice for yourself, know how and where you’re spending every penny of your income. By conducting a money audit, you might find you’re spending a bit too much on eating out or ordering delivery. There might also be services such as music and video streaming you can either do without or reduce to a less expensive plan. The money left over can go into savings or be used to pay off other bills.

Lower Your Other Expenses as Much as You Can

Something else to do to feel better about the money you splurge is to reduce necessary expenses as much as possible. For instance, you actually might be better off not making extra principal payments on your mortgage or car payment every month. You should also take excellent care of your car and drive it for as many years and miles as possible to avoid the costs associated with a car payment. There might also be areas in your life where you can save money, such as buying used products rather than new. See if your favorite grocery store has a discount card, if you can bundle your insurance policies to save on the overall cost and cook more at home rather than eating out all the time.

Automate the Savings Process

Rather than manually put money back into a savings account every time you get paid, something you might forget to do, you can automate the process instead. There are special programs and apps that automatically put a specified amount of money into your savings accounts whenever you wish. If you find you aren’t strapped for cash when your savings is automated, it’s a good indication you’re doing a good job of handling your finances, which often makes it easier to splurge whenever you wish.

Set Up a Reward System

If you truly want to earn the money you splurge, set up a reward system. For instance, if you give your house a thorough scrub-down, you can put back $15 into your mad money account. Manage to eat healthier this week or this month? Kick back another $15. When you reward yourself for being more responsible, it’ll feel that much better to be a bit irresponsible with your splurge. Just make sure you don’t cheat when it comes to this reward system. Otherwise, you likely won’t feel as good about going on a little shopping spree.

Top Off Your Emergency Fund

To better ensure you don’t feel guilty about past surges when financial hardships hit, do everything you can to build up your emergency fund before you do something nice for yourself. Once you put money into your emergency fund, it’s best you do everything in your power to not touch a penny of that money if it’s not for an actual emergency. Such emergencies should be ones that threaten to put you and your family out on the street, empty all your other accounts or endanger either your health or future income. Because it can be hard to gauge just how much such emergencies can cost, you’ll want to save more than you actually think you’ll need.

To get the most out of splurging, you’ve got to take steps to eliminate some of the guilt that can come with splurging. Put these tips to good use, and take care of your financial needs before tending to your financial wants.