Questions to Ask Yourself Before Deciding to Splurge
Most people live with a tight budget. This could mean they can only afford their needs due to their small income. For others, it is because they are saving up for other plans, like their retirement and investments. But even those who are from well-off families don't splurge on themselves that much.
According to financial experts, it does not hurt to reward yourself for as long as you can keep up with your financial goals. To some, they can only reward themselves after they managed to delay their purchase and save up for what they want. To help you decide when it is worth splurging, ask yourself the following questions.
Will Spending Provide Long-term Happiness?
Many of us will buy the latest gadgets, clothes, and shoes or book travels on instinct. Some managed to stop themselves and wait it out before investing. But if your investment won't bring you long-term pleasure, then it is worth skipping the splurge.
Think of everything you buy and pay for as an investment. If it won't serve its purpose for a long time and you cannot utilize it for the long term, then maybe, it is not worth your time and money. Invest in things that will bring you long-term happiness, and you will never regret your decision.
For instance, you plan on building a gaming computer. This can be a sensible splurge if your old computer is no longer working and you need one as powerful as a gaming PC. If you are sure to use this for a few hours each day and for a long time, then it could be worth the splurge.
But if you only plan to buy a new computer just because these look cool and sleek, it is worth passing the opportunity. There is no point in buying something you won't be able to utilize. This is especially true if you are already tied to a limited budget.
Can You Afford It?
When was the last time you bought something out of your credit card? Think about how long it took you to fully pay your credit card debt. As much as possible, you will want to buy a splurge with the extra money you have after paying your bills and setting aside your savings.
As a general rule, think twice if the splurge requires you to swipe your credit card or apply for a loan. There are such things as good debt. But if it is not a house you can comfortably afford, a medical bill you need to pay asap, or an emergency you need to pay for, it is not worth the splurge.
Avoid buying things if you require financing to afford them. It would be a better idea if you can buy a splurge with cash. This way, you can realistically tell yourself that you indeed can afford it.
Will the Splurge Get in the Way of Your Financial Plans?
Some people try so hard to stick to a monthly budget. They try to incorporate the 50/20/30 budget rule. This is to make sure they set aside enough cash for their needs, wants, and savings.
If you don't allocate your income accordingly, you can end up investing in a splurge that can ruin your financial goals. You need to make sure it will not ruin the integrity of your savings. You also ought to ensure it won't stop you from paying your financial obligations in time.
A new pair of shoes on sale can be a great purchase, considering the discount. But if you buy this without calculating your expenses plus savings that month, this can affect even your future budget. Remember that a splurge is not worth it if it will compromise your financial goals.
Do You Have Adequate Rainy Day Funds?
Experts always tell us to invest in an emergency fund before we invest in other things. Your small, inexpensive, but unnecessary purchases may seem innocent enough. But when you compute these all together, this can leave a dent in your monthly budget.
You will not appreciate having to pay for unexpected expenses when you can barely afford your monthly bills. It helps to ensure you save enough rainy day funds before you splurge. Experts say that one should have at least three to six months' worth of rainy day funds before you even consider a splurge.
You definitely deserve to treat yourself every once in a while. But the does not necessarily mean you should already allow your financial goals to suffer. If you find yourself debating whether a splurge is worth it or not, know that you can use these questions as your guide.
Meta title: What to Ask Yourself Before Splurging on Something
meta desc: Splurging on yourself can be a nice and fun way to unwind and reward yourself. But the question is, when is it worth doing it for yourself? Learn more.