There is a common misconception that that being frugal means being cheap. This is not necessarily the case. Per Merriam-Webster, frugal is “characterized by or reflecting economy in the use of resources.” In other words, frugality is using your money efficiently or, simply put, making smart decisions with your money. I am here to tell you that being smart with your money does not mean you can never spend your money or splurge. It just requires you to put some thought into things before making purchases. For example, shopping around for the best price on an item (see 10 Apps To Save You Money) or getting multiple estimates for house renovations and choosing the one who is cheapest (but only if you are not sacrificing on quality).
Aside from using your finances efficiently, you can still live a normal life. You don’t want to be such a tyrant when it comes to spending money that people stop inviting you to hang out or that you no longer even allow yourself to have fun. Actually, that’s the whole reason it pays to be smart with your money, so that you have the money to spend on things you want to. Of course that doesn’t mean you should buy every single thing you want because that would put you back to square one, having no money. But I do encourage some splurging, or indulging. Think about money splurges the same way you have cheat days when you’re on a diet. A majority of the time you eat ONLY healthy foods and occasionally allow yourself a treat in order to avoid binging on the bad stuff.
I’ve got a couple indulgences that I allow myself. My favorites are: food, travel and clothes. Yes, I’m your stereotypical girl who loves shopping! The difference is that I’ve built a “clothing allowance” into my budget, so that I give myself a set amount to spend each month. A majority of the time, I spend under that amount (go me!), but I occasionally do spend the full amount and sometimes even go over, but it all balances out in the end. I also have a restaurant budget each month (separate from groceries) because my husband and I enjoy going out to eat and try new places.
Travel, on the other hand, isn’t necessarily a monthly expense, as in we don’t travel every month; however, we have an allotted amount that we put in an online savings account each month to help us save for travel. For example, we are planning to take a trip to Hawaii next year (as mentioned in my short-term goals post). In order to do that, we have been saving since our wedding last year. We treat this savings amount like a fixed cost in our budget like any other monthly bill we have, such as our mortgage. In order to determine how much to save, we estimated quotes for airfare and the hotel we want to stay at and divided that total amount by the number of months from then until the trip. See below for an example of how we calculated the amount to save each month:
Estimated Hawaii Trip Cost: $7,000
Date of Estimate: August 2016
Date of Trip: May 2018
Number of Months to Save: 22 months
Amount to Save Each Month: $8,000 / 22 = $318.18 ~ $320 per month
The point of all this is that you shouldn’t feel bad about splurging on yourself, as long as you’re smart about it. Plan things out as much as possible by budgeting for expenses and saving as far ahead as you can. Make sure that when you’re splurging on yourself, you’re not building up debt to do so. If we bring back the diet comparison from above, you don’t start eating desserts on day one of your diet before you’ve even made any progress. You get a cheat meal or cheat day as a reward for your hard work and dedication. The same should be true for your finances. You shouldn’t be focusing on treating yourself before you even have a savings account built up or before you contribute to your retirement account.
To prove that splurging is okay, I thought it would be interesting to find out what some of the other personal finance bloggers splurge on. I’ve gathered up the answers for you below.
Michelle of MakingSenseofCents.com: “Anything outdoors related – bikes, gear, RV stuff, etc.”
Alyssa of MixedUpMoney.com: “Definitely Starbucks! And I’ll always splurge when it comes to music (whether it be Spotify or Apple).”
Bobby of MillennialMoneyMan.com: “Gas for our boat”
Kevin of DiligentDividend.com: “Yes, food and cars”
Stefanie of StefanieOConnell.com: “Travel, eating out & my biz”
J. Money of BudgetsAreSexy.com: “I buy coffee every single morning, and old coins here and there for my collection”
Sam of FinancialSamurai.com: “Splurges are usually house related. For example, splurged on two $500 HansBrohe kitchen faucets to replace perfectly fine ones. Why not.”
David of ZeroDayFinance.com: “Gas + tolls to visit my fiancée, and gifts for my family.”
As you can see, just because these bloggers are great with money, doesn’t mean they can’t spend a little extra on things that make them happy! They have all established themselves financially, first, and now have the freedom to splurge on the things that they want to. It’s all about balance and after some hard work and dedication, don’t we all deserve some sort of reward? 🙂