6 Ways to Splurge Strategically (and Get the Most Bang for Your Buck)

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Splurging feels synonymous with overspending and impulsiveness—but it doesn’t have to be. If you're smart about your budget, you'll have the means to spend a bit extra on high-ticket items or experiences. After all, the goal of budgeting isn't to deprive yourself; it's to prioritize your spending so that there is enough money to go around.


By definition, splurging just means spending on a luxury without worrying about the effect it has on your finances. It doesn’t have to be an impulsive, mindless purchase. You can plan for splurges—and you should. By living frugally you can get your spending and lifestyle inflation under control. However, being too restrictive with your spending can backfire. You get tired of pinching pennies, so the next time you feel the urge to splurge, you go overboard. Without any guidelines in place, this can put serious strain on your piggy bank.

The solution? Set aside some money for a splurge. Allow yourself the occasional frivolous indulgence, just make it mindful and create some guidelines around it. Figure out how much you want to put aside each month for your splurge, then keep it in a separate account or earmark it in some way. That way you have the money on hand to treat yourself the next time you're tempted.


A splurge fund will help make your spending less impulsive, but ultimately, mindful splurging comes down to, well, mindfulness. Splurging strategically means optimizing that purchase: Go for something you'll be able to enjoy often.

For example, a $300 pair of shoes you’ll rarely wear might not bring you as much joy as the $4 lattes you'd like to buy daily. On the other hand, if you wear the shoes often, they might be a better use of your fun money after all. Take stock of your own habits and preferences in order to make smart splurging decisions.


A study published in the Journal of Positive Psychology found that people "enjoy greater well-being from life experiences [rather than material items] and consider them to be a better use of money." The idea is that you feel a deeper sense of fulfillment and create memories that will last.


However, a tech junkie might get more out of the new Apple Watch than a fancy dinner out. And while a playoff football game is an experience, it's one only sports fans are likely to enjoy. You want to splurge on the areas that mean the most to you—so it helps to know what those areas are to begin with.

Make a list of the three areas in which spending brings you the most joy. It could be travel, electronics, spa visits, restaurants, or any other non-essential that makes you happy. Use this as your guide to understand and better divvy out your discretionary spending. If you notice you dole out a ton to restaurants, for example, and it’s not in your top three, you know you’re giving up something you love to pay for something you like.


Even with a splurge fund, excessive spending can be tempting. Rather than rely on your own willpower to resist that temptation, have some guidelines in place to rein yourself in. For example, make it a rule to consider the effect of your splurge. Over at Becoming Minimalist, author Joshua Becker explains:

Whenever you feel the pull of consumerism, simply ask yourself the shortened version of this thought, ‘What might I be able to do if I didn’t make this purchase?’ Every purchase contains an opportunity cost. The question, "But what if I don’t?", forces us to recognize and articulate it.

Or, if you want to buy something outside of your budget, you could make it a rule to save more for another goal first. Let’s say you want to buy the latest $600 smartphone, for example. Allow yourself to splurge only after you pay off an extra $1000 of student loan debt. You may have to cut back on other areas to afford both, but this helps you keep sight of your long-term financial goals while you meet your immediate desires. Similarly, you could establish a rule that, for every splurge, you save the same amount. Spent $20 on fancy cocktails at dinner? Move $20 to your savings account.


If your goal is to get your impulsive spending under control, the best rule of thumb to follow is to wait. If you want to buy something you haven’t budgeted for, make it a rule that you can only buy it if you’ve waited a certain amount of time. Chances are, you’ll rethink your priorities. (And if that expensive dress or concert still seems like a great idea, it probably is.)