Once you’ve managed to stick to some sensible spending limits for a few months, you’ll eventually come across some reason to splurge on an item. Maybe it’s a cashmere sweater or a Nintendo Wii, or maybe just a romantic weekend away somewhere. Before you started budgeting, you just did these things, but now it seems wrong – but that’s no fun at all!
The fact of the matter is that living a more frugal lifestyle usually means cutting out these expensive splurges. It is often these very things – the neat electronics and expensive clothes – that gets people into debt trouble in the first place.
There are several routes that you can take to deal with the urge to splurge and not slaughter your budget and positive financial direction.
Talk yourself out of it. Look at the item and continually ask yourself whether or not you really need it. If it’s a “splurge” item, you almost assuredly don’t need it, so for many people, this is enough to convince them not to buy.
Look for a lower cost alternative. Let’s say you’ve got an itch to buy a new sweater and you saw an amazing one at the local clothing boutique that you’d love to have. How about looking online for similar sweaters, or flipping through a Land’s End catalogue instead? Quite often, you can find identical (or nearly identical) items for just a fraction of the cost. This is not a reason to buy it, but it can be used in conjunction with other ideas.
Add a “splurge” line item to your budget. This amount is there to build up over time and allow you to occasionally buy expensive items. The best way to do this is simply to put this amount in a savings account somewhere and forget about it until you get an itch for an expensive goodie, then limit your spending to what’s in the splurge fund.
Take that money and do something else fiscally sensible with it. You want to spend $250 on a Nintendo Wii, or $400 on a sweater? You even have that much cash in hand? Take that cash and apply it towards a debt instead, and see how you feel a few months later when the finance charges and interest rates aren’t nipping at your heels any more.
Take that money and give it to charity. Why not take that $400 and give it to a wonderful charity? The Simple Dollar recommends the Child Abuse Prevention Center. Not only can you involve yourself in this charity to see what good your money is doing (instead of merely getting yourself yet another sweater), but you can also deduct that amount from your income taxes, adding some money back into your coffers.