On Saving to Splurge

Over the last few weeks, I’ve had a long conversation with a reader I’ll call Jenny. Jenny has one big thing she loves to splurge on in her life – she likes to take long weekend trips about once every three months, leaving on a Thursday night and getting back late on Monday. Those are her “vacations,” and she goes all over the place on them. She’s been to just about every major European city, much of South America, almost everywhere in the United States that one could even conceive of going, and so on. Aside from this, Jenny is ultra-frugal – in fact, she initially wrote to me with questions about my homemade laundry detergent.

An interesting mix – and so I asked her to explain it in a nutshell.

Travel is *the* thing I splurge on, nothing else. I love seeing the world – it’s the one thing I enjoy above all else. I love going to other places, trying local foods and enjoying local experiences. Because I know that’s what I love to do with my spare time, I’m highly frugal about everything else. I save my nickels and dimes up and then travel every three months or so. I usually try to save twice as much as I’ll need for a trip, then invest the other half, so that I can keep doing this for the rest of my life.

I think what Jenny is doing is brilliant and perfectly matches my definition of frugality – finding the maximum value for you and not for anyone else. Jenny figured out what she values most with her spare time and that’s travel, so she devotes her spare time to maximizing that.

Some additional thoughts:

She’s figured out her passion. She knows that the thing she’s passionate about is travel. Not clothes. Not handbags. Not a flashy car or the latest technology. She wants to travel.

She doesn’t let unnecessary things get in the way of that passion. Compared to that, the rest is all secondary – so why devote money to it? If she spent her money on the latest fashion trends or a new computer every year, she’d travel a lot less – and feel a lot less fulfilled in her life.

But she’s willing to spend to make that passion top quality. She’s taking a weekend-long (Thursday night to Monday afternoon) vacation every three months or so. That’s a pretty hefty expense to incur, without a doubt. Is it excessive? It somewhat depends on Jenny’s financial state, but we do know one thing…

For every dollar she spends on travel, she saves another one for her long term future. That indicates to me that she’s following the right plan. Travel is the one thing she splurges on, and she makes sure that splurge doesn’t get in the way of long term planning. Saving for the future comes way before a weekend of travel – and that’s a healthy personal finance plan.

What about my splurges? Not too long ago, I finally realized that I had to give up some of my hobbies if I ever wanted to achieve financial success. I gave up expensive hobbies like golf (I still have some of my clubs, but haven’t played in about a year) and Magic: the Gathering and focused in on just a few key pastimes (two of which, reading and playing with my kids, are basically free). Nowadays, my biggest splurge is occasionally buying a game for my Wii or DS – much better than the weekend golf outings (with a nice expensive trip to the golf store included).

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