Updated on 06.05.14

Some Thoughts on Balancing “Fun” Spending and Planning for the Future

Trent Hamm

One of my biggest splurges each year comes in August, when I travel to Indianapolis with a few friends and attend GenCon, a gaming convention. During a given year, my wife usually goes on some sort of trip by herself as well, often to visit family in the Pacific Northwest.

I usually pick up a new game and a new book about once a month, on average. Sarah’s more of a reader and tends to pick up two or three.

We go out to eat perhaps twice a month as a family.

Sarah and I tend to buy each other fairly nice gifts for gift-giving occasions.

All of these things are splurges. Each of them are expenditures that are purely for personal enjoyment that would be easily cut out of our lives if we were to do so.

I’m absolutely in favor of some degree of splurging in everyone’s life. The ability to freely experience the things we enjoy is a wonderful aspect of modern life, and eliminating it completely from our lives leads only to misery.

The challenge comes in when the cost of splurging begins to interfere with other aspects of one’s life. It’s particularly dangerous if splurging actually makes it difficult for you to pay your bills, but it’s also an area of concern if splurging is keeping you from moving forward on your goals and plans for those goals.

I’ll use my own life as an example. One of our biggest goals is to eventually buy a home in the country, hopefully before our children grow up. We’d like to build a home that includes a nice home office (rather than the small reconstituted bedroom I currently use) and a few other features, as well as a small barn in the back.

In order to achieve that goal, we had to establish a savings plan that would pay for that home in eight or so years (ideally paired with a rapid payoff of our current home’s mortgage). It’s an aggressive plan, but it’s a big goal that both my wife and I want to achieve.

Splurging is not allowed to interfere with that goal. Covering our monthly savings for that goal comes first before any splurging.

In other words, we treat our financial goals as bills that have to be paid. Once those bills are paid, we can then focus on the splurges we want in our life.

So, for example, I save slowly throughout the year for my GenCon trip. I put away about $20 a week all year long and when the trip arrives, I can easily afford the whole trip – the food, the travel, the hotel stay (usually, I’m in a room with several other people), and the event participation, often leaving myself with enough cash to pick up a game or three.

How do we determine how much we have each week or each month with which to splurge? Sarah and I each have a “splurge” line in our effective family budget. We’re each allowed to spend a certain amount each month without question. If we don’t spend it (or aren’t saving it for some specific goal), it just rolls back into the general pool, helping all of us.

Family-wide splurges usually come out of our excess money at the end of the month, as we constantly come in under budget (since I usually budget for the maximum for almost every bill).

An important thing to note is that I could easily define things like cell phones, television service, and internet service as splurges. All of these services are useful to us, but all of them are also, in essence, splurges.

Again, if splurges get in the way of your long term goals, cut back on them. Yes, that might mean your cell phone or your cable box.

Another good rule of thumb I’ve found is that if a splurge no longer feels like a splurge – in other words, it no longer feels special – it’s time to cut back on it.

My GenCon trip is a highlight of my year, so it always feels “special.” On the other hand, if I get a new book more often than once a month or so, it begins to feel routine (especially considering I can read public domain books for free quite easily or just pick up something on PaperBackSwap).

In the end, splurges come around after your goals are taken care of. If you find yourself splurging without taking care of your goals first, your future won’t be what you want it to be.

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  1. Eugene says:

    This makes a lot of sense. As long as you’re “paying yourself first” (i.e. making provision for investing, savings, debt, etc), what you do with the rest of the money doesn’t matter. The idea of allocating income into “envelopes” or fixed proportions doesn’t make sense if your priorities are different.

    If one person wants to spend a ton on clothes and forgo eating out (and someone chooses to do the opposite), that should be fine. As long as the essentials are provided for upfront, it shouldn’t matter.

  2. Anna says:

    My husband and I allow room for splurging in our budget, but when encountered with a job loss, we knew which things were splurges and had to go temporarily, and which things we actually needed. I think when you confused needs with wants, or somehow feel that you are entitled to getting things that you want, it skews your perception of what is really necessary. We had a few months that we were living off of one income (mine) without any unemployment to soften the blow (it’s complicated) but fortunately we had enough money saved and could cut back to a pretty frugal existence, so we made it through without any long term financial damage being done. It was not a fun situation, and not one that we felt like we needed to maintain after my husband found a job again, but we proved to ourselves that we could do it. We are now back to our normal level of spending, but we know that if we really needed to strap down to save (more) money, we could do it again and it wouldn’t be the end of the world.

  3. Tracy says:

    I don’t think of things like ‘we know we’re going to buy 3-4 books and a new game a month’ as splurges, it’s more like budgeted nonessentials. A splurge is something that’s more extravagant and less predictable.

    I think if you’re defining everything as a splurge, it loses the impact of the word, which

    1. an ostentatious display, esp of wealth
    2. a bout of unrestrained extravagance

    I have a splurge fund, but it’s money that I put away every month for something that I *don’t* know what it’s going to be for. It’s saving so if something that I really, really want to do or have comes up, I can afford it – whether it’s a last minute trip or getting a new iPad. If it’s predictable, it’s not a splurge, it’s just a budget item.

  4. Adam P says:

    A splurge for me is a 2 week trip to South Africa to go on Safari. It is not a paperback from Barnes and Noble, since I’m not in debt and make a decent income. I guess it’s all relative to your financial position but Tracy makes a good point.

  5. jackson says:

    Occasional splurges are fine and are what makes life fun. For me, I bring lunch to work every day but on paydays, I splurge and buy it. I tend not to buy items for myself, but instead spend money on an occasional gift for my children.

    It’s important to stay on a budget and keep goals in mind, but is okay to treat yourself every once in a while, too.

  6. Nick says:

    I personally like @3 Tracy’s definition of “splurge” versus “budgeted nonessentials,” too. But that’s purely semantic.

    Either way, the point of the post is that it’s good and healthy to allow yourself to spend money on your wants instead of your needs, so long as the Important Stuff is taken care of first. So in that respect I think Tracy is really in agreement with Trent.

    Also, Trent’s big example was GenCon. Sure he planned on it, but that’s not exactly a paperback either!

  7. Tanya says:

    I like your point about treating financial goals like bills that have to be paid. I also like your point that if a splurge doesn’t feel special, maybe it’s time to cut it. Buying a new item or piece of clothing just because you’re in the mood to shop and you want to buy SOMETHING leaves you broke and feeling empty. Buying an item that is a treat or something you budgeted for is easier on your budget and you’ll enjoy it more.

  8. Tracy says:


    It’s true, I mostly am in agreement. The reason I said this was not to be nitpicky, but for two reasons.

    The first is that words and their definitions matter and using them incorrectly bugs me a bit.

    But the second, although related, is far more important. If he’s saying “Sarah and I splurge on 3-4 books and a new game” it’s actually doing the opposite of what I think Trent is trying to do, which is convince people that living within a budget doesn’t mean having not having fun.

    When everything that’s not food and shelter is defined as a splurge, I think that’s a problem. For some people, that’s what they need to stick to a budget, if they give themselves an inch, they’ll take a mile and rationalize that since they already ‘broke’ it, they might as well buy more.

    But I think for most people, that idea that it’s a special treat to get a couple of books is going to sound so unpleasant and restrictive that it’ll turn them off completely rather than open them up to how if you pay attention to your spending, you can make your budgeting work *for* what you love.

  9. Kern says:

    If i only have 1000$ in hand and i tend to buy a new iPhone 5 because:
    1. It may help me a lot in work.
    2. It’s a wonderful entertainment device.

    Is it splurge ?

  10. Change Relationship says:

    I agree that we sometimes splurge because it will somehow motivates us. This article is very informative. Thanks for sharing.

  11. kate. says:

    “Another good rule of thumb I’ve found is that if a splurge no longer feels like a splurge – in other words, it no longer feels special – it’s time to cut back on it.”

    Oh my. I think I need those words tattooed on the back of my hand so I don’t forget!

    A few years ago I was living WAY beyond my means. I was house poor, putting every penny into my massive mortgage, property taxes and essentials. The word splurge was not in my vocabulary. (Neither was budgeted non-essentials, for that matter.) I’ve since (almost 4 years ago now) gotten both a raise and moved to a more affordable house and have quite a bit more discretionary funds in my budget. There was a bit of a backlash of spending that I experienced (shopping, travelling, LOTS of eating out) once I had money to spend. This has gone on for FOUR YEARS. (Ouch!)I’ve recently set some long term saving goals for myself. When looking at my spending trends for 2010 and making a budget I was kicking myself for how much I wasted doing things that were great, but didn’t really feel special anymore. I could’ve been close to paying off my second mortgage by now and I would have a lot more financial freedom. Argh!

    Thanks so much for sharing this. It really hit home and is helping me to focus on my goals and really treat splurges as such, not the status quo.

  12. Alana says:

    I bought three new books today. It was the first time I’d bought a book since August, and it definitely felt like a splurge. I’ve been only temporarily employed on and off for the last year and a half, so non-essentials like new books are definitely a splurge. I do still manage to travel and I’m currently taking a class for personal development – but these things are goals that I save up for and not splurges. The books feel like a splurge because they’re not planned for and not essential in the way that my personal goals are essential. They come from money that’s not already spoken for, and having that kind of money at all is a rare and special occurrence in my life.

  13. Comment from UK. Incidentally diesel in the UK topped $8 a US gallon here. You lucky people !
    As for paying off a house in 8 years, Brits tend to think of it as a lifetime debt and I think some Europeans even pass the debt on to their descendants. But looking at the price of USA property on Ebay I get the impression I could buy a decent looking place with my tiny credit card these days ! Those folks really must be hurting. At least they are not subjected to tsunamis. That is a dreadful disaster. Why don’t they buy a few cruise liners and get thousands of people out of that mess ?

  14. Michele says:

    What perfect timing! I don’t care whether you call it a splurge or a budgeted non-essential, either way your timing was perfect for me, Trent. After about a year and a half of unemployment, I’m currently working two jobs to make ends meet. One job is an evening job, and recently my daughter and I decided to meet after work every other Friday night to go to the movies. It’s been great fun, and we both really look forward to it. So in that sense, I guess I really do prefer the word “splurge.” “Splurge” sounds much more special, more magical, than a simple budgeted non-essential. If it’s no longer special, then it’s just become a costly habit.

    On the other hand, I also spend a fair amount of money each month on books, as well as occasional CDs or DVDs. Since I love reading, it would be tempting to throw these purges into the splurge bucket. But the fact of the matter is, oftentimes the purchases are impulse buys, and they’re added to stacks of already unread books. All at the same time that I’m no stranger to my local library and PaperBack Swap…places where I could get the same books for no cost whatsoever. In this case, my “splurge” has become simply a habit out of control.

    Just last night my daughter and I mentioned the impact our movie night is having on our respective budgets, and we both mentioned that if necessary, we take on extra work hours to pay for it. That’s how special this night still is for us. Thanks for writing this piece to give me a way to consider my “splurge” in relation to the rest of my budget and financial goals. Keep up the great posts!

  15. Emily says:

    Trent – would you be willing to share how much your monthly free spending amount is? My husband and I have been trying this (an allowance of sorts) and I would be curious to know your amount! Thanks!

  16. jennifer says:

    This is one of your better posts. I think it is important to remind your readers that you do leave money for pleasure, and you nicely framed it in the correct priority. We need to be reminded of those basics, bills and savings first, then splurges. How much stress that would save the average American if we could live by these principles. I’m still learning myself, and have been doing much better in recent years. Side note: What do you think of family and/or friends moving in together in these tough economic times to decrease costs of living? I have been considering this with my siblings, and it blows me away how much I could save per month if I paid 1/4 of a mortgage, electric bill, fuel oil, etc as opposed to the 100% we pay now to have our own home.

  17. Jennifer says:

    My brother-in-law does the True Dungeon event at GenCon- you should check it out!

  18. Kathy Robinson says:

    You frequently mention buying books on a budget. I am also a voracious reader. Recently I’ve discovered the book aisles at my local Goodwill. Each time I spend a few minutes browsing there, I come away with an armload of books priced at 85 cents for paperback and $1.20 for hardback. To my surprise, I frequently run across books that are currently on the bestseller lists–apparently not a few people buy these, read them, then donate them rather than hold on to them or pass them on to friends or neighbors! When I’ve finished reading the books, I sometimes find I can sell them on Amazon, which recoups some of my expense. An even better book buy price-wise is the Goodwill Outlet…though there books are not on shelves, but thrown willy-nilly into huge shallow rolling bins, making it difficult to see what the titles are, and the books you find may have been damaged by this treatment.

    Trent, I live in the Indianapolis area and my teen has gone to GenCon…I can’t believe a grown man looks forward to this experience all year!! It is a seething mass of (mostly) teens dressed as manga characters. I wish you could chaparone for me so I could get out of going LOL!

  19. Cat says:

    I fully support having a barn at your future house :)

    I have a really hard time figuring out what to splurge because I don’t just have regular monthly bills but I have college debt. Student loans. I can chalk them up to a necessity but they kill me. I will throw every penny I seem to have from my low paying job and then have none left for “fun” and my friends see me sink into a depression where I internalize everything and don’t go out and meet up with people or take visits etc. I still hang out with my friends on weekends when they are in town (some are still in school) but we do low cost things. It’s all fine and dandy but even low cost things cost money! I know there is no immediate answer to this, but I go between two extremes most times. I pay all my bills. I pay extra to every student loan. I have seen success. Then when something gets significantly lower I spent weeks “rewarding myself” (not building up new debt, not splurging on totally random stuff – but going out for a cup of coffee. Hitting up the bar.. with the snowball money before I get back on track again)

    It’s really hard to find a balance and I wonder how some people still manage to have fun, quality time, and goals when they are burdened with student loan debt. :/ I’m up for any suggestions or critiques, because I could really use a new, less depressing way of doing things.

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