The Right Way to Work Splurges Into Your Budget

When you have goals you’re trying to save for, you might think that spending money on something fun is out of the question. But an all-or-nothing approach to spending can actually lead you to crash and burn. Deprive yourself too much, and it can eat away at your willpower and eventually lead to a spending binge.

“The human brain becomes exhausted with too much restraint,” says Elisa Robyn, a wealth relationship psychologist. “People can use up their willpower and the ability to resist temptation over time. When you’re ‘on empty,’ you’re unable to resist the next item or experience that tempts you.”

By giving yourself some flexibility to spend money on things that bring you joy, you’ll not only have an easier time sticking to your budget, but you’ll also have the motivation to continue working toward your financial goals. And with 2021 just around the corner, a splurge could be exactly what you need after a challenging year. Here’s the right way to work splurges into your budget.


Just the way you set savings goals, set a splurge goal for yourself — an amount that you can work into your budget that is used to treat yourself. The amount of the splurge and how often you want to commit to it is up to you; maybe it’s a dream vacation  once you feel safe enough to travel again, or a  getting your favorite takeout for dinner once a week. As long as you can work it into your financial plan, you should be able to splurge and save at the same time. “I suggest that clients set a savings goal and then a reward plan so they know how much they can spend each week or month on something special,” Robyn says.


When you plan ahead for the things you truly want, you’ll have an easier time resisting the temptation of casual purchases. “Not only will you avoid blowing your budget, but you’ll also get the most value from your spending,” says Nathan Hamilton, director and industry analyst at consumer finance site The Ascent. The goal is to replace deprivation with anticipation. “Think back to being a kid — waiting for Christmas morning was part of the fun,” Hamilton says.


Check in with yourself about how your fun purchases make you feel. Are you fulfilled by them? Or do you feel like that money could have been better spent? The answer could mean the difference between splurging and wasting money. “Splurges can be driven by the need to fit in with a group of people, or be part of an image you want to create for yourself or think you need to live up to,” Robyn says. “The more you overspend in an unsatisfying way, it’s more likely you’ll want to splurge more.” 

For instance, if your splurge is a monthly online ordering shopping spree that leaves you with a bunch of unworn clothes in your closet, then maybe you need to think about what actually makes you happy. Perhaps an experience would have been money better spent, which is what Robyn recommends. “Remember that experiences are more important than stuff,” she says. “We are better off splurging on memories than the newest item that we really do not need.”

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