Jan 31 2013

Reward Yourself (without Breaking Your Budget)

Piggy Bank with SunglassesYou know it’s important to save—but did you realize the occasional splurge can actually help you stay on track with your savings goal?

It seems counterproductive, but it’s true. If you never indulge, you’ll begin to resent your budget. And the point of your spending plan isn’t to show you where you should and shouldn’t be spending money, but to make sure your cash flow is aligned with your priorities.

And rewarding yourself when you meet a goal—say, paying an extra $50 on your loans this month or finally stashing away enough for an emergency fund—helps to reinforce the idea that your budget should be working for you, not the other way around.

Try one of these ideas to indulge without blowing your budget.

Free Splurges

  • Take advantage of perks: Have a coffee punch card that’s full? Rewards points on your Visa Platinum Card? A coupon that makes the pricey item you’ve been longing for fit into your budget? Use them when you need a treat for all the thrill of a splurge at no extra cost to you.
  • Find free entertainment: Join your library’s book club, head to a park, or check out free local events. Whatever your interests, you’ll be able to find something fun without spending anything.
  • Focus on the enjoyment: A splurge doesn’t have to be something outside of your normal routine. It could just be taking the time to fully enjoy the moment. Really savor your dessert or the way you feel after working out.

Small, Regular Indulgences

  • Save in one area to splurge in another: If you’re planning a girl’s night out, for instance, you can save money by cooking dinner together before heading out. You get all of the fun at half the price.
  • Splurge on one unnecessary item and savor it: For example, you can be budget conscious about your grocery list, but add one indulgence like gourmet chocolates or a pricier loose-leaf tea that you’ll enjoy throughout the week.
  • Upgrade occasionally: If you always buy the cheapest version of a product, splurging on the higher quality version once in a while won’t break the bank. Pick up a nice body wash instead of bar soap or buy a latte at that great café rather than toting your regular daily coffee from home.

Save Up for Big Ticket Items

For anything with a larger price tag, we recommend setting up a fun savings account (not your emergency fund) where you can stash away extra cash. Then once you have enough for a vacation, an upgrade to your car, or whatever it is that motivates you to save, you can go for it without the guilt.

As long as you’re sticking to your budget, go ahead—reward yourself!

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