How to Budget for Both Splurging and Savings

You’ve been so good about saving your money and sticking to your budget - maybe so much so that it’s been years since you’ve needed relief from credit card debt or help from a payday loan. How about a break? We could all use a holiday from our hard work every now and then.

After all, successfully sticking to our resolutions requires luck to a certain degree, but ultimately it is up to us to exercise self-discipline. Rewarding ourselves every now and then is how we stay motivated to stick to our goals in the first place.

Related: Is saving more money one of your New Year resolutions? Here are 5 New Year's Eve traditions to ring in good fortune.

Creating a Budget You Can Stick To

It’s like sticking to a diet so you can earn yourself a cheat day. But of course, you don’t want to splurge so much that you fall back into old negative spending habits.

There’s a balance to be found here. Splurging, like anything else in life, can be good for you or it can be very bad. It’s all in how you go about it. So, if you’re thinking about treating yourself to a break from your budget, here are some things to think about first!

Use Credit Card Rewards

Why not use points from your credit cards to splurge? Most credit cards have a reward program you can take advantage of for those times you want to treat yourself. Every time you’ve swiped your credit card in the past, you’ve probably accumulated points.

Check your credit card statement to see how many points you’ve accrued. You can use these points to redeem gift cards, air miles or even cash. It’s a smart way to splurge, and you can treat yourself without even touching your hard earned cash.

Plan Before You Splurge

Before you go on your splurge, figure out what you’d like to treat yourself to first. For example, if you want to purchase a new TV, shop around a bit to decide what model or brand you want, and research where the best deals are.

There’s no sense in rushing to the store and buying the first thing you see. Research what you want, figure out if it falls within your budget, then go treat yourself to it. This is a common-sense step that’ll allow you to splurge without spending more than you need to.

Buy Reasonable Items

Splurging doesn’t always have to mean buying big. You can stick to smaller items and still feel rewarded and satisfied. Go to the store and buy yourself a new shirt, a pair of shoes or maybe a record to add to your collection.

Collectively, these items may only cost about $100. That’s better than spending $1,000 on one big thing. Besides, you’ll want to go on more splurges in the future. Buying small gives yourself more room for future splurging.

Splurge on Experiences, Not Stuff

It pays to splurge on experiences rather than material things. Many material items end up on a shelf only to collect dust and be forgotten, but experiences last a lifetime. You’ll always cherish the trips you took and the memories you made during them.

Use this opportunity to splurge on something like a vacation or a trip to your favorite theme park with friends. You’ll get so much more out of the fun you’ll have than anything you could buy at a store.

Balancing Your Savings and Spending

You don’t have to deprive yourself of the things you want to stick to your budget. People on diets have cheat days. People who work hard all week take the weekend off to relax. You deserve a break from budgeting just as much. It may seem counterproductive at first, but by going on the occasional splurge, you’re actually keeping yourself motivated to stay the course and avoid needing a title loan down the road.

Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.