Consumer Comeback Blog

How to splurge without going into debt

I love lobster. Whenever I go out to eat and I see it on the menu, I have a hard time choosing anything else. And since it’s usually one of the most expensive options, and I’m not made of money, it’s not a decision I take lightly. But every now and then, I go for it…because I can.  And even though the occasional lobster dinner won’t send me into debt, I can probably do better by my budget.

You need to treat yourself every once in a while. You do. You could be the most frugal and practical person in the world, but every now and then, you need to open up your wallet to a little extra spending for yourself or a loved one. Money doesn’t buy happiness… but it does buy many things that can make you happy. For me, that’s lobster…

Still, that isn’t an excuse to be irresponsible about it.

In fact, it’s my intent to argue that when you do decide to splurge, it should be just as thoughtful (if not more-so) a purchase as anything on your regular budget. Just because it’s something outside of that budget, doesn’t make it okay to let it derail your financial track. Because if it does, you could find yourself deep in debt before you know it…

Know thyself

This is the easy part: knowing what you enjoy. Splurging shouldn’t be some thoughtless wave of a credit card for something you found on a whim. It should be on something you truly enjoy. It can be anything from clothes to cars, vacations to home electronics. Maybe it’s something as simple as going out for drinks with friends every once in a while. For most of us, it’s usually a number of things…

The point is: focus your recreational spending on things you truly enjoy so that you can get the maximum enjoyment out of your budget… In one word: prioritize.

Now the hard part: being realistic about what you can afford. You may have a deep passion for something that’s just not in the cards, at the moment, financially. It’s when you can’t identify these things that you end up in trouble. Credit gives us access to things that we otherwise wouldn’t be able to afford. But when you use credit to buy things you want, rather than fulfilling basic needs, that extra spending will cost you extra. Bigger debt bills means less money to spend on your normal budget and/or future recreational spending.

Know what you can afford and avoid utilizing credit to feed your desires…or be very careful when you do.

Plan & Budget

Recreational spending should be as much a part of your regular budgeting and financial planning as anything else. One of the best reasons for creating a personal budget is so that you have a better understanding of how much extra spending money you have. That way you know when it’s appropriate to spend the extra few dollars on yourself or when you need to cut back.

If you plan and budget properly, you never have to use credit for these kinds of purchases. Budgeting, planning, and saving up for the things you enjoy is responsible and can even be quite rewarding.

Don’t let your spending dictate your budget: make your budget dictate your spending.

Splurging can be frugal

Splurging on yourself doesn’t mean that cost and value are considerations to be ignored. It doesn’t mean foregoing any effort to find a good deal or consider cost saving options for your purchases. Perhaps it sounds like a bit of an oxymoron, but frugal splurging is one of the keys to stretching your budget to its max. The truth is, in many cases, finding deals on recreational spending items may be even easier than those every-day purchases…  Milk goes on sale a lot less than Lobster, for example.

The key, like any purchase (really), is to get the most out of your money. But, instead of focusing primarily on spending the least amount of money on your purchase(s) to fill a need, when you splurge, you can focus on getting the most value out of your spending.

For example: say you enjoy Skiing. It tends to be a very expensive hobby, but there’s plenty of options for saving money for those trying to maximize their time on the mountain and/or for those who are on a tight budget. Purchasing skis (for those who go enough) usually saves money in the long-run even if it is expensive up-front. Still, finding used skis or last year’s models can save a significant amount of money. Also, lift tickets can be quite pricey especially if you aren’t actively trying to find deals. Season passes, night skiing, group purchases, and a number of other cost saving options are more than just wise to consider. A little more than $500 might be all you need to buy a pair of used ski’s and a season pass…otherwise it can cost you up to $100 per day (including rentals) for the same mountain. There are about 90 days of winter…you do the math.

Just because you’re splurging on yourself doesn’t mean you shouldn’t be trying to find the best deal. That includes:

  • Waiting for sales/discounts
  • Comparison shopping
  • Group/bulk purchases
  • Considering used items
  • Renting/leasing
  • DIY

Don’t just do research: become an expert

Getting great value isn’t just about finding quality items at a good price. It’s also about being able to identify the quality and performance of those items. Not just for the longevity, reliability, or resale value (all of which are important), but also for the item’s intrinsic value. The fulfillment of your passion, if you will. The best way to identify and take full advantage of such value (intrinsic or otherwise) you need to do extensive research as possible – and not just for finding the best deals.

It’s difficult to be passionate about something without knowing much about it. And it’s those that immerse themselves in their passion who seem to get the most out of it. Not only because they’re best qualified to identify value and quality, but because they enable themselves to create that value for themselves.

Being more hands-on means being able to stretch your purchases further than most. For example: If you’re into cars and can do much of the labor yourself, you will save money that can be used elsewhere or even find value where others cannot (like refurbishing an otherwise undriveable car).

The best. Lobster. Dinner. Ever.

Last month, after going out to dinner and skipping over the very tempting $45 boiled Maine lobster (as my budget was rather tight at the moment), I couldn’t get the idea of my favorite shellfish out of my head. Determined to stay on budget, I decided to wait until they went on sale at the grocery store. This past weekend our local grocer had a very nice Labor day sale on Maine lobsters ($5.99/lb)

So I bought 2…

For around $13 (less than 1/3 the price of the dish at the restaurant) I was able to eat twice the amount of food, and It was by far the most satisfying lobster meal I’ve ever eaten.

I couldn’t tell if the food tasted better because I cooked it myself, because I didn’t have to worry about how it would have looked in public when I (literally) sucked the meat out of the shell, or from the smug satisfaction of paying 1/6th the retail markup. But I think it was a little bit of each, to be honest.

Treating yourself…splurging…doesn’t have to mean spending a lot of money.