How To Save For A Splurge
posted on Sep 14, 2018 | 95 likes
How to splurge without breaking the bank.
We all are at one point guilty of completely blowing our budget because of a splurge we really want at that time. Afterwards, we feel bad about it but console ourselves by saying, ‘after all, we only live once so why not’. This is you sometimes right?
Saying you’ve never done this either means you’ve never tried to budget in the first place, so every splurge is just another thing you have to buy.
But the thing is, being on a budget doesn’t mean you never get to splurge on anything, it only means you also have to budget for a splurge and it doesn’t have to break the budget. In fact you can save for a splurge like you save for retirement, or save for something you would need later like a new apartment or a new car. A splurge could be an expensive dinner with friends, a new jewelry, a more expensive perfume or traveling and touring. Yes, traveling and touring is a splurge you don’t want to miss all through your young adult life, and if you have missed it, you still have the chance to catch up.
Saving for a splurge is as serious as saving for emergency or something more important depending on what you want to splurge on.
If you are wondering how to get started with savings plan for a splurge, here are two convenient ways you could save to splurge.
Option 1: Set a fun budget
Following the basic 50/30/20 budgeting rule, you could set aside some money from your 50% monthly income which is for your daily needs and keep some money from your 30% which is for the vital wants like cable and internet subscription, gym membership renewal, medical insurance etc, while you leave the remaining 20% untouched for your emergency savings fund.
This can feel unreasonable if you’re living on a super tight budget, or you have big financial goals, but setting aside even a small amount every month that you can spend guilt-free is actually a great way to make sure you can stick to your other goals.
Option 2: Save for your spending
If you know you’ve got a spending season coming up, like Christmas season, summer or your birthday, you can adjust your spending and savings plan to account for it.
During these seasons, there are some things you want to be able to afford without breaking your emergency savings plan. Therefore, it is important to be deliberate about it. Just like you save 20% of your monthly income for emergency needs, you should start a splurge savings account. You don’t have to necessarily visit a bank and queue up for a new account, you can open one with a digital bank like Page Financials that allows you earn up to 10% more on target savings. You could deduct 5% from your daily needs budget and 5% from your wants budget. This would result to a 45/25/20/10 budget guide for you with the 10% for splurge.
With a splurge savings plan similar to that of your emergency savings plan, you are all set for a guilt-free spending time with yourself, friends or family.
Not only would you be very happy with yourself, you would also feel like you are splurging on free money.
Remember that a solid budget should have room for splurges.