When we’re putting our financial future ahead of our current desires, it can feel like any bit of indulgence is a sign of weakness. But having some luxury now and then can help us stay on track with our financial goals. The trick is to keep your indulgences mindful and something you consciously work and save toward. Not only is the anticipation of an event or splurge just as fun (or sometimes more fun!) than the experience, but having something to look forward to lets us recommit to the rest of our financial goals.
Although it’s true that money can’t buy happiness, having something to look forward to can sure make everyday living a little more fun. Having a plan to spend a bit of money helps ensure you’re saving for the future while not restricting yourself too much.
Before you take this as a license to spend everything you’ve worked so hard for, pause and reflect on a bit of indulgence that would make your life easier but not break the bank. Use the following methods to help you make a plan.
Determine your priority categories and make a plan to release a little pressure. Some experts advise cutting out all your discretionary spending—such as picking up coffee twice a week. If you were just picking up coffee out of habit and it doesn’t add much to your day, cut it out. But if that pick-me-up is what you need to help you get through the week, it’s OK to keep it in your budget and savor it.
Enjoy that latte without shame but then look at other parts of your budget where you can cut back. If you want to keep your coffee on the way to work, start packing your lunch instead of eating out, or use a bicycle or the bus to commute to the office. Set your spending priorities and find other ways to economize so you can enjoy a little gratification.
Many of the luxury services available today use a subscription method where you pay a small monthly fee that is applied to any purchase you make that month. These services can be a good way to rebuild your wardrobe (especially if you’re returning to the office after a year and a half at home) or to give you another little taste of fun, but you don’t need to continue to pay the monthly fee all year.
After you’ve used your subscription for a couple of months, pause it, and put that subscription fee into a savings account. You can use that money to fund some of your small indulgences, freeing up other funds to add to your investing budget or create a small savings account specifically to return to the subscription when or if you need it again.
Set aside the rewards you get from your cash back or points credit cards and use them to fund a special treat now and then. As we mentioned in our episode on expensive hobbies, planning to use these points specifically for something we love or for small little mood boosters is a great way to lift your spirits and keep your financial plans on target.
You can also cash in miles or points to upgrade a budget travel experience—perhaps flying first class instead of coach or staying at a fancier hotel for the same out-of-pocket price as the budget option.
Monitor ways to boost the points you can earn through the year. New user bonuses or hitting certain spend amounts in specific categories like gas or groceries can add up. Just keep in mind that you need to pay your balance in full every month. Cashback points don’t come close to the interest charges you will pay when you carry a credit card balance.
Fulfill your need for a bit of luxury unconventionally. Instead of traveling around the holidays or over the summer when everyone else does, consider off-season travel opportunities or places that might not be on everyone’s list. You can also take a day trip to explore your city or state, without the need for a flight or hotel stay.
If you like designer clothes, have some fun going to local consignment shops or browsing online sites to hunt for some good deals. Consider clearing out your closet and taking your gently worn clothes to the shop (or send them into the online store) to help you make room in your closet and maybe even earn store credit for future purchases.
When we’re focused on improving our future selves, we can lose sight of the need to make our current lives easier. Although discipline needs to be part of our financial journey, making sure that we allow for some fun is essential too. Luxury isn’t something we can do every day—otherwise, it wouldn’t be a luxury—but with some forethought and mindfulness, we can build in little pick-me-ups to help us live the good life while still meeting our financial goals.