Know When And How To Indulge

Know when and how to indulge

Living a life of financial wellness means being happy with a lifestyle that’s within your means but doesn’t leave you feeling lacking. At the same time, financial wellness means money choices are governed by discipline, not emotion. So, how do you strike a balance between the two? These tips will help you know when and how to indulge to keep a healthy financial balance.

Here’s how to indulge responsibly. 

Live with a budget

To do this:

1. Track your spending for three months.
2. Make a list of all your expenses and income in a parallel column.
3. Tally up your totals and assign a realistic dollar amount to each expense.

From now on, spend only within the allocated amount for each expense category. 

Leave room in your budget for “just for fun” purchases

As you work on building a budget, leave room for the occasional treat. The exact amount will vary by income level, lifestyle, and personal choice. However, wisely choose an amount you can easily afford without feeling deprived. 

Review your savings

Before permitting yourself to indulge, set aside some of your monthly income for savings. Ideally, short-term savings should be enough to keep you afloat for 3-6 months if you have no source of income. Long-term savings should support your retirement and any long-term savings goal. 

Choose your “treats”

Everyone’s got a personal vice or three. Look where your non-discretionary money went over the last month and highlight the more expensive impulse buys. Then, hold these purchases up to these questions:

• Did this purchase bring me happiness or positive energy the day I bought it? How long did that feeling last?
• Did this impulse buy blow my budget?
• Does thinking about this purchase now fill me with joy, guilt, or something else?

Use the insight about your indulgences to help you make better money choices in the future. 

Lose the guilt

Once you’ve decided how much you want to spend each month on indulgences, it’s time to let go of guilt. If you’re spending responsibly, you can’t beat yourself up over an impulse buy you could have skipped. Instead, you can maintain your financial wellness by keeping these just-for-fun purchases within your budget. 

Using these tips to know when to indulge, you will be well on your way to financial wellness. If you missed the other steps, check them out on our MoneySmart Tips Blog.