While some would grit their teeth and say “that’s not good” you might be surprised at this next bit of advice: Do it, but not too much.
People who live by a strict budget and do not allow for the small, occasional indulgences are generally viewed as boring, predictable and miserly. You should at least reward yourself for sticking to your plans with such fervor.
Try to avoid allowing your frugal lifestyle to turn into a hardship on you or others in your family. No one likes to live with someone who won’t splurge every now and again. It is a fun thing to do, and can help you “blow off” some pent up stress or anxiety.
Better it is to try to strike a balance between preparing for the future while enjoying the here and now.
Take the Tough Out of Saving. Most people connect saving with budgeting. And that is a correct view of that activity because you might need to make a budget in order to find enough money to place in savings.
However, budgets require a strong will to carry out. And sometimes, that willpower can falter. So, keep this in mind: everyone makes mistakes. Do not lose sight of your goal, which really is to manage your money on a regular basis. If you are performing well in that, then a one time lapse will not destroy you or your goals.
But, make sure your splurge does not affect your budget of regular monthly expenses. Do not put yourself in the position of not having enough money to pay your bills on time.
Use Automatic Depositing. One of the best ways to make sure you are saving on a regular basis is to set up an automatic deduction from your paycheck and place it into a savings vehicle of your choice.
One of the quickest ways to become rich is to contribute the maximum to your 401k or other long term (retirement type) plan. And, the tax incentives are on your side. Combined pre-tax and Roth 401k after-tax contribution limits are $15,500 for 2008. And, workers over age 50 can contribute up to $20,500 due to catch-up contributions. Sweet.
Small Increments. If you cannot save the maximum then try to increase your contributions to retirement and savings on a graduated level over time. Use a percentage point or two as a gage. Also, if you find yourself getting a raise, then put that increase right into your savings accounts. You will not even feel it missing since you never saw it in the first place.
In summary: Keep savings from being willpower dependent, make savings automatic, and splurge once in a while. You have earned the right. You work very hard for your money, enjoy a little bit of it now and again.
Share and Enjoy:
Having an occassional splurge is mandatory to me. I usually don’t go too big. I can do some damage at CVS Pharmacy or Target sometimes when I’m in that kind of mood to buy a lot of stuff that I don’t need. At CVS and Target it never amounts to too much $ in the end.
Good post.
- Alex