What are your life’s little luxuries? You know, those things that you could go without, but really enjoy when you indulge in. For some, it might be eating out. Others may consider going to the movies every month a luxury they really enjoy. For me, the first thing I can think of is a small frozen custard chain called Andy’s, which isn’t anywhere near cheap. It’s hard to walk out of Andy’s with two sundaes and a bill under $10, but it’s worth it to us because we enjoy it a lot and we have room in our budget for it.
You can read article after article telling you to cut back on the small things – and that can work if you want to transform your spending habits. But, for those who have a good grip on their money, there’s no reason why you shouldn’t be able to enjoy the small luxuries without breaking your budget.
Here area few practical ways to balance your budget as well as create room for the fun things you may consider to be luxuries.
Keep the Change
Bank of America coined the phrase ‘keep the change’ with a program that rounded up each transaction you made and put the change into your savings. You can do something similar with your spending (especially if you use cash) and save for the next month’s luxuries with this month’s change. I don’t know about you, but I enjoy turning things like this into a challenge to see how much I can save in the quickest amount of time.
Trade up
I’m not suggesting that you make it a habit to always feel the need to trade up or get the next best thing. When I say trade up, I mean take and sell something that you don’t use in order to offset the cost of the luxury. This does two things: it keeps contentment in check and forces you to make a decision about what’s more valuable to you. For example, if buying and reading new books is one of your luxuries, make it a point to sell an old book on Amazon before you buy a new one. It’s simple, but it’s a powerful and wise money habit to keep.
Tie a Carrot to it
Everyone enjoys a reward every once in a while. Set goals and reward yourself for achieving them. This can work especially well if you make goals that encourage smart behavior like: working out, achieving certifications, balancing your budget, reaching savings goals. Once you reach your goal, feel free to splurge within reason. Make it a set amount, of course, and be on the lookout for new goals and incentives that you can create.
Make it Special
There’s nothing wrong with treating yourself, but when you do it so often that it loses its luster and becomes commonplace in your finances, you might need to step back and reaffirm that it’s a luxury, not a necessity. If you enjoy dinner out with your spouse, make it a special thing, not just another day eating food. The same is true about any other luxury that can easily become habitual.
So what is it for you? Do you have a little luxury that you look forward to each month? How do you budget or save for it? Share with us in the comments!
Tim is a personal finance writer at Faith and Finance a Christian financial help blog that provides financial insights for individuals, businesses, and churches. Outside of finance, Tim enjoys spending time with his wife, playing the saxophone, reading economics books, and a good game of RISK or Catan. Find him on Twitter and Facebook and subscribe to the Faith and Finance RSS feed.
My wife and I liked to go for holidays every three months or so. My work is really stressful. So I needed to relax. I used to use my credit card alot. So naturally the debts got higher. After reading a few books like Rich Dad Poor Dad and The Richest Man in Babylon I controlled my spending on luxuries like that. I note down everything that I spend right down to the early morning latte and lunchbreaks. Found a few things that I actually give up as my company provides breakfast and lunch for its employees. Managed to reduce the credit card debt by not using. But my work is still streesful and I need a break.
What I do every month the money I save from reducing my early morning latte and lunch, goes to a separate savings account for that holiday. I am also on the lookout for packages that is of value and cheap. There are alot of travel agents offering such.