When is it OK to spend money on yourself?
One of the most common financial wisdom is to skip on gratifications – buy home brands, cut back on takeouts, make your own coffee, stay in for the weekend and more. However, most financial experts agree that frugality is not always helpful. In fact, there are some circumstances where spending will bring more benefits to your life than saving.
“There is more to life than repaying debt or saving for a rainy day,” said Ryan Guina, founder of Cash Money Life. “Money is for spending. Money is for living.”
Here are some of the occasions where you do not have to lose sleep over splurging.
When you’re in a transition
Life changes – be it a new job, a new city or a breakup – can be difficult to navigate. Setting aside some discretionary cash will help you start afresh and settle in. Making acquaintances, becoming part of a new community and rethinking what you want out of life often means spending money. During these times, don’t feel guilty about taking a class, trying out neighbourhood restaurants, joining book clubs or buying new clothes – they are likely to be worthwhile expenses.
When quality is important
Being frugal does not always mean resorting to the cheapest options. Longevity comes at a cost – a low retail price may not mean much if the product wears out more easily or needs to be replaced after minimum use. For example, getting a budget vehicle may not do your wallet any favour if they are a gas-guzzler or require frequent repairs, upgrades and maintenance works. The same goes with furniture, appliances and other everyday items such as bags and wallets – is your time worth the hassle of dealing with broken products?
When time is key
It’s wise to prepare a fund for a rainy day, but there is also a positive side to seizing the day. A recent study published in the Journal of Marketing Behavior found that delayed gratification can backfire as we wait too long to enjoy special things. The researchers discovered that people were more likely to wait for the “right” occasion to use things that are labelled as more special, such as chocolates from a fancy boutique or a VIP concert pass. Moreover, those who delayed were eventually less satisfied with the things and expressed more regret than those who did not wait.
Our time in the world is limited, and there can only be so much memories. If your financial health is in shape, do not put off your plans. Cash out that gift card, take your dream trip, go and attend that concert – in other words, enjoy the things that prompted you to save up in the first place.