When to Splurge and When to Save
KIMBERLY PALMER
Sometimes, even budgeting experts say it’s OK to splurge.
For Jen Smith, co-host of the “Frugal Friends Podcast” and co-author of “Buy What You Love Without Going Broke,” responsible splurging meant buying costly hurricane-proof windows for her home in St. Petersburg, Florida, an area with a history of bad storms.
“It’s for the safety of our home, and we saved for it,” she says.
Deciding when to splurge on an expensive purchase can be tricky, and even Smith admits she initially felt guilty about it. Her podcast co-host and book co-author, Jill Sirianni, explains that part of the challenge of splurging is that “we’ve been sold a binary that you’re either a saver or a spender, but in reality, we all spend and we should all be saving.”
The trick, Sirianni says, is knowing when to embrace each tendency.
If you’re trying to decide when to save or splurge, here are some questions to ask yourself first to help you make an optimal decision:
DOES THE PURCHASE FIT IN YOUR BUDGET?
“Starting with a budget will increase our awareness around spending money,” says Gerald Grant, Jr., a financial advisor with Equitable Advisors in South Florida. Grant suggests keeping the budget simple, with categories for essentials as well as “wants,” and then tracking spending closely to make sure it aligns with your financial goals. If you have a budget, it’s easier to decide whether or not to splurge on something because you can check to see if it fits into your larger plan.
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