What is saving to splurge?
By my definition, saving to splurge is putting away extra money you don’t spend to go towards an amazing item or experience you really want – a designer handbag, expensive jewelry, a trip to Bali – even if you might think it is unattainable.
Although it might seem really hard to do and may take a while depending on what the item is – it may actually be easier than you think. So how do you do it?
1. Open a designated account
Well, first things first, you need to open a separate account and name it accordingly – Bali trip, Kenyan safari, Chanel handbag, diamond earrings – whatever you want to call it and then start saving – even if it’s only in a small way.
2. Find ways to allocate spare funds to your splurge account
Saving to splurge should not be at the expense of your life or financial goals but if you have extra cash you already allocate to shopping/fun each paycheck then you could shop less randomly and put aside more for your splurge item. Think about it this way – would you rather have 20 random things you’ll forget about soon or the one thing you really want?
If you can’t afford to allocate any money towards shopping each paycheck there are still other ways you can save. Examples:
- If you are under budget on your weekly grocery bill put the difference you don’t spend in your new account.
- Do you typically buy lunch every day? Try taking lunch to work 2 or 3 days a week and put the difference in your new account.
- Instead of a summer clothing haul, buy a few select pieces to compliment what you already own and put the extra funds towards the one thing you really want.
3. Try out a small savings challenge
Another really great way to save is the 52 week saving challenge where you save the amount that corresponds to the week of the year. i.e. week 1 you save $1, week 2 you save $2 etc You can also double or triple the amounts you save each week to grow your splurge account even faster.
My favorite thing about saving to splurge is that because you are saving over time, it gives you a chance to assess if you really still want the item you are saving for or if you’d rather put the funds towards something else and the best part of your splurge account? It’s guilt-free so happy splurging!