Saturday, February 5, 2011

Go Ahead, Live a Little and Splurge

I stumbled across the Ask the Readers section on Wisebread yesterday. What do you splurge on? They ask. Well, that’s simple enough, good food, of course! With food trucks, unique ethnic cuisine, and all of those fancy schmancy Michelin Star restaurants, the SF Bay Area attracts foodies (me included!) like a giant magnet. But the more I thought about it, the more complicated this question seems to get. Maybe I just like going on tangents or maybe there’s actually something to this. The problem with the word splurge is that it’s relative. In my current state of only have a $100 discretionary fund, almost everything can count as being extravagant. Buying lunch with friends for $12 plus transportation costs? Well, that’s 1/5 of my monthly budget spent in one (half) day! Splurging? You can say that.

But like I said, it’s all relative. These are small ticket items in my tiny budget. The things that will truly impact my finances most immediately are the big ticket items. I guess this means small gadgets, food, coffee, and occasional clothing items are out of the picture. That leaves…oh! The thing that I’ve been budgeting FOR!

Travel. It’s one of the reasons I discussed as to why I created a small monthly budget in an earlier post. During college, I was fortunate enough to meet fellow students from all over the country (and the world). Of course, this also means that when we all graduated, we were scattered across the world…great if you want to explore new places, but terrible for someone building wealth. I’ve already planned three trips this year: a visit to my alma mater in the Northeast, a wedding in the South, and a reunion in the next state over. After looking at airfare and hotel prices, it’s looking like these excursions will set me back $1,500 to $2,000. Ouch! Splurge? Without a doubt. That’s why I’m constantly on the lookout for deals while pinching every last penny I have.

Now I can claim that I HAVE to go to the wedding and the reunion to (re)build relationships, but I know I’d be lying. When it comes down to it, you almost always have a choice. There’s no question that I can afford it, but I won’t be able to build as much savings if I don’t make other sacrifices. The way I see it is that you shouldn’t deny yourself of happiness even if it’s a little expensive. Well, as long as you can actually afford it and not spend everything you have or get into debt.  However, do yourself a favor and promise that you will make an effort in the long term to cover your financial losses. Trust me, you’ll be better off when you retire with a significant amount of asset to splurge however you want.    


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