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It’s OK to Splurge


Being intentional with your finances often requires sacrifice, determination, and commitment. If you lack these characteristics, you will often fail to meet your budget (or as some people call it, spending plan) each and every month. I recently published a list of 16 ways to improve your finances. All of these items focused on these three principles.

Yet, we all know that sticking to a budget is more difficult than we often make it sound. People often talk about the latte factor, estimating how much you can really save when avoiding unnecessary spending. After all, if you don’t buy a $5 latte each day, 5x a week for a year, you can save $1300 per year. Yet, we rarely talk about how hard it is to avoid purchasing that latte. Perhaps more importantly, sometimes it’s unnecessary to be so strict with your finances. I’ve recently come to the full realization that it’s okay to splurge sometimes.

Why Being Too Frugal Can Be Bad

Most people in the realm of personal finances often say that being too frugal is impossible. They understand frugality as a great quality in a person. Yet, they often see it only in this aspect. Their understanding of frugality is one-dimensional. Yet, in reality, frugality can go too far. Extreme frugality is not always a good thing. Sometimes it can go too far.

A great example of a frugal lifestyle hurting you more than helping is that it keeps you from enjoying life. My wife and I were barely struggling to make ends meet just after we got married. I was going to grad-school full-time while working 30 hours a week and my wife was working 50-60 hours a week. Between the two of us, we were able to pay the bills and have about $200 extra each month. We typically spent 1/4 of this eating out once a week and the other bit was used buying items that were absolutely necessary.

Yet, even as we started to make more money, we kept to our strict budget. We decided that we wanted to prioritize savings and retirement investments, and in order to do that we had to limit our splurging. When friends invited us out for drinks or to a movie, we would suggest that they come over to play board games. Spending $50 on drinks and snacks in one night just seemed like too much money to throw around for one night of fun. The number of invitations slowly decreased and before we knew it, we were without a social life. Being too frugal cost us big time!

Introducing the FUN Budget

It wasn’t until we started to have a big enough cushion each month that we started to let ourselves splurge a little. I started supplementing my day job income with income from a new hobby and my wife got a promotion. We now have some money to spend and since we are still saving for our future, we decided it’s okay to splurge a little.

We are still afraid of rapid lifestyle inflation though, so we implemented a “fun budget” (as my wife likes to call it). Each month, we can spend X amount of dollars on things that are not necessary. In other words, this money is spent purely because we want to. Just recently, we spent an entire month’s worth of our fun budget on a portable dishwasher (it had to be portable since we are renting). We could keep washing our dishes by hand, but we would much rather splurge and save ourselves some time.

After implementing our fun budget, we realized that we are able to enjoy ourselves so much more. Managing our finances with a little freedom allows us to really enjoy the moment. After all, we never know that we will be around next year. I would hate to think we sacrificed too much for our future that we might not have. Last but not least, we have developed some important friendships (you could say we found a great return on our investment).

Understanding that you can splurge a little helps you enjoy yourself more as well as take the pressure off. Managing your finances successfully does not mean that you have to take frugality to the extreme. Prioritizing spending and limiting your splurges can be a healthy approach to your personal finances.

This post was written by Corey, a staff writer from 20’s Finances. He blogs to give young adults the materials needed to conquer financial challenges.



My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.


  1. I am not really familiar with Fun budget but I think a lot of people like me should be aware with it.. Anyway, thanks for the help here..

  2. Thank you for saying this Corey. I usually read the contrary but think when will someone say it’s ok. I one time tried to save 20 on parking in NYC. I drove around for 2 hours and couldn’t find a spot. I got so hungry and had to use the bathroom that I paid for a meter that was close to 10 and then was so far away from home I had to go grab something to eat. In the end I spent 3 more than I should have and lost so much time in the process.

    • That sounds like a horrible experience. Yes, parking can be horrible in NYC.

  3. I agree, a fun budget is needed. All work and no plan just can’t be good for a person.

    • Somehow the importance of balance always comes into play.

  4. Absolutely need to have some fun. There’s no prize for being the richest guy in the cemetery. Use it while you can.

    • haha – that’s a great way to put it. What about a really big gravestone?

  5. I tink a little fun should be in every budget. The fun may or may not cost money, but is necessary.

    • I agree – I still find myself looking for cheap ways to have fun.

  6. Good advice. Being financially responsible means knowing how to spend as well as how to save. And in the long run, you need to have some fun in life even if money is tight, right?

    • I agree – that’s a great way to put it. Finances is about saving and spending. 🙂

  7. It’s important to strike a balance. If you budget yourself into a corner, it’s easier to go overboard in spending when you give yourself permission to spend. At least that was my experience.

  8. Totally agree! Sad thing is I have a fun/spending money part of my budget and I never spend it… d’oh! Then it gets big and I don’t want to blow it all and it makes it harder. I really need to loosen up!

    • haha – yeah, my wife and I told ourselves that we don’t have to spend it. It’s just there if we really want something.

  9. I agree, you have to have fun in life or what is life about. I’ve never seen a Brinks Truck in a funeral procession. Be frugal, but have fun!

  10. I think living balanced is key. Being extreme with anything including frugality is not healthy. We should save money but we should also spend money on the things we need to have and a few wants to. That balance is the only way one can feel truly content and happy. Who wants to waste their life be feeling miserable the entire time?!

    • Exactly! Sometimes I think you and I are the same person, Miss T. haha

  11. Excellent point on the fun budget. After all, you should gain some enjoyment from the money you worked hard for.

    I know a few people who pinched every penny to save for retirement, and then they never were able to enjoy spending money after retirement because they’d trained themselves over decades to get no enjoyment from spending money.

  12. I think being able to meet your financial goals also means having like-minded friends. They can be your insurance for not splurging too much. You should have some fun and enjoy life but if you truly can’t afford it then where will it lead you to?

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