When you’re managing a frugal lifestyle, it can be difficult to let yourself splurge or know when it is appropriate to do so. There may be a certain pressure you feel to seek permission from someone who is more familiar with finance and budgeting than you, which is perfectly fine and smart!
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To help you determine what you, a frugal person, should feel OK splurging on, GOBankingRates has rounded up insights from both financial experts and a retail pro, the latter of whom can point most efficiently to specific types of products that are worth the extra money — even when you’re on a tight budget and keen on minimizing spending.
Healthcare
Healthcare costs are among the biggest sources of debt in the U.S., but you can often succeed in staving off some of that debt from unexpected medical emergencies by enrolling in an expensive healthcare plan.
“While some may not consider it a ‘splurge’, paying for good health insurance and healthcare needs to be a priority for everyone, even those on tight budgets,” said Jay Zigmont, PhD, CFP, founder of Childfree Wealth. “If you don’t take care of your health, or don’t get regular checkups, you are likely to have a larger bill in the future. If the choice is between paying for an expensive med that helps you and other discretionary spending, health should win.”
That Latte
For some controversial — but hopefully useful — insight in this arena, consider what Robert R. Johnson, PhD, CFA, CAIA, professor of finance, Heider College of Business, Creighton University, has to say on the value of splurging on that daily latte.
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“One of the biggest targets of individuals chastising people for unnecessary expenses is the daily latte purchase — a purchase that Suze Orman abhors. But, for some individuals, that daily latte purchase brings them a great deal of pleasure. Quite often, it is more about a sense of community and fellowship than a caffeine fix. For many the time spent at the local coffee shop is about interacting with friends and is an important part of their day.”
A Hobby You Love
We spend so much time working and thinking about work. When you find a hobby that sparks passion in you, it’s wise to make room in your budget for a little splurge on it here and there.
“One thing that I would always say is ‘acceptable’ to splurge on is simply something that adds real value to your life,” said Yasmin Purnell of The Wallet Moth. “If you have, for example, a hobby, subscription, weekly treat or similar expense that brings true joy and value to your life, you should keep that expense in your budget at all costs.”