Save vs. Splurge: When to Do Both

Conflicting Impulses 

Having money complicates life.  When all the bills are paid, and the important things are taken care of, there is sometimes a little leftover.  What to do with that little surplus turns into an agonizing decision.   

On the one hand, good old-fashioned wisdom says to save it; sock it away because you never know what might be coming down the line.  But then there is the “now” impulse that does not want to put off life for some indefinite day.  Is there a way to combine these two drives into a happy medium? 

When to Save Money 

The old common wisdom to save money whenever possible is not just prehistoric advice.  Emergencies happen, big purchases loom, and certain joys are just not possible without taking the time to save up for them.   

There should always be some money put away into a fund that is not touched except in case of an emergency.  Aside from that, it can be easier to get motivated if a person is saving for something.  Pick a trip, a car, anything that is currently out of reach, and start putting a little away at a time – that way it’s like spending, only in advance!  

When to Splurge a Little 

It might sound self-indulgent to try to justify splurging on fun.  Spending money frivolously is a recipe for staying permanently on the edge and never moving forward.  But that does not mean that life needs to be one big “No!”.   

Save intentionally; plan for a day to spend and set aside how much to splurge.  That way the freedom in going wild diminishes because the limits have already been set.  This goes for vacations, date nights, whatever experience might require a little wiggle room in the wallet.  Set a goal, set a limit, and then go for it when the time comes. 

The Best of Both Worlds 

Combine these two ideas with a budget and a priorities list.  Set the budget to determine exactly how much money is available, and to be sure that the appropriate amount has been saved.   

Always save first, because it is impossible to un-spend money, but saved cash can always be repurposed.  Once the actual amount available is known, make a list of priorities – not necessarily big things, but the day today.  Where can some cuts be tolerated, and where is the splurge impulse strongest?   

Then, save for everything in the save column, and spend in the other.  Skip eating fast food and buying wine to have at home in order to have that morning coffee at your favorite shop.  Or instead of going to the movies weekly, use the money for an online subscription service.   

Make every spending event count.  That way, everything is done on purpose and there are no financial surprises!