*The following is an article that I wrote in partnership with Digital Federal Credit Union, DCU*
You deserve to have some fun and spend money on the things you enjoy while you’re in pursuit of achieving your financial goals. Spending in a way that aligns with your values and that brings you joy while working to get out of debt or save for future endeavors is possible, here’s how:
Budget in advance for upcoming purchases or things you know you want to splurge on:
We all have things we enjoy doing or want to do in the near future that require money. They can be something little or something big like taking an annual vacation or buying clothes to upgrade your wardrobe. All of these things require money. Think through all that you’d like to do or purchase over the next couple of months and years, then create a plan to save towards them over time. Include a line item in your budget for each expense and work backwards on how much you need to save monthly to pay for it. For example, if you’d like to upgrade a few pieces in your wardrobe and you estimate it may cost you $600, plan out how much you can afford to put aside every month, so that you have the money available to use when the time comes.
Save for unexpected splurges and give yourself room to live in the moment:
Let’s be real … you don’t always know what you want to spend on in advance. Sometimes a cool opportunity comes up at the last minute. Maybe a friend is unexpectedly in town, or you see something that you really want to buy. Create a line item in your budget or spending plan for these unexpected splurges. You can label it “Miscellaneous” or “Fun Money,” call it whatever you want and decide how much you want to put towards it every month that will allow you to still meet your other goals and living expenses. It can range anywhere from $10 to $100 a month, depending on your cash flow situation. You also don’t have to use all the money in that account each month if nothing worthwhile comes up for you to spend it on. You can rollover any money not used in your “Fun Money” line item so that it accumulates overtime. Look into opening a savings account to help you keep focused on that goal. For example, DCU – Digital Federal Credit Union has a Primary Savings account that offers their members a higher Annual Percentage Yield (APY) on eligible balances — that’s higher than many savings accounts. So, your “Fun Money” earns you money while it sits in your savings account.
Take some time before making a purchase to make sure it’s something you want:
Give yourself space in your budget to make an unplanned purchase. Living in the moment is great and being able to spend without guilt allows you to really enjoy the fruits of your labor. But, for more expensive purchases or spur of the moment buys, give yourself some time to think through if you really want it or not. Give yourself at least 48 hours or even up to a week between seeing something you want and actually clicking the “Buy” button. This extra time allows you to remove the impulsivity that is harmful to your overall financial wellbeing. If you find that you still want that item and have made a plan to pay for it, then go ahead and buy it from a place of assuredness and power. The worst thing is to purchase something you think you want and regret it later because it was impulsive and out of alignment with your true values and goals.
What’s the point of paying off debt and reaching your financial goals, if the journey isn’t fun? There’s a way to enjoy your life and have fun now, you just need to create a plan that leaves room for both the expected and unexpected things that are bound to happen. Finding that balance so you can feel good about your life now and achieving your long-term goals is essential to your overall financial wellness.