Buzz
There's no harm in the occasional treat as long as it doesn’t interfere with your financial objectives. The issue lies when we splurge without thinking. To counter this, consider adopting Financial Samurai’s responsible spending ratio.
This concept is similar to the 'spend to save rule' but with a bit more clarity. Financial Samurai suggests that if you're planning to spend $1 on something non-essential, you should first allocate $2 towards a responsible financial action, such as paying down debt or saving for unexpected expenses. Below are a few more examples he recommends:
Sell $2,000 worth of unused items like clothes, shoes, electronics, and other household clutter before splurging $1,000 on the latest ultra-high-definition TV.
Pay off $10,000 of student loans before setting aside $5,000 for a luxury international getaway.
Pay down $1,000 on your mortgage principal before splurging $500 on concert tickets.
Of course, these are just illustrations, and your personal circumstances will vary, but the principle remains the same: indulging is fine as long as your financial foundation is stable. For a deeper dive into this concept, check out the full article linked below.
Image courtesy of Pictures of Money
