It goes without saying, but a majority of us want to improve our finances in one way or the other. Statistics consistently show that many of us have improved finances as a New Year’s resolution year in and year out. Achieving these goals requires some level of discipline, resilience, and commitment to doing better.
But believe it or not, some level of indulgence is required to reach these sorts of goals and remain within a healthy financial mindset. In this article, we’ll talk about how this is and ways that balanced indulgence can be leveraged for better financial situations.
What Is Balanced Indulgence?
When we think of indulgence, we imagine throwing all caution to the wind and giving in to our simplest impulses. This means eating the entire pint of ice cream or spending our entire paycheck on a handbag. How then, you may ask, does this create a better financial mindset?
The answer lies in the word ‘balanced’. Just like with anything else, reckless indulgence will hardly lead us anywhere good and instead, could even wreck our finances. But balanced indulgence means deliberately planning and budgeting to have a bit of fun. Balanced indulgence means setting aside a portion of our income for fun and even frivolities. This essentially means anticipating that you’ll want to splurge a little bit and creating room for that to happen.
The way many of us see it, the only way to have a good financial mindset or situation is to never indulge. Some people believe you should never spend on leisure or luxuries and every penny should be spent on necessities or saved/invested. While this might sound good in theory, it really translates well in reality. Because we are humans, we will have certain impulses and, to an extent, will want to give in to them. Balanced indulgence doesn’t pretend that this will not happen and instead plans for it.
Compare it to a diet. Many people go on extreme diets with the assumption that they will never snack or eat anything outside of their meal plan. But as the statistics already show, a majority of people will eventually cave in, eating an entire pizza after subsisting on vegetables and water for days in a bid to lose weight.
But how do you go about engaging in planned indulgence, and how will this translate to a better financial mindset? Here are a few tips:
Define Your Indulgence
It might seem like a small step, but it is important to define what indulgence means to you. Because, on closer look, what you might consider an indulgence is not what someone else will. For some of us, an indulgence is the handbag we’ve been eyeing in the store. For others, it is a meal at a restaurant. For others, it is experiences like online gaming.
This is especially true as online gaming has become quite popular in the last few years. Different platforms offer a myriad of games, and some of us would want to indulge. As a CardPlayer article explains, new US casinos are seeing a record number of users, and if you plan to join this number, it’s best to decide ahead of time. That way, you can properly allocate funds towards the purpose. Of course, always make sure it’s an amount of money that you are willing to lose.
Create A Budget
The foundation of any good financial mindset is budgeting and planning, and this includes balanced indulgence. Your first step should be taking stock of all of your income and expenses for every month, year, and so on. Create columns for each category of spending, including housing, food, transportation, and so on. Make sure there’s adequate provision for saving, but also put aside an amount of money for indulgence. By having this budget, you are already planning to spend money on a few niceties without impacting your overall budget.
Separate Funds
Another way to engage in balanced indulgence is to separate funds. One of the easiest ways to mess up your financial plan is to combine all of your funds and end up spending from different parts. A part of your rent money gets used on shopping, and then you have to take out a different pot to cover it and might end up overspending.
Instead, put your indulgence money on a separate card, in a separate account, or even in cash in a separate envelope. That way, you know exactly how much you have to work with and that once it is gone, it is gone. This will, interestingly, help you in other aspects of your finances as it will teach you to separate parts of money and use them only for their specified purpose.
Look For Money Saving Alternatives
Once you choose to pursue balanced indulgence, look for ways that you can do so while spending as little as possible. Say your idea of indulgence is the handbag back. Rather than buying it outright, look for websites that sell it at a lower price or dupes if you are comfortable with that. You could also use platforms like Honey and price alert extensions that will tell you when the bag can be bought cheaper. If your idea of indulgence is a restaurant visit, look for coupons online that will allow you to save money on various meals.
The internet is chock-full of ways to enjoy a fun lifestyle on a budget, and by leveraging this, you will find ways to save in other aspects of your financial journey.
