By Kris McDowell
We all deserve a little treat, a little splurge, once and a while. When done in a responsible manner, it doesn’t need to be something that will negatively impact your overall financial outlook. Amy Reeves, OnPoint Community Credit Union, offers some suggestions on ways to keep your plans on track while rewarding yourself.
Use rewards
Many credit cards these days are “rewards” cards which accumulate points when they are used for purchases. Rewards vary depending on your credit card company; sometimes they can be redeemed for cash and sometimes they can be redeemed for gift cards or discounts on products.
OnPoint has three different rewards credit cards, one of which earns users two percent cash back on all purchases that is automatically deposited into a checking account annually. Their other two options accrue reward points on purchases.
If you have a credit card and haven’t looked into any rewards that your purchases may be earning for you, now’s the time to do so.
Be intentional
Once you’ve identified a splurge that you’d like to work for, carve out room for the splurge in your monthly budget. Look for ways to temporarily scale back until you’ve accumulated enough to cover your splurge. Maybe that looks like one less meal or drink out every week. It doesn’t have to be a huge amount every month as even small amounts over time will add up.
Be creative
If you have a small budget but big dreams, there are ways to right-size your splurge. If you’re hankering for a big-name brand, search consignment stores and resale sites. There is also a vast world of influencers that can identify the best knockoffs.
Pick one thing
For most of us, splurging on all the things we wish we could have isn’t feasible. Instead, identify one passion to indulge in. If you love food, plan for a special meal. If you love sports, buy tickets to a big game.
Be careful about buy now, pay later offers
What used to be called “layaway” is now often touted as buying something now and paying the amount off later in installments. These offers often have high interest rates and interest, fees and penalties can add up quickly. Reading the fine print is crucial. While these offers can be utilized responsibly, it’s generally safer to save up on your own until you have the money.
Plan ahead
Since a splurge will take a bite out of your budget, give yourself time to accumulate the money. Some splurges may only take a few months to save up for; others may take a year, so have patience. Remember the adage, slow and steady wins the race.