For most people, splurging every once in a while is perfectly acceptable. It’s okay to treat yourself! Sometimes a little extra spending won’t hurt – but if your habit gets out of control, it can lead to major financial problems, such as credit card debt. Is your budget able to handle a splurge, or are you better off keeping your belt tight at all times?
If you’re trying to pay off debt, splurging can derail your progress.
When Splurging Becomes a Problem
Any spending outside of your budget for an item or service you don’t need is considered a splurge. If this happens once, you probably won’t end up in bankruptcy counseling. However, if it happens with any regularity, you need to take control to avoid lasting financial issues.
Depending on the severity of a splurge and current financial situation, recovering can be difficult. If you’re in the process of getting rid of credit card debt, then any unnecessary spending is going to hurt. Even if you’re not repaying high-interest debt, any financial goal you are pursuing will be set back by splurges that get the better of you.
Strategies to Minimize or Eliminate Splurging
- Careful Budgeting – The best defense to any bad spending habit is a solid budget. With every dollar accounted for, you’ll feel an increase in financial awareness.
- Leaving Cards at Home – Credit cards make spending easier and splurging more likely. Relying on cash for all purchases places a barrier on impulsive spending.
- Avoid Splurging Situations – Black Friday sales, online shopping events, and daily deal websites are common consumer debt traps. Just because a price is discounted doesn’t mean you can afford to buy.
- Know the Difference Between “Needs” and “Wants”.– It’s hard to separate required spending from desired spending sometimes. Keep in mind that all entertainment expenses are unnecessary and that a night out on the town is just as much a splurge as a new TV.
Whether you can afford a splurge or not, every purchase you make should be carefully considered. Being mindful of your spending requirements as well as your spending habits will go a long way to keeping you in good financial standing.
If you’re struggling to pay off debt, ACCC can help. Schedule a free credit counseling session with us today.
