How to Splurge Right

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There’s something about the word “splurge” that just feels indulgent—it rolls slowly off your tongue in a decadent drawl, and evokes imported truffles and designer shoes. It’s a decision for immediate luxury, albeit often laced with a tinge of guilt.

There’s no room for such frivolity in the responsible world of financial planning, right?

Wrong. Most financial experts and social psychologists will tell you that splurges are not only allowed, they’re necessary and healthy to achieving financial happiness, because the pleasure they provide promotes a better relationship with our money–and, let’s face it, is one of the ways money makes our life more enjoyable, even if we do set up a budget for it.

The key is figuring out how to do them right, so that your splurges don’t detract from your goals, and your dollar goes far in returning pleasure.

Yes, we’re going to tell you how to best maximize your “Splurge ROI.”

We Get Used to What We Have

The key to mastering splurges is to first understand human nature. We are subject to a pesky psychological phenomenon called adaptation: essentially, we get used to what we have. This is commonly referred to as the hedonic treadmill: the concept that even if we acquire better circumstances—more money, a bigger house—we will quickly return to the level of happiness we had prior to these acquisitions, and will require more to get that same surge of satisfaction again. This explains why study after study shows that more money does not equate with more happiness.

RELATED: How to Budget My Money — Everything You Need to Know

Splurges Make Us Happy

It’s not worth trying to beat adaptation—we can try to stall or fight it, but in the end we always lose, according to a study by researchers Daniel Gilbert of Harvard University, Elizabeth Dunn of the University Of British Columbia, and Timothy Wilson of the University of Virginia. This is why you may try to stay excited about your new job, iPad, or vacation as long as you possibly can, but eventually the sheen will wear off. And you will need a raise, a new model, or a better trip to get you feeling excited again.

Adaptation isn’t anything to feel badly about—it’s human, and apparently unavoidable. The best bet is to, well, adapt to adaptation. We should accept it as a part of our reality, and in fact, we can capitalize on the fact that we can give our own happiness a boost with periodic indulgences.

In fact, these spurts of delight are what keep us going through life’s less stimulating plateaus (like working and, um, sticking to a budget).

Splurge Small—And Frequently

Since we “adapt” to pleasure so quickly, smaller, more frequent splurges are better investments. Temporal breaks allow us to readjust and experience a jolt of delight again.

Spreading out our joyful treats not only allows us to experience pleasure more often (who can say no to that?), it can actually save us money. This is because our pleasure doesn’t increase in exact proportion to the size of the splurge.

RELATED: How to Set Up a Budget for Commuting

For example, several studies cited by Gilbert, Dunn and Wilson show that eating a 12-ounce cookie isn’t twice as pleasurable as eating two 6-ounce cookies; it’s less. Similarly, in another study, those who received an 80-second massage, followed by a break and another 80-second massage, experienced more pleasure than a group who received a straight, uninterrupted 180-second massage (and were willing to pay twice as much for it!). Notice the happier massaged folks received less massage time (only 160 seconds) compared to the less happy group.

Instead of a major spa day every few months, try a mani-pedi every couple of weeks. Instead of treating yourself to the cute $100 top with your paycheck, see if a $30 tee one week and $50 sandals the next give you a little bump of pleasure twice that month instead. Try a few smaller vacations a year as opposed to one major dream vacation every couple of years.

Consider breaking your splurges down into smaller segments throughout the month (or year), spend less on them total, and see if your happiness–and wallet–notice a difference.

Splurge vs. Mindless Habit Spending

Is that daily latte a worthwhile splurge? There’s a difference between splurging and mindless habitual spending. The key is that your splurges should be purposeful and give you great pleasure in proportion to what the budget-friendly option would provide.

RELATED: Why You Should Set Up a Budget for a Rainy Day

For example, a daily latte might be a worthwhile splurge if you choose it mindfully, savor the nutty aroma and every creamy sip, and it really makes a big difference to starting your day compared to a free home brewed cup of coffee. It’s not a worthwhile spend, though, if it becomes a mindless habit that you’re not actively thinking about–or enjoying.

Splurge Well

In addition to splurging smaller and more frequently, here are additional tips for splurging well:

Splurge in Control: This is the most important foundation for splurging: splurging should always be done within a budget! We recommend setting aside a portion of your discretionary expenses every month for splurges. If you budget for splurges, they are less likely to get out of control.

(If you find yourself splurging too much thanks to Internet shopping, try these tools to keep yourself off that expensive boutique website.)

Splurge for Free: A recent study showed that those who master the art of savoring are happier in life. Ironically, those who are wealthier are less skilled at savoring. Savoring is the ability to enjoy and be present in the simple (often free or inexpensive) sensory experiences in life: the brilliance of a sunrise, the smell of a flower, the warmth of a furry dog. Think about indulging in free splurges as often as you can.

Splurge Towards Others: Consistently time and again, studies show that spending on others makes us happier than spending on ourselves, even though most people find this counter intuitive. The benefits of giving to others have been documented on a neural level in MRIs—even those forced to give money away showed activation in brain areas typically associated with receiving rewards. Consider using part of your splurge budget towards gifts and charity—you’ll be happier for it.

(You can even combine the above two, by helping others for free! Read our tips here.)

Now, go forth and splurge well.

Share with us: How do you splurge?

  • LizK

    This article just made me happy! I love little splurges & it is good to have some concrete evidence that they are a positive thing!

  • LizK

    This article just made me happy! I love little splurges & it is good to have some concrete evidence that they are a positive thing!

  • LizK

    This article just made me happy! I love little splurges & it is good to have some concrete evidence that they are a positive thing!

  • LizK

    This article just made me happy! I love little splurges & it is good to have some concrete evidence that they are a positive thing!

  • LizK

    This article just made me happy! I love little splurges & it is good to have some concrete evidence that they are a positive thing!

  • Akrieg15

    I would completely agree with this article, that we all need little splurges but we can learn to live without them by simply enjoying what we already have. For splurges I am loving H&M’s latest styles for budget friendly splurges. They have the burnt orange colors, bright pants, maxi dresses and feminine suiting they talked about in the article “Spring fashion trends you can wear into fall”

  • Akrieg15

    I would completely agree with this article, that we all need little splurges but we can learn to live without them by simply enjoying what we already have. For splurges I am loving H&M’s latest styles for budget friendly splurges. They have the burnt orange colors, bright pants, maxi dresses and feminine suiting they talked about in the article “Spring fashion trends you can wear into fall”

  • Akrieg15

    I would completely agree with this article, that we all need little splurges but we can learn to live without them by simply enjoying what we already have. For splurges I am loving H&M’s latest styles for budget friendly splurges. They have the burnt orange colors, bright pants, maxi dresses and feminine suiting they talked about in the article “Spring fashion trends you can wear into fall”

  • Akrieg15

    I would completely agree with this article, that we all need little splurges but we can learn to live without them by simply enjoying what we already have. For splurges I am loving H&M’s latest styles for budget friendly splurges. They have the burnt orange colors, bright pants, maxi dresses and feminine suiting they talked about in the article “Spring fashion trends you can wear into fall”

  • Akrieg15

    I would completely agree with this article, that we all need little splurges but we can learn to live without them by simply enjoying what we already have. For splurges I am loving H&M’s latest styles for budget friendly splurges. They have the burnt orange colors, bright pants, maxi dresses and feminine suiting they talked about in the article “Spring fashion trends you can wear into fall”

  • http://profiles.google.com/meghanlake Meghan L

    Great article! I love Learnvest, but this article is one of your best in recent weeks.

  • Erin

    Speaking of splurging, where on earth can I get the blue heels in the picture? I want those!

  • Kayla

    Another great article! Just like dieting…crash diets don’t work for longevity, but incorporating healthy habits into your routine is a method that will keep you slim in the long run—and it’s great to see that it works with our well-earned splurges (within budgets) as well so we don’t end up back where we started–in debt!

  • olymama

    I have always loved my latte splurges. I can savor one of those for hours even after it is cold. I switched to coffee or iced coffee to save money and calories, but I still savor it and it really makes me feel good. It’s weird, but now I know it is not a bad thing.

  • http://www.smartmouthblog.com Nicole Longstreath

    Great thoughts on splurging vs. mindless habits. Lately, I’ve learned to really appreciate quality goods since I started shopping for my clothing at thrift stores. There is no better indicator of quality than a garment which has been worn, washed and then donated.

    http://www.smartmouthblog.com

  • BellaDzaster

    My latest splurging trend is to splurge on exercise classes I’ve always wanted to take.  Two months ago I started pole fitness classes.  Now I’m hooked and 4 pounds lighter.  Today I signed up for a beginner running course.  They are both splurges but I know they will make me happy for the duration of the activity and make me look better.  :) 

  • BellaDzaster

    My latest splurging trend is to splurge on exercise classes I’ve always wanted to take.  Two months ago I started pole fitness classes.  Now I’m hooked and 4 pounds lighter.  Today I signed up for a beginner running course.  They are both splurges but I know they will make me happy for the duration of the activity and make me look better.  :) 

  • BellaDzaster

    My latest splurging trend is to splurge on exercise classes I’ve always wanted to take.  Two months ago I started pole fitness classes.  Now I’m hooked and 4 pounds lighter.  Today I signed up for a beginner running course.  They are both splurges but I know they will make me happy for the duration of the activity and make me look better.  :) 

  • BellaDzaster

    My latest splurging trend is to splurge on exercise classes I’ve always wanted to take.  Two months ago I started pole fitness classes.  Now I’m hooked and 4 pounds lighter.  Today I signed up for a beginner running course.  They are both splurges but I know they will make me happy for the duration of the activity and make me look better.  :) 

  • BellaDzaster

    My latest splurging trend is to splurge on exercise classes I’ve always wanted to take.  Two months ago I started pole fitness classes.  Now I’m hooked and 4 pounds lighter.  Today I signed up for a beginner running course.  They are both splurges but I know they will make me happy for the duration of the activity and make me look better.  :) 

  • Brandon

    Thank you for this article. I’ve recently become much more wealthy than I ever thought I would, partially through my inability to splurge. I never indulged myself because saving the money was more important to me. But now that I make enough for whatever luxury I want (within reason), I find that I don’t want it anyway. I feel like I’m wasting money if I spend $300/night on a hotel or $200 on a pair of sunglasses. So I get a $100/night hotel and $20 sunglasses. 

    But I do end up spending way too much time hunting for deals, and trying to save, like I used to, and I feel like I’m wasting time. I’m finding I don’t know how to pamper myself (I feel too guilty, I guess?) and that’s a sad realization because even though I have money, I don’t enjoy it as much as I think that I could. Interesting paradox, isn’t it? I do enjoy spending my money on others, though, especially when it’s needed, appreciated, and a surprise. I just need to learn to do the same thing for myself. Factoring splurges into a budget and taking free splurges I think will help as I practice. Thanks again!

    • MrsERP

      Wow! You have a very interesting thoughts. I wish you the best. May you soon find the courage to splurge a little bit more. ;))

  • MrsERP

    Wow! I super love this post! ;))

    I’ll share it with friends! ;))

  • frank

    I use the Oprah method – don’t buy on first temptation – come back another day and see how much you still want it – usually meh – don’t need it.

    the other day strolling the city and faced with a hungry partner and the thought of spending $25 on lunch for two, I spotted a take-away spot arranging what looked like freshly cooked pieces of fish – I knew this shop was tasty but usually didn’t buy the price – how much for 1 piece? $2 – yes please – my partner happily munched on this delicious piece of crunchy-steaming fresh-from-the-fryer fish – gave me one bite, I let her finish the rest, and no-more complaints – we got home unscathed with $23 saved thank you very much !

  • help others

    splurge towards others – it gives me great pleasure to be able to pass a quick $20 note to a poor person I see in the street – not the beggars who impose – but people I see who are making their way unassuming as best they can but obviously impoverished – it gives me a lift that lasts – helping others gives the longest lasting happiness …

  • CrankyFranky

    I like to savour small treats – like the single chocolate, the single slice of prosciutto – unfortunately my partner is likely to inhale the lot, and unless I’m quick, next time I go to the fridge it will have gone.

    chocolates OK tho’ – she doesn’t like, so that can last …

  • the_leaky_pen

    I mentioned in Day 4 of the Take Control bootcamp that my two big weaknesses are books and crowdfunding. So clearly, the ideal splurge for me would be to crowdfund a book on Kickstarter. I think I need to budget that into my spending–a splurge on some crowdfunded project once a month or something like that. This way I am both giving to someone AND getting something out of it. :)

  • Kristy

    I’m oddly immune to adaptation with spending, but I think I do it with saving (natural saver). This makes me wonder about adopting a rotating “feast & famine” methodology for budgeting. In other words, maybe a person could avoid the adaptation problem (even though the article said it’s not possible) if they alternate between two (or more) budgets that allow for either more spending & less saving or more saving & less spending. That way people always have a new bonus in one area to be excited about. Or am I the only person who gets excited about savings? :)

    • CrankyFranky

      I prefer saving to spending and many times have been caught out immobilised by not wanting to pony up for a shared social event – but now that by most measures I have enough for retirement, I’m learning from my partner how to enjoy some spending – e.g. last night I saved $2200 by blowing all my frequent flyer points on two overseas air tickets with a cash outlay of $106 …