Some things are worth spending money on, and other expenses can wait until you have more cash on hand. You should try to understand the factors for the splurge and save scenarios so you can create a budget that works for your lifestyle. If you are experiencing a financial problem, here are some ways to determine if you should spend the money or not.
Fix with an Emergency Fund
When unexpected emergencies come up sometimes you have no choice between splurging or saving—sometimes it’s just necessary. To determine if you should borrow money from loved ones or apply for online loans to get through this unexpected financial crisis, you should first assess the problem from different perspectives. Evaluate the pros and cons of your options, such as the urgency of the situation and the consequences of not addressing the crisis in the short-term. Borrowing from a friend or family member may be your best choice for resolving long-term financial strains, but if faced with an unexpected medical emergency you may not have a choice but to address the issue in the short-term with a lender. You should always try to adjust your budget and reduce your expenses in other areas to quickly pay it back.
Splurge on What’s Needed
Your choices for splurge spending should be limited to practical expenses, such as new shingles for your roof or a new car battery when it’s needed. You could have the pipes for your house inspected for water leaks, such as the water line, and then have the pipe repaired by a plumber. The splurge expenses should actually be covered by an emergency fund, which is a type of savings account for emergency money. The expense for having your air conditioning unit replaced by an HVAC technician is another emergency expense.
Save Where You Can
The save scenarios for your budget are for the excessive expenses that could be replaced with more practical expenses, such as bringing coffee in a thermos to a sports game instead of buying cups of coffee at the game. There could also be some problems from buying too many meals at restaurants. If you want to eat a snack on the way home from work, you could put some snacks in your car instead of stopping at the drive-through window at a restaurant.
Make Easy Swaps
You can use a list to begin to recognize each opportunity for you to replace an item with a low-priced item, such as making a chef salad at home for your work lunch instead of buying a chef salad from the office bistro With some simple efforts for controlling your expenses, you can enjoy the same kind of salad with a lower price for your budget.
Save for Emergencies
The money for emergency situations could cause problems if you do not have a good savings fund, which should be separate from a regular savings account. Sometimes people experience many financial emergencies in a month that all stack up at the same time. This is where your plans for emergency money prepare you to protect your home, job, and livelihood during tough times.
Splurge to Prevent Further Issues
Your splurge spending habits should be designed for controlling problems, such as for inspections for your roof or car. The inspections could be used to identify problems. The expense for fixing a roof leak would be less than the expense for replacing a wall in your bedroom. You could pay for diagnostic tests for your car to detect hidden problems and could decide to have some auto parts replaced every five years before the parts fail, such as the starter.
Cost Compare to Save Even More
The process for reducing your expenses can be easy if you recognize each opportunity for using a homemade item or for cooking a meal instead of buying the item or the meal. The initial phase for developing your budget should be centered on finding the lowest price for a product, such as shampoo or soap. If you cannot find a low price for a product that will accommodate your budget, then you could replace the product with a low-priced product, such as store brand paper towels.
Balance Splurges and Saves with a Good Budget
If you have a list of your expenses, you can quickly identify the excessive expenses. With a budget, you control your expenses and could also protect the quality of your life by experiencing fewer problems while you are traveling or relaxing at home.