When Does It Make Financial Sense to Splurge?

Alissa Krasner Maizes wanted a boat, so she splurged and bought one, spending $22,000.

“Yes, I am that financial advisor who is unapologetic about buying a boat that my family only uses a few days a year,” said Maizes, founder of Amplify My Wealth. “Although maintaining its value is a bonus, it is certainly not why I made this purchase. Rather, it is because I can afford it, and it brings joy to me and my family.”

She saved on the cost of the boat by not buying a new one. “I was lucky enough to buy a boat fitted for watersports and previously loved by another family, which has brought my family and me lots of joy, laughter, and memories into our lives, something I would never trade for more money,” Maizes said.

Should you follow Maizes’ lead and make your next purchase a splurge? These are four tips to keep in mind before shelling out.

Be Prepared

Kelly Reddy-Heffner, a certified financial therapist at Steel City Wealth Collaborative, urges people to do plenty of prep work before moving forward with a splurge.

“Being prepared for an expense can help increase the excitement and enjoyment of a splurge item exponentially,” she said.

Reddy-Heffner encourages her clients to consider the quality of a product or experience, how often they will use it, and the affordability of it before shelling out money.

Get Aligned with Your Values

Make sure a splurge fits in with your values. If it doesn’t, it may not be a good fit for your life.

“As both a financial psychologist and financial planner, I believe that intentional splurging can be just as important to financial well-being as disciplined saving, as long as it’s aligned with your values and long-term goals,” said Josh Harris at JW Financial Guidance.

A splurge aligned with your values may be well worth the cost. “One client—an educator—saved for a year to buy a grand piano. It wasn’t cheap, but it connected her to her childhood love of music and became a central part of her home and identity. Years later, she says it’s the best money she’s ever spent,” Harris said.

Save in Advance

A splurge doesn’t have to be a spur-of-the-moment decision. You can prepare for it ahead of time.

“Think about the cost and see what you can save per week, per pay, per month to make it a reality without compromising on other financial priorities,” Reddy-Heffner said. “Sometimes extending the timeline can help open up the possibilities. If you save for an extra month, can you get what you really want?”

Start putting aside money in an account or fund that generates interest, like a money market fund or high-yield savings account, so it will be there the next time you want to make a splurge.

“I recommend creating a ‘joy fund’ or ‘freedom fund’—a savings account specifically for nonessential, feel-good purchases,” Harris said. “Planning for splurges makes them more satisfying and removes the guilt.”

Don’t Rush a Splurge

Don’t let the excitement of the moment cause you to hurry a big financial decision. If you do, you may hamper your other financial goals. “Urgency is often a factor in derailing goals,” Reddy-Heffner said.

Reddy-Heffner followed her own advice when buying a home coffee machine. She splurged and bought a higher-quality one with a bigger price tag.

“We chose one in the $750 range. At a lower price point, there were options from $250, but the reviews were not as good; it did not have all of the features that we wanted in an upgraded model,” Reddy-Heffner said.

She saved for the home coffee machine a little at a time. “We made a plan with a timeline and set specific goal increments towards the purchase to make it affordable,” Reddy-Heffner said.

And keep an eye out for emotional triggers, as splurging may not be the best way to cope with these feelings. Instead, consider implementing a waiting period of a few days for big purchases.

“Are you buying to soothe stress, keep up with others, or escape discomfort?” Harris said. “Would waiting 24 to 48 hours change your mind?”

The Bottom Line

Making a splurge that you really want might make you feel better, but make sure it doesn’t upend your finances or interfere with your financial goals. Rather than spending money on the spot, take your time and consider how it could affect the rest of your finances. Instead, consider opening a designated savings account, adding money to this account periodically.