I’ve got a reputation for being overly frugal, and it’s well deserved. I’ve earned it. Yet, there are also decreasingly rare times when we splurge a little.
Yes, I’ve admitted to cutting my own hair and even my wife’s hair at her insistence. Saving money feels good and it feels right. Wasting money is painful; I was raised to be a good steward of the money I’ve made and frivolous purchases simply do not sit well with me.
However, at times, we choose to be less thrifty. I dare say there are times that we are anything but frugal.
To be honest, learning to spend money and be OK with it is something I’m working on. Frugality can be a beneficial quality — it helped us reach early financial independence — but an associated scarcity mindset can also be something of a hindrance to living a joyful life with a sense of abundance.
Spending With Intention to Overcome Excessive Frugality
Overspending is a more common and more damaging problem as compared to “underspending,” but when someone has pinched pennies for decades, it can be difficult to break thrifty habits that have become ingrained.
Reframing a purchase as having an investment component is one way to ease the sting of spending serious money. I can’t imagine spending $10,000 or more on a wristwatch or handbag, but when shown how certain makes have actually appreciated in value, you can see how it’s not necessarily money down the drain.
A major kitchen makeover, new composite decking, patio, pergola, or bathroom upgrade? You’ll spend tens of thousands of dollars on these things, but you will likely recoup at least some of the cost when the time comes to sell your home.
Splurging for the sole sake of spending more money isn’t going to bring joy to a lifelong saver. Immersion therapy might be an effective approach with certain phobias but I can’t see it working for those with an aversion to extravagance.
One ought to spend, or slurge, with specific goals in mind. Goals like happiness, memories, safety, convenience, and peace of mind. I keep goals like these in mind when choosing where and when to upgrade from the budget option I may have chosen a decade ago.
These are some of the ways we spend when we splurge.
When I say we splurge on travel, it’s more about quantity than it is 4-star or 5-star experiences. Pre-pandemic, we had plans to spend most of the year traveling. With a family that will be fully vaccinated by the end of November, we have plans to be away from home for all but about 5 weeks over the next 5+ months.
It would be much cheaper to stay home, but there’s a great big world out there, and we’d like for our children to see as much of it as they can before we settle down for their high school years.
The term “well-rounded” is rather nebulous, but I do feel that spending time in dozens of different nations will give our kids (and us) a global perspective that can’t be gleaned from history books or documentaries, as much as we like those resources, too.
Travel is often exciting, fun, and it can also be terribly inconvenient and challenging. Jet lag, language barriers, lost and forgotten items, last-minute cancellations and delays… you learn to expect the unexpected. As you work through difficulties, you learn to be resourceful, resilient, and develop life skills that can help you navigate future crises.
Back to the splurging part. While we’re pretty adept at budget travel, I have been selecting modest upgrades for recent bookings.
For example, we’re currently wrapping up a cruise to Cozumel and a private island in the Bahamas. The four of us could have shared an interior stateroom for about $1,200 plus gratuities. For about an extra $140 a day, there was a room more than twice the size, situated directly at the front of the 9th deck with two huge windows facing forward over the ship’s bow. I booked it.
As we return to Orlando, our hotel room is a suite twice the size of the standard rooms offered. For an extra $15, it was a no-brainer, but like the cruise line upgrade, it’s one I probably wouldn’t have made a decade ago.
Financial independence has helped me realize that we can afford to have nice things.
While we do love to spread our wings more often than most, it’s also nice to put down roots in a comfortable place, too.
Coming from a guy who bought a $90,000 house a couple of years ago, you might have a hard time taking me seriously, but hey, that was temporary.
This fall, we’ve spent time and money to improve the lakefront lot on which we plan to build Dreamhome #2. Dreamhome #1 was built in 2007 and 2008. I looked at what we spent back then, and adjusted for inflation the $650,000 or so we spent would be like spending closer to $850,000 today, and this was in a place where many homes could be had for under $65,000, and a $165,000 would get you a respectable home in a better part of town.
By the time we’ve built Dreamhome #2, we’ll have spent well over a million dollars. If we choose to sell the house across the street, where we’re living now, I think we’ll still have over a net 7 figures into the new home, but we might just keep our current house as a guest house and short-term rental.
We’ll have more house than we need, especially once the kids fly the coop, but that’s alright. This is one of those areas in which we’re okay splurging.
While I do believe that public education can be excellent in many locales, and it’s essentially all my wife and I have personally known, education is an area in which I have been willing to spend.
To date, it’s been mostly in the form of a musical education. We own three digital pianos, two ukeleles, a guitar, a banjo, and countless books full of sheet music for all of these instruments. Private lessons generally don’t come cheap, either, although we’re currently able to get those via the public school system when we’re in town.
While I not-so-secretly hope our kids choose an in-state public school for their college educations, we’ve been saving in 529 Plans since birth and will be able to afford private or out-of-state public school tuition if that seems to be the best option for either or both of our sons.
My undergraduate and medical school education led me to a rewarding and lucrative career as an anesthesiologist; I want my kids to be able to take full advantage of whatever educational opportunities arise for them. It’s also reasonable to think of that money spent as an investment, as well, as there is a definite return on money spent towards education.
If you read much about wise ways to spend your money, you’re probably bored with the “spend on experiences, not things” trope, so I won’t belabor the point. Yes, you’ll probably get more joy from experiences and the anticipation of them than you will from most things, but things can also lead to experiences, memories, and fun.
On this cruise, we kinda, sorta splurged on a stingray and shark experience, but that’s mainly because purchaing an offical cruise line sanctioned shore excursion was the only way to get our partially-vaccinated 11-year old off the boat in Mexico.
I can tell you that I’ve skimped on experiences in the past, and I’ve probably regretted doing that more often than I’ve felt upset for having wasted money on an experience that wasn’t worth it.
I now pay nearly $100 a seat for a pair of tickets to Golden Gophers football, despite the fact that I live over 600 miles away and the team just isn’t that good most of the time. It’s worth it to me for the experience of keeping in better touch with family and friends back in Minnesota, and the tailgating, at which I drink…
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The Good Beer
Life’s too short to drink cheap beer. Insert wine, rum, whiskey, coffee, bud, etc… or whatever your vice of choice may be. You can also splurge on healthy food and drink, as well.
Jimmy Fallon is credited as having thanked craft breweries for making his drinking problem seem like a really neat hobby. I resemble that mark, and I’ve also splurged a bit on brewing and serving equipment for my homebrewing hobby.
That’s another activity that has helped me make quick friends when new in town, as has the curling hobby I developed in Minnesota and hope to resume when we start spending winters in northern Michigan.
Last year, I introduced my boys and reintroduced myself to the non-frugal hobby of downhill skiing. That was something we could do together as a family, making it money well spent.
My most expensive hobby might be digital photography. I learned the hard way that it becomes even more expensive when you leave all of your gear on an airplane under the seat in front of you. These things happen.
Splurging on hobbies often leads to new connections and friendships, and having hobbies you enjoy can make the transition to retirement life much easier.
The first few times I read Shel Silverstein’s The Giving Tree to my kids, I had to pause to gather myself and keep the tears welling up from spilling over. That darned tree is just so selfless, giving everything it has to make that boy happy ’til the “boy” is old and frail and needs nothing more than a place to sit, which is precisely what all that remains of the giving tree can provide.
Behavioral science has found that we are happier when we spend money on others than when we spend on ourselves. Our tax code also incentivizes certain types of giving, and paying lower taxes makes me happy, even if it means I give a dollar to save thirty to forty cents.
Aside from the home we’re about to build, charitable giving has been our biggest splurge in recent years. Since starting a donor advised fund in 2013, we’ve given a mid-six-figure sum to our DAFs and have made a low six-figure sum in grants from them to various charities.
It feels wonderful to be in a position to make these gifts without impacting our own financial future. My hope is that we can continue to grow this charitable endowment while continuing to give more from it in the coming years. There are only so many ways I am comfortable splurging on myself and my family.
As we’ve done for several years now, we’ll be making 100+ grants to charitable organizations based on reader requests on Giving Tuesday at the end of this month.
If you’ve got a DAF, I invite you to join me in making a minimum of 10 grants of $100 each to select charities. If that’s something you’re willing and able to do, please contact me. We’ve already had several volunteers but would love more!
What do you splurge on? How do you differentiate between frivolous spending and a justifiable splurge?