How To Create a ‘Splurge’ Fund To Avoid Debt and Regret

Brooke Barley   Thu, November 28, 2024  GOBankingRates

Many people think a budget means there is no room for fun purchases, but that’s not the case. There are ways to spend money on enjoyable experiences without going overboard.

Here’s how to budget the smart way while still making sure to leave room for splurges, according to financial experts.

Track Spending

The first step to creating a “splurge” fund is to know exactly where your money is going.

Julie Guntrip, the head of financial wellness at Jenius Bank, suggested setting up a budget with three different priorities: needs, wants — aka the splurge fund — and savings. Once these are tracked for a month, Guntrip explained, patterns will emerge and will help dictate how much there is to spend on wants.

“This practice could provide an opportunity to spot patterns in discretionary spending and rethink them. This information could motivate you to adjust your behavior and be more intentional in your discretionary purchases so that you skip the meaningless extras and focus your resources on the things that bring you the most joy,” she said. Financial wellness is about balance — being able to indulge in the moment and still work toward growing your wealth and securing your future.”

Define Needs and Wants

In order to track what’s absolutely necessary and what’s discretionary, Guntrip suggested labeling each expenditure.

TO READ MORE:  https://www.yahoo.com/finance/news/create-splurge-fund-avoid-debt-220009697.html