We often think of splurge purchases as luxury handbags, jewelry, or exotic international travel destinations. People equate a splurge with a frivolous acquisition or one that isn’t a necessity, with the justification that we are treating ourselves.
However, savvy shoppers and fiscally responsible people know when it is worthwhile to spend extra. Sometimes, a splurge will actually save you money in the long run. While others are busy counting their pennies and buying store-brand canned goods, we will tell you when it is worth splurging to save money.
The pandemic had us all rushing out to stock up on toilet paper at Costco. Despite the memes and jokes, buying in bulk is typically worth the initial splurge. However, before you start filling up your mega-sized trolley, ask yourself these questions:
- Do I have space for this in my cupboards?
- Is the per-unit price significantly lower than buying smaller volumes?
- Will I use it all before the sell-by date?
- Is this bulk deal always available?
We know that moving is a pain and can be a massive splurge. However, it is worth thinking about more holistically with your other expenses. For example, if you lived in a different neighborhood, could you potentially save on:
- Rent or a mortgage
- Homeowners or rental insurance
- Car insurance
- Your commute to work
- Childcare options
When you tally up all of your expenses, you may find that living in a different city area is more expensive upfront but saves in other ways. You can then benefit from living in a better location with the same overall monthly outgoing costs.
Online Grocery Shopping
If grocery shopping isn’t one of the chores you enjoy, you’ll be happy to know that buying your groceries online is typically worth the splurge. You may have to pay a premium to have a personal shopper or to have your items delivered. However, the scales often tip towards savings when considering what else you could be doing with your time. You are also far less likely to make impulse purchases online with delayed gratification. You also won’t need to bring your kids to the shops, which is another bonus.
Buying new appliances when the ones you currently have are acceptable is a splurge we may initially find difficult to justify. However, newer models of large appliances are typically far more energy-efficient than their counterparts from even a few years ago.
Do the math and see how much you could save on utilities over the next few years if you bought a newer washer, dryer, fridge, or freezer. In addition, many newer appliances take less time to get the job done, so you won’t have to wait around forever for your dishwasher cycle to go through. You can then donate appliances to charity and feel even better about your decision.
We aren’t sure if we would call investing in your retirement a splurge, but to some, it might feel that way when upping your monthly premiums. Think about whether you would miss an additional $100 a month put towards your retirement. The earlier you start splurging on your retirement, the greater the long-term benefit. For example, by saving just $100 a month for 40 years, you could turn your $14,400 worth of contributions into nearly $200,000 at 6% compounded interest.
Comparing pricing and limiting your spending can undoubtedly save you money. However, sometimes being frugal means splurging to reap the rewards over the long term. You can then save money and have a better quality of life while you’re at it.