Suze Orman’s Best Advice on Smarter Splurging
Written by
Jordan Rosenfeld
Edited by
Amber Barkley
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Financial expert Suze Orman is not known for telling people to splurge and spend their money, but even she is not always so stringent; she understands that everybody needs to be able to splurge once in a while, as long as you do it carefully and thoughtfully. Orman explains how you can splurge in a “smart” way.
Treat It Like a Diet Cheat Day
One way to approach it is to treat it like a diet “cheat” day where, by allowing yourself a little bit of something that isn’t in your plan, you’re more likely to stick to the plan that keeps you on track, Orman said. Additionally, Orman pointed out that you are likely to get more pleasure out of an infrequent splurge over something you do regularly, so pick something that you haven’t been able to do or buy in some time.
Be Intentional in Your Splurge
If you’re familiar with the term “retail therapy” and have indulged in said activity yourself, you probably know that sometimes these purchases end up being impulse buys that you don’t even need or use more than once or twice. Orman joked that most of these purchases fall into two categories: “‘God, I was having a bad day’ or ‘Hey, I was on vacation!'”
The reason matters less than what you actually do, and you don’t need to feel too bad — research shows that shopping is just one of many activities that give our brains a dopamine high, an instant “feel good” burst. Instead, Orman said, splurge on something you really want or need, something you know you’ll use/wear/keep for a long time, because the alternative is wasted money and a shame hangover when it’s time to get rid of the items.
She recommended you do a quick purge of yours and your kids’ closets to prove just how many unneeded items you may have purchased of this kind.
Splurge on Experiences
If the retail therapy urge persists, Orman recommended that you splurge on experiences, not things. Research has shown that if you want that endorphin rush that comes with shopping to persist, an experience lingers, not least because experiences tend to connect us to other people, fulfilling our biological need for social contact.
Experiences have also been shown to improve our sense of self — maybe that diving trip showed you how brave you are, that night out with friends reminded you how many good people you have in your life, and so on. Experiences build memories you can pass on and recall warmly.
Be Honest With Yourself
Orman really urged people to check in with themselves before they splurge and predict how it’s going to make you feel emotionally. If you’re going to forget about it tomorrow, or not care much, it’s probably not the right splurge. If it continues to make you happy or offers you some other aspect of well-being — maybe a dinner out with your significant other allows you to some time to unwind and not have to cook, or a new piece of tech improves your health, organization or work habits — then it’s a better bet.
Splurge To Free Up Time
The very idea of “splurging” is often associated with leisure activities and goods — something “new” you can bring into your home or an activity you can go and do. But what if a splurge is to free up some valuable time so you can better enjoy the things/people/experiences you already have?
Orman called these splurges “time creators.” That could be paying a local teen to rake your leaves, a pet-sitter so you can go on an overnight with your honey, or a house painter to get that old bathroom repainted so you can focus on other things.
Make a Splurge Budget
The trick in all this splurging is that Orman still wants you to factor it into your budget. That might seem like it takes the spontaneity out of splurging, but she suggested that it gives you guidelines so your splurge doesn’t set back your financial goals. She insisted that you do not put your splurge on a credit card — only cash. And it must not interfere with paying your bills, putting away money toward retirement or building an emergency fund. Her formula for your splurge budget is:
Money left over each month x 0.2 = Your Splurge Budget
So, if you have $500 left over, you get up to $100 per month in splurge funds. If you have $50, you get $10. If that’s not enough money for you to afford your splurge goal, you save up until you can.
So, splurge away!
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