If you have a sticky relationship with money, you’ve likely heard all about separating your “wants” from your “needs”. When money is tight and you don’t have enough to go around, the idea of eliminating your “wants” and focusing all of your attention on your “needs” makes total sense. But once you’ve gotten a better handle on your finances, it’s perfectly fine to bring some of those “wants” back into your life in a safe and measured way. So to help you make this transition and relearn how to spend money in all areas of your life, here are three tips to help you learn how to wisely spend some of your money on your “wants”.
Work On Prioritization
One thing you might be afraid of when loosening up the reins on your spending is that you won’t be able to control yourself when you see something you want. To help you overcome this mental block, Courtney Jespersen, a contributor to NerdWallet.com, recommends that you learn how to prioritize both your “wants” and your “needs” now that you’re allowing yourself to spend money in both areas. As part of this, write down the things you’re wanting and how much it will cost for you to have those things. A “want” like going to the movies likely won’t require you to budget too much or save your money, but something like getting plastic surgery will mean having to create a savings plan and prioritize this larger “want” over some of the smaller “wants” you might have been able to afford along the way.
Be Willing To Sacrifice In Other Areas
As was mentioned in the example mentioned above, affording some of your “wants” will likely still require you to make some financial sacrifices in other areas. According to Holly Johnson, a contributor to The Simple Dollar, not only is it possible that you’ll have to sacrifice some of your current “wants” for other “wants”, but you might also want to take another look at your current expenses to see where you can cut back even further to make some of your “wants” a reality. You likely won’t be able to do everything all at once, so make sure you’re still tracking your spending and being careful about where your money’s going, even with your “wants”.
Find A Reasonable Way To Budget For “Wants”
Once you’ve decided on something that you want, the best thing you can do is to create a budget that will allow you to save the money in order to afford this thing. One great principle you might want to try when doing this, according to Paula Pant, a contributor to The Balance, is the 50/30/20 Rule. With this financial principle, you spend 50 percent of your monthly income on your “needs”, 30 percent on your “wants”, and 20 percent should go toward savings or paying down debt.
If you’re ready to take the next step with your budgeting and begin including some of your “wants” back into your life, consider using the tips mentioned above to help you do so wisely.