November 04, 2014

We often splurge on items and then feel guilty about it and don’t tell anyone. That is not the way it should be, and you need to find a way to enjoy your splurges – guilt free.

If you have a solid plan for saving and investing, and know what your goals are, then you know what you have left over for what we call discretionary spending. This is spending money for items or services that are not necessities but purchases in your life that you enjoy. You have worked hard for your income, invested wisely, and you deserve your splurges free of guilt.

In the financial planning business, we call this the ‘utility’ of money, which means the personal reward of each dollar that you spend on something. Depending on how much extra discretionary money you have, it is important to maximize its utility on things that are truly special. Depending on our stages in life and how well we have saved, we all have different levels of funds available for this kind of spending.

I have clients who get the most utility from spending their money on travel, while others spend on cars. It can be even as simple as a daily double latte from Starbucks. Mine? It’s anything that will get my teenage daughters to spend time with me, so it includes dinners out, manicures and travel.

So now is the time to become guilt free and enjoy what you have worked hard for. What are your splurges?

Disclaimer: The views expressed in this article are the opinions of the author and should not be interpreted as individualized investment advice. Investment objectives, risk tolerances and the financial situation of individual investors may vary. Please consult your financial and tax advisers before investing.

Susan Templeton

November 2014