The splurge question comes my way quite often. Not always about a boat of course. Sometimes it’s a luxury car, a home renovation, the vacation of a lifetime, a second property, a shopping spree, or something else entirely. When clients ask me if they can afford to splurge on something, I always give the same answer: “Well, it depends.” The reality is every person’s situation is different. It’s well worth digging deep into your finances to find out if a splurge is the right move for you.
At McKay Wealth, our overall philosophy is simple. We’re big believers in our clients living their lives to the fullest. Life is too short to pinch pennies all the time. You’ve worked hard for the money you’ve saved. And don’t forget, it’s your money! Do with it what you’d like. At the same time, you need to be responsible about taking care of what you need to. Life can get quite hairy if you’re buying big ticket items when you have other financial tasks that should be made a higher priority.
How do you know when it’s okay to splurge on that special something for yourself? To start, ask these questions:
Can I really afford it?
- Have I set aside enough money to pay for it?
- Can I pay for it without taking on debt?
- Am I willing to make sacrifices elsewhere to make the numbers work?
- If I do buy it, can I still maintain my current lifestyle?
- Can I pay for the ongoing maintenance or expenses involved in owning it?
Have I taken care of what I need to?
- Am I thinking about my financial future?
- Have I been following my financial plan?
- Have I reached the goals I’ve wanted to accomplish first?
- Can I continue to be responsible with my money after I buy it?
Why do I want to buy it?
- Have I thoughtfully considered this purchase for a long time?
- Will it bring me happiness?
- Will I be able to enjoy it for many years?
- I’m not buying it simply to impress others, am I?
- Does renting it possibly make more sense?
- Is there another alternative I haven’t thought of yet?
A lot of times, people get so accustomed to the need to save their money that it can be very difficult to let themselves splurge. If you’d like to get a second opinion about whether you’re financially ready, give us a call. We’d be happy to review your overall situation and provide any additional guidance.