Take advantage of these splurge stretching techniques to help your fun money go a little bit farther.

Take advantage of these splurge stretching techniques to help your fun money go a little bit farther.

To treat yourself or not to treat yourself?  Or put another way, to splurge or not to splurge…..

We’ve all gotta splurge at some point though, right?

But the seemingly eternal struggle pulls at our purse strings on a daily basis. Can you actually afford to buy the new dress or will that derail your financial goals? Luckily, you can likely afford to splurge some amount of your income each month. 

Of course, you can’t overdo it. That’s where a budget comes in. Once you know what your ‘splurge zone’ is, you can more easily stay within those constraints. Plus, splurging within your budget can be more fun because you know that you aren’t hurting your bottom line too much. 

Start with a budget

Before you can decide what you can afford the splurge, you need to make a budget. 

A good rule of thumb is the 50-30-20 budgeting method

With this, you’ll spend 50% of your income on necessities like housing, insurance, and groceries. 30% can be spent on wants which includes your splurges.  Finally, the remaining 30% of your income will be stashed away in your savings for long-term financial goals.

It is important to not disregard this last portion of the budget! Saving for your future is critically important. 

Let’s see how it breaks down:

Income percentageAllocationWhat to includeWhat not to include
50%NecessitiesRent, insurance, groceries, transportation to workNetflix bill
30%SplurgesVacations, spa days, latest "must-have" dress, Netflix
Unexpected doctor bill
20%SavingsDebt repayment, retirement savingsVacation funds

Take a look at what you are already spending. Don’t just include necessities, also include recent splurges. Are your numbers adding up?

How much can you splurge?

According to the 50-30-20 rule, you can spend 30% of your income on wants. All of these wants are splurges in one way or another.

Unfortunately, the 50-30-20 framework is somewhat vague and won’t work for everyone’s situation.

Is 30% a reasonable amount of money for splurging?

Of course, if you have a high debt burden then you may need to cut into your ‘splurge spending’ to cover your debt repayment strategy. Also, if you have aggressive long term financial goals like retiring early or buying a home, then you may need to rethink 30% as the amount of money you plan to splurge.

If you have a high income, then it may feel absurd to spend 30% of your income on your particular wants. You could probably make better use of that money somewhere else.

If you have a very low income, then you might not have room in your budget to spend 30% of your income on splurges. In fact, you may have just a small amount of money available for splurging each month.

Don’t let that discourage you!

Decide what you can reasonably afford to splurge and just make sure to stay within those lines. You might enjoy the splurge more knowing that you are not ruining your month financially.

If you’re going to splurge, enjoy the splurge!

Use the 50-30-20 framework as a starting point, but make sure that the numbers make sense in your own life.

The final amount you decide to spend on splurges should be taken seriously. If you decide to move forward with the 30% of your total income for splurges, make sure to spend it where it counts. In order to do this, you’ll need to take a close look at your values.

You may highly value travel around the world to experience new cultures. Unfortunately, world travel often isn’t cheap. However, you can make a decision to focus your splurge spending on travel. Instead of blowing through your splurge money at Target, save it for something that will really make you excited.

How to stretch your splurge spending

For most of us, our splurging desires far exceed our safe splurge zone. In my case, I save most of my ‘fun money’  for travel each year. Somehow, my travel appetite dwarves my travel money limits.

Luckily, there are a few ways to stretch your splurge money.

Stretching your savings with high yield savings accounts

One of the best ways is to save your money in a high yield savings account. The returns can help you spend just a little bit more without breaking the 30% rule. A few of our favorite high yield savings accounts include:

Capital One 360 Savings Account

What Percentage Of Your Income Can You Use To Splurge? - Capital One

Capital One 360 Savings Account. You can open up to 25 Capital One 360 online-only savings accounts to easily save for a variety of goals.

At the same time, you’ll enjoy 1.90% APY without any monthly fees or account balance minimums to either open or maintain this account.

Read our full review here.

Discover Online Savings Account

What Percentage Of Your Income Can You Use To Splurge - Discover

Discover Online Savings Account. You can store your money in this competitive online-only high yield savings account paying 1.40% APY with no minimum balance required.

There is also no monthly fee with Discover’s Online Savings Account, and you get six qualified withdrawals per month.

Read our full review here.

Stretching your savings with travel reward accounts

If travel spending is your favorite form of splurging, then you need to check out travel rewards offered through credit cards.

I’ve personally used credit card travel rewards to fund a large portion of my international trips. In fact, my latest trip was our honeymoon to Scotland which was partially funded by travel rewards! It’s a fun way to stretch your splurging for spending you already do.

Here are a few of our favorite cards:

Citi Premier® Card

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With the Citi Premier® Card, you can earn 60,000 bonus points after making $4,000 in purchase with your card  within the first three months of account opening. This can be put toward travel and other rewards, and bonus – there are no foreign transaction fees whatsoever.

You’ll earn 1 point for every dollar spent on the card, as well as 3 points for every dollar you spend in certain categories. Although those categories include luxuries like restaurants and air travel, you can also earn them for everyday expenses, like at gas stations and supermarkets. Note, however, that the annual fee for the Citi Premier® Card is $95.

Chase Sapphire Preferred® Card

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Chase Sapphire Preferred® Card. Finally, the Chase Sapphire Preferred offers a generous signup bonus of 60,000 points which translates into $750 worth of travel when you redeem through Chase Ultimate Rewards®.

In order to receive the bonus, you’ll need to spend $4,000 within the first 3 months of account opening. Plus, you’ll earn 5X points on travel purchased through Chase Ultimate Rewards, 3X points on dining, 2X points on all other travel purchases. Imagine where you could go with that signup bonus.

Read our full review here.


Take advantage of these splurge stretching techniques to help your fun money go a little bit farther.

In the end, you’ll need to splurge responsibly in order to set up a bright financial future. Remember, you can splurge but don’t let it take over your finances. Instead, be aware of what you are spending and stay within a reasonable budget.

Most importantly, don’t forget to enjoy it!

About the author

Total Articles: 60
Sarah Sharkey is a personal finance writer covering retirement, investing, debt, savings, credit cards, mortgages, and student loans. Additionally, she is the founder of Adventurous Adulting, a personal finance blog dedicated to helping readers tackle their money and take control of the adventure of life. You can connect with her on LinkedIn or Twitter.