Can a Spending Splurge Help You Reach Savings Success?

Jean Chatzky
Updated
Splurging and saving
Splurging and saving

If you've ever been on a diet -- whether to lose five pounds or 50 -- you know that sometimes, you have to give in to that craving for one slice of molten chocolate fudge cake in order to avoid eating the whole cake.

At least, that's the case for me. I always just assumed it worked the same way for other people -- and a study out recently in the March issue of the journal Steroids, proved me right. Researchers put 144 obese people on one of two diets. Total calorie counts were identical, but one group received dessert -- their choice of chocolate, cookies, cake or ice cream. Though an initial 16-week testing period showed little difference, in a subsequent 16 weeks those in the dessert group lost an additional 13 pounds on average. The other group gained back nearly all they had lost.

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The results made me wonder: Is the same true for spending money? Can a well-timed splurge help you reach your savings goals? The answer turns out to be complicated, says Dr. Jim Prochaska, the founder of Pro-Change Behavior Systems (and, full disclosure here -- my partner in my online program The Debt Diet).

"You can say, 'I'm going to get it out of my system, and get some pleasure and relief,' but you have to also say you won't go back and do it again tomorrow," says Prochaska. "You want it to be a lapse instead of a relapse."

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With that caveat, he says giving in to a spending craving every once in a while can help you stay on the straight and narrow. Here's how to do it, guilt-free:

  • Set boundaries. The idea is to set yourself up for success. Just like you might not go to a buffet when you're dieting, don't head to your favorite mall with a wallet full of credit cards when you're trying to save money. Instead, give yourself the enjoyment without the risk, says Prochaska. "Take [a finite amount of money] with you, and no credit cards, so you have control in terms of how much you can spend." Once that cash is gone, your splurge is over. How much does it take to make a splurge? Not as much as you might think. A bright new lipstick for spring can bring you as much enjoyment as a new outfit. And no one's going to think it's odd if you wear it every day.

  • Time it right. The sad fact about spending money is that if you do it too often, the things you buy start to lose their appeal (I happen to think the same can be said for eating too much chocolate cake). "Splurging on something every once in a while helps us think that we're splurging and gets us to enjoy what we're spending on, but we don't get used to it," says Dan Ariely, professor of psychology and behavioral economics at Duke University and the author of The Upside of Irrationality. "In our quest to get maximum enjoyment out of life while also saving money for retirement, a rounded, useful approach is to splurge on something from time to time." Allowing yourself only the occasional indulgence may actually make you feel better.

  • Minimize the guilt. Guilt is a tricky thing. If you spend, and you feel guilty about it, you're likely to spend again to try to make yourself feel better. So you have to give yourself a pass, and to do that, you need to frame the splurge the right way, says Prochaska. "If you do this on the basis of urge, with no planning and no boundaries, you're more likely to feel like you broke your rule, that you can't maintain your plan and start a waterfall effect." For a splurge to make you feel better -- not worse -- you have to keep limits on it and then move on.


-- With Arielle O'Shea

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