With harsh economic times as they are, it can be hard to justify spending money on luxuries. Generally speaking, this is a wise anxiety to have – but when it impacts every decision from where you holiday to whether you buy an additional packet of biscuits this week, it can become a problematic one.
Life is for living, and you deserve to live it. Our lives are made up of special moments and events, from the conventional (weddings, birthdays and anniversaries) to the unconventional (housewarmings, I-got-fired parties, and so on). For me it’s got to be days out. The expense ms all add up but I’m determined to enjoy making memories with Arlo. Sometimes we deserve to be able to splurge on them – but what can we do to make such splurging possible?
Save and Invest
You are likely already saving money for the long term, whether your next home or for retirement. But here, we are talking about saving money with the express intention of spending it. As such, you might consider browsing for a different account in which to place a tranche of your income; this could be another savings account, or an ISA for the tax exemption benefits (if you have already exceeded your Personal Savings Allowance, that is).
I have lots of little pockets, one account is easily accessible and I can use online transfers to quickly make my savings available however one of my accounts requires a three day notice period so if I do need to spend a large amount I have time to think and also do some research. I can often find discount codes and offers for big ticket items if I give myself that time to do some research. It can be frustrating when it’s something like a washing machine which needs replacing and having to wait. I had one ready to check out in a basket online but then happens to find a decent one on Facebook market place whilst browsing in that time.
For slightly more engaging attempts to increase your returns, you might even consider using a Stocks and Shares ISA to invest in a tracker fund. This way, you can enjoy relatively stable capital gains at a rate defined by the movements of entire markets. There’s always risk involved here so take financial advice.
Being able to save for that special moment is contingent on some other aspects of your life, particularly your readiness for emergency costs. If your boiler were to break tomorrow, would you be able to fix it without spending either some retirement money or your special moment cash?
This illustrates the vital importance of having an emergency fund in place. The fund should be a few months’ worth of your household’s income, in order to brace against the biggest possible costs. Having this in place can protect future events financially, ensuring you get to enjoy your life without caveat.
Whenever I have to dip in to my fund I always make an effort to top it back up and spend wisely for the following few months with careful budgeting and cut backs on luxuries.
For older homeowners, there is another option that makes enjoying life greatly more possible: equity release. This is a form of loan that you take out against your own property, affording you a portion of its value in advance. This is recouped once you sell your home, but in the meantime, you would only be liable for the interest (depending on the agreement). With this, you could receive a lump sum out of your home and put it straight towards the things that matter – your family, your friends, and your enjoyment of life.