How to Budget for a Splurge in an Uncertain Economy

Anela Malik can’t name a single dish that stood out from her five-hour lunch in the summer of 2024 in Lima, Peru, at Central, which topped the World’s 50 Best Restaurants list in 2023. Even so, the $500-per-person dining experience was worth every penny, she said.
While it wasn’t the best meal she has ever had, for Ms. Malik, a 34-year-old influencer and the author of “American Soul: The Black History of Food in the United States,” the meal’s theatrical elements were “almost like going to a show.” Servers told her about how ingredients were sourced and how each dish “has historically been eaten,” she said.
With signs of a weakening economy, splurging may seem counterintuitive if you’re uncertain that your bank account can sustain the expenditure. But when done responsibly, thoughtful splurges for occasional indulgences can bring people joy even in turbulent financial times.
Ms. Malik said she saved for splurges by living frugally in her studio apartment in Washington, D.C., and using public transportation when traveling.
She favors spending on experiences over things. In 2023, she stayed at the Cayo Levantado Resort in the Dominican Republic, which cost $2,000, including transportation, for three days and two nights. She was already on the island visiting a friend, and it was her first birthday since her divorce. The only item on her agenda was to relax.
“I’m not the type of person who takes a lot of time off,” Ms. Malik said. She described the service at the resort as the “the essence of hospitality,” from an assigned person she could message on WhatsApp with requests to offers of a ride as she walked to the gym. She sees herself saving up for a similar vacation every few years.
When Are Splurges Worth It?
According to Jill Sirianni, who hosts the “Frugal Friends” podcast with Jen Smith, splurges differ from impulse spending because “you can plan for a splurge and feel really good.”
“There doesn’t have to be shame attached,” provided you aren’t going into debt for it, she added.
While Ms. Smith and Ms. Sirianni do not have universal rules about what to buy, they advise aligning splurges with one’s personal values, especially in the realms of family, friends, faith and fulfilling work. What’s dangerous is when splurges are “guided by other people, by marketing, by influencers,” Ms. Smith said.
The Eras Tour: Thousands of Dollars
Elizabeth Husserl, co-founder of Peak360, a financial management firm, recommended that splurges be part of an annual or monthly budget. The expense should be for something that ideally “creates long-term joy and meaningful life connections and memories,” she said.
In Ms. Husserl’s case, splurging meant taking her teenage daughter to see Taylor Swift perform in New Orleans. The total cost for two tickets: $4,000. The gift became a combination Christmas, graduation and birthday present. Her daughter wanted to hang out with her and was “beyond ecstatic.”
“ It’s forever etched in my body and in my bones that I got to see her so happy and so alive,” Ms. Husserl said.
A Custom Ring: $1,000-Plus
A splurge may make sense when a financial surplus hits just as an enticing item catches your eye, as was the case for Enid Beall, a tech support manager in Boise, Idaho. After scrimping to pay off six figures’ worth of student and car loans, credit cards and a second mortgage, Ms. Beall, 52, found she had an extra thousand dollars a month at her disposal last year.
An avid “Bridgerton” fan, Ms. Beall closely follows Nicola Coughlan, a star of the show, and was impressed with her custom Claddagh ring. The ring’s $10,000 cost was out of her range, but an opal ring just over a thousand dollars “was an easy choice to make” as jewelry to show off when she goes out with friends.
Even though Ms. Beall typically questions spending over a hundred dollars, she felt she deserved the reward. “ It’s nice to reach a point in my life where I have a little bit more leeway financially,” she said.
Smaller Splurges
Erewhon Smoothies: $11 to $22
While we tend to think of splurging as requiring an extravagant sum, smaller items above typical spending can also count. Erewhon, a popular upscale grocery store in Los Angeles, traffics in limited-edition, celebrity-endorsed smoothies that can cost more than $20.
Naomi Darling, a book influencer in San Francisco, spent $20 on “Hailey Bieber’s Strawberry Glaze Skin Smoothie” from Erewhon during a trip to Los Angeles in March. After seeing TikTok videos of the concoction, her intention was to make fun of the expense.
“Unfortunately, I must confess, it was one hundred percent worth it,” Ms. Darling, 46, said. “I was expecting just an average smoothie, like the ones I make at home.” However, it “tasted like a little bit of heaven.”
Toys and Collectibles: Hundreds of Dollars
“It’s all about the thrill of the hunt,” said Mr. Alvarez, 39, a production supervisor at Garmin. He added that he appreciated being able to “ buy the toys my family couldn’t afford to buy me as a child.”
Ms. Alvarez, 32, enjoys bidding on Facebook Live auctions from a local toy store, such as a lot from the movie “Van Helsing.” It included a sideshow figure that retails for $150; she won the auction for half that. While she’s a passionate collector, she hadn’t known these items existed, making the purchase extra meaningful.
The pair regularly attend Planet Comicon Kansas City, an annual comic book convention, with a $300 budget but will spend more for special purchases from trusted artists and sellers. Ms. Alvarez said they often predicated their spending on “how much we care for and support that person or shop because of how kind and wonderful they’ve always been to us.”
A Buy-It-for-Life Pillow: $100-Plus
While “practical splurge” may seem like an oxymoron, the buy-it-for-life retail category has devotees willing to pay much more than they normally would for an item, hoping it will last long enough to justify its cost. Brooks Rocco, a content marketer and online creator in New York, didn’t set out to buy a $159 pillow, but when his $60 memory foam pillow wasn’t working for him, he came across an ad for the Harmony pillow from Purple.
He and his wife had tested a Purple mattress several years before, which he had loved but she hadn’t. With that in mind, Mr. Rocco, 42, took a chance on the pillow, which he says “feels like home” and has helped him find his “perfect” sleeping position that “knocks me out in 45 seconds.” He now looks forward to sleeping in a way he didn’t before.
Making the Most of a Splurge
Ms. Husserl, who took her daughter to see Ms. Swift, stressed that part of getting the best return on an investment was “making sure we take the time to savor what that splurge was,” rather than immediately moving on to the next item on the wish list. For her, that means wearing matching Swiftie sweatshirts with her daughter on Sunday mornings and looking through photo albums of their trip rather than scrolling Instagram.
Ms. Malik, the influencer, feels the same. A shared meal “is something me and that person will circle back to again and again,” she said. “It helps cement relationships and builds shared memories together.” Even a solo experience can help connect her to others who have traveled to the same city or venue.
If she buys a beautiful purse, “it’s going to be functional, but the joy I’m going to get from that is much less than splurging to go to a nice dinner, especially sharing that with a close friend.” That type of bonding is far more meaningful to her than a compliment on a purse.
“You’re like, ‘Oh, thanks,’” Ms. Malik said. “And that’s kind of where it ends.”