Saving Aggressively? These 5 Spending Categories Are Still Worth It
When you’re saving aggressively, it can feel like you have to say “no” to every nonessential purchase. Nearly 60% of millennials say social spending gets in the way of their financial goals, according to Ally Bank, which makes it tempting to slash everything fun from the budget. But that's not always the smartest move.
The key is knowing which expenses are worth keeping. From protecting your health to investing in your earning potential, some purchases pull their weight even when you're watching every dollar. Here are five things that are genuinely worth spending money on even when you're focused on saving.
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1. Things That Protect Your Health
Protecting your health is a worthy investment, even during times of ambitious saving. And skimping on your health to save a few dollars can end up costing significantly more in the long run.
Eric Demper, founder of CuraDebt, said that anything related to preserving your physical well-being is important. If a purchase supports your health, "chances are that you're better off keeping it," he added.
That applies to mental health, too. When it comes to your well-being, mindful spending isn't a setback to your savings goals; it's a protection of them.
2. Activities That Help You Increase Earnings
Spending money to grow your skillset can be a wise move, even when saving money. More Americans are spending on upskilling, with a recent edX survey revealing that 56% of polled respondents saying they plan to spend over $1,000 on career training and education. Whether it's an online course, a certification or a tool that makes you more productive, spending on your career can have a real return.
"Spending related to … career advancement often has real value long-term," said Ashley F. Morgan, a debt and bankruptcy lawyer at Ashley F. Morgan Law, PC.
Even if you don’t see an immediate return on the spending, if it promotes career growth and increased earnings, it’s a justifiable expense.
3. Something Social
A budget with zero room for fun is a budget that's hard to stick to. Social spending — dinners out, weekend plans, celebrating a friend's birthday — isn't frivolous. It's what makes the rest of the sacrifices feel manageable.
Cody Schuiteboer, president and CEO of Best Interest Financial, noted that it's important to include fun in your savings plan so long as you don't indulge too much.
He said, "I use the term ‘allocation’ instead of ‘allowance’. Allowance implies that you earn your budget money by following a specific budget plan for that amount. Allocation is a part of your overall budget plan with a certain objective."
The amount will look different for everyone. The point is to plan for it intentionally rather than let it derail you.
4. Things That Reduce Stress
An overly restrictive budget creates its own kind of financial risk.
“Those who try to cut absolutely everything tend to burn out, derail their savings goals in one giant splurge and come out feeling like they'd be better off had they never attempted a savings plan,” Schuiteboer said.
Having a small outlet built into your budget is what keeps the whole plan intact. If a yoga class, a video game subscription or a weekend hike keeps your stress in check, it's worth the spend.
5. Small Joys
Not every worthwhile purchase needs a financial justification. Small, consistent pleasures are part of what makes daily life enjoyable. Eliminating all of them in the name of saving can quietly chip away at your motivation over time.
“For one person, a Starbucks coffee each morning might be the one treat that sets the tone for the full day, and to afford that expense, someone meal plans and packs lunch,” Morgan said.
Identify your small joy, set a realistic monthly limit and let yourself have it.
Aggressive saving is a good way to achieve financial goals. Striking a balance between that and mindful spending on expenses that bring value is a good way to ensure long-term financial success.
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This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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