The Urge to Splurge for 2011

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Cruise FundFor me, 2011 is turning out to be a much better financially than 2010, when I was laid off for part of the year. For most of my peers, that is case as well. But what life is fun without the room for occasional splurges? (Although you could say that I have already splurged enough.) In fact, it appears that 2011 might become the Year of the Splurge after most Americans spent the 2008, 2009, and 2010 on a limited budgets and shopping bans. 

Many consumers seem cautiously optimistic about 2011, at least compared to 2010. CNN Money recently put a gallery of consumers who shared their planned splurges for 2011: an iPhone, a family trip to the Bahamas, a new car, new clothes, a kitchen remodel, and an investment property. Even those without jobs are looking forward to a brighter prospects, which in turn encourages them to loosen the purse strings.

My favorite splurge of the ones profiled by CNN Money is of course the biggest, from Monaica Ledell of Kansas:

I worked hard to decrease debt and increase my credit score. I now have a new business and was able to steadily grow as an online marketing consultancy. Things have settled down a bit and my clients are feeling more at ease. I feel less anxiety about the economy, I feel like it's a little bit safer to take some risks. I'd like to buy one piece of rental property, a single family home. I want to make a strategic - smart decision - and one day hopefully have a few apartment complexes to maybe retire on.

Personal finance bloggers agree that a splurge (big or small) is a healthy thing as long as it doesn't disrupt your long-term financial goals. In fact, splurges can help motivate you to reach that savings goal or debt-payoff objective. A budget is the stick, but a splurge is a (delicious) carrot. Maria at Kosher On A Budget explains: "We build "splurging" into our budget. We call it blow money -- but you can call it splurge money, too." LuLuGal at How I Save Money started a dedicated splurge fund so she can spend guilt-free when she needs "a break from all the frugal stuff." Sometimes, VH at Funny About Money argues, a splurge can be an investment in one's future health and happiness. She purchased a new gas grill that cost $400, but that grill is worth the price because it will help her eat healthier in the long-run.

I don't have any Big Splurge in mind for 2011, but I do know that I am already feeling looser with my wallet in terms of smaller, sub-$100 discretionary spending.

Do you have any big splurges planned for this year?

Savvy Living Through Personal Finance | @WellHeeledBlog

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