You deserve it, can you afford it?

^{By Bromwich+Smith | 809 words | Reading time: 4 minutes, 27sec | Last Update: 2023.12.06}

As the holidays fast approach, many Canadians are looking at this being the year to treat their loved ones. It may be difficult to think about spending this year, after prices have gone up everywhere we look. With increased stress brought on from the increased cost of living, many Canadians are looking to indulge in entertainment, travel, and transportation. So, let's take a closer look at the idea of deserving and spending, as it pertains to your financial decisions. 

The concept of deserving something can be subjective and tricky to define. What does it truly mean to "deserve" something? In a broader sense, we all aspire to lead a good life and acquire the things that bring us happiness. Yet, spending is a highly personal matter, and what one person considers a deserving expense may differ from another's perspective. A much needed daily $5 coffee on the way to work for one individual might be viewed as a monthly indulgence by someone else. Determining who deserves it more or who can afford it better is not a straightforward task. The answers to these questions are subjective and dependent on individual budgets and financial goals. 

Undoubtedly, you should allow yourself to enjoy the things you desire. However, the key question is whether you can truly afford these expenditures, be it a spa day, shopping spree or a vacation. Merely having sufficient funds in your bank account is not the sole indicator of affordability, particularly if these expenses have the potential to derail your financial goals. Therefore, while inquiring whether you can afford something is a valid question, it's even more crucial to determine if the expense aligns with your financial goals and fits within your budget. 

Before making a significant purchase for your enjoyment, here are some important questions to ask yourself: 

1. What is important to you? For some, having a night off each week from cooking dinner is important whereas someone else would happily take those savings and put that money towards their annual family vacation. There is no wrong answer, setting goals and knowing what’s important to you and your situation is a personal choice and your answer will very likely be different from others around you- and that’s ok! 

2. Do you have a savings account and/or emergency fund? Saving for retirement is something we recommend you consider before you consider indulging in non-essential and luxury items. If you haven't started saving yet, it's essential to begin allocating a portion of your income regularly to both a savings account and an emergency fund. Once you've established these financial cushions, you can move on to the next step. 

3. Have you budgeted for it? If a particular expense is not included in your budget, you really need to consider where else you can find the budget from.  Every dollar you earn and spend should be accounted for in your budget. If an expense is not planned for in your budget, you technically do not have the financial means to cover it. Having a budget essentially means having a financial plan, which is a pathway to financial freedom. Start by meticulously tracking your income and expenses to gain a clear overview of your financial situation. The remaining funds should be allocated to various financial priorities, such as savings, emergency funds, debt repayment (if necessary), and specific items you wish to save up for. 

4. Do you have outstanding credit card debt? If you are unable to pay off your credit card balance in full each month, you might be incurring substantial interest charges while making minimal or no progress in reducing your debt. This is an opportune moment to consult with Debt Relief Specialists if you have debts that need to be addressed, allowing you to start anew with a clean slate. 

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Now, assuming you've satisfactorily addressed these considerations, what's the next step? If you can make the purchase using cash (or put it on your credit card with the ability to pay it off immediately) without compromising your capacity to manage your regular bills, savings, debt repayment, and other financial commitments, then you should go ahead and treat yourself. It's easy to experience guilt when integrating a few luxuries into your budget, but remember that you have the autonomy to decide what you want to prioritize in your spending. If it aligns with your budget and financial capabilities, you have every right to indulge in it. 

So, the next time the thought that you deserve something arises, remind yourself that the more pertinent question is not whether you deserve it, but whether you can afford it and if it fits seamlessly into your overall financial picture. 

While we're all eager to enjoy life's pleasures and treat ourselves, it's crucial to approach these indulgences with a financially responsible mindset. Carefully considering your financial situation, budget, and goals is essential to ensure that you can truly afford the things that bring you joy without jeopardizing your financial well-being. So, go ahead and treat yourself when it aligns with your financial plan, and relish in the well-deserved moments of happiness and relaxation. 

Bromwich+Smith has a number of debt relief strategies to help you regain control of your finances and get your life back on track. Reach out today for a free, confidential, no obligation consultation. Bromwich+Smith’s Debt Relief Specialists are available by phone at  1.855.884.9243, Live Chat  or you can request a call back at contact us page. We want to see you flourish!    

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