How to Indulge in the Things You Love Without Wrecking Your Budget

“Budgeting” doesn’t mean boring. With creative thinking, you can create a budget that lets you splurge on what you enjoy most.

Whenever you read advice on how to create a budget or save money, it almost always involves lots of sacrifice—giving up your lattes, dinners out with friends, cable television, and more.

But here's the thing: You don't have to sacrifice all of the things you love just to be financially responsible.

Budget living might require some modifications, but it definitely doesn't mean all forms of enjoyment must come to an end.

Compromising your quality of life for the sake of penny-pinching actually defeats the purpose of budgeting.

The whole point of managing your finances is to attain financial freedom so you can, in fact, have the things you want.

The beauty of applying money-saving tips and creating your own budget is that you get to give each dollar a job.

You are the one in control—no financial guru gets to dictate exactly how you should spend your money.

However, there is one rule of thumb you need to follow to make this work: Cash outflows have to be less than cash inflows.

Once I applied this rationale to my own finances, I started to see significant changes in my bank account, and that gave me piece of mind.

To come out ahead, the formula is simple: Earn more, or spend less.

Bigger surpluses put you closer to your goals, whether it's your dream vacation or paying off a nagging debt.

2018 Most Popular Financial Goals

Read on to find out how you can start making your dollars work for you—by creating a budget that includes even those indulgences that give you joy, and personally mean a lot to you.

Your Budget Makeover

Set a leak-proof budget (and still live the life you want)

Oftentimes, creating a budget is an eye-opening experience that leads to better choices moving forward.

I spent how much on lattes and Uber rides?!

Once you assess your spending (as in, "I spent how much on lattes and Uber rides?!"), you get one step closer to solving the mystery of your disappearing money.

We've got some easy step-by-step guidelines for you to follow:

  1. Step #1: Figure out your monthly income.

    Pull out your pay stubs and launch your calculator app.

    For every-other-Friday paycheck, multiply your take-home pay by 26 (the number of paychecks you get in a year).

    Then divide by 12—that's your monthly income.

    For a weekly paycheck, multiply take-home pay by 52, and divide by 12.

    If you get paid hourly, freelance, or make commission, you can estimate your monthly income by adding up the last six months of income and dividing by 6.

    Don't forget to include alimony, child support, and any other non-salary income.

  2. Step #2: Print out the last three months of bank statements to add up your cash outflows.

    This is how you'll figure out how much money you really need to live, and how much is left over for the stuff important to you.

    First, separate fixed monthly bills (mortgage/rent, utilities, phone, subscriptions, memberships) from variable expenses (food, recreation, miscellaneous health care costs, etc.)

    Next, categorize expenses into necessities (shelter, food, electricity, transportation), things you want but don't really need (streaming services, recreation, fitness), and stuff you could do without (this varies by individual.)

    Finally, add everything up and compare your total outflow to your income.

    If you don't have an ample surplus, keep reading—we'll get you there.

  3. Step #3: Be honest about your wants.

    Which areas of your spending could use some improvement and which things are non-negotiable?

    It's all about planning.

    Write down all the things you love doing or that bring you joy, then rank them in order of importance.

    For some, visiting family in Europe each year is a must.

    For others, it could be a weekly date with your partner or a monthly massage.

    If you prioritize your appearance, frequent salon appointments can be a worthy expense.

    Or you might feel that a home cleaning service that totally frees up your weekends should rank on top.

    To achieve your top priorities, you have to scale down spending in your less important categories (especially on your credit card—danger!)

    That's how you can save and still keep doing the things you love, indulging in the small luxuries that make your life easier and truly worth living.

  4. Step 4: Build your budget, and follow it.

    Start putting those dollars to work.

Here are some tips to get you started on the right path:

Pick a system you can stick with. You can create a budget and track your spending using a spreadsheet, an app, or even with an envelope system.

Whichever budgeting method works for you is fine, but do your best to stay as close to the parameters you set as possible.

Create some wiggle room. Just because you say you're going to spend $500 on groceries doesn't mean you have to.

If you manage to only spend $440, that's an extra $60 you can use elsewhere.

Don't forget to budget for big goals. Remember, not all of your leftover money is for splurging—some should be earmarked for other financial goals—like paying off debt, retirement savings, or building an emergency fund.

Now that you have an idea of how to budget, you can learn how to stretch those dollars so you can indulge.

Become a Savvy Spender

Embrace a frugal foodie lifestyle

Cooking your own food will save you money overall, but it doesn't mean sacrificing on taste.

Top Three Reasons For Meal Planning in 2017

Investing in a cooking class, decent cookware, and good quality ingredients can provide a lifetime of delicious meals that taste just as good—if not better!—as the far more expensive meals that you pay for at restaurants.

That being said, don't think you can never enjoy a night out again!

On the contrary, go ahead and dine out or order in once in a while if that makes you happy—just do it in moderation.

Ready to do some foodie planning?

Here are some other ways to have your cake and eat it too (without going broke):

Conquer the grocery aisles. For everyday groceries, build weekly menus based on which ingredients are on sale, get the store loyalty card, and snip those coupons.

Experiment with dishes that use inexpensive staples you can buy in bulk like beans, lentils, rice, and pasta.

Choose less expensive cuts of meat for making hearty stews and soups.

Put those kitchen knives to work and do your own slicing and dicing to avoid pricey pre-cut produce.

Look for dining out deals. Go out for late lunches, sit at the bar and order half-price appetizers during happy hour, look for "kids eat free" or "buy 1 get 1" promotions on weekdays, buy a Groupon, etc.

Other tips for cutting down the bill?

Share an appetizer, give yourself a one- or two-drink limit, and get your daily coffee or dessert fix at home.

By taking your grocery game to the next level and setting some restaurant rules for yourself, you can satisfy your appetite for good eats.

Create a home you'll love, without going house poor

Spending time at home is more enjoyable when your surroundings give you comfort.

Become a home décor DIYer. Check out YouTube, Pinterest, Instagram, or a simple Google search for DIY decor ideas.

You'll be surprised at the chic looks you can achieve without spending a fortune.

You'll discover ways to transform everyday objects into everything from shelving to accent tables to seating.

Never pay full price for furniture. Ask if you can buy floor samples or lightly used furniture or accent pieces, then haggle the price even lower.

Also, check out discount retailers, Craigslist, and yard sales to find unique décor pieces—from wall art to lighting—that are budget-friendly.

Whether it's rearranging your furniture, adding budget room accents, or sprucing up the joint with a fresh coat of paint (that was on sale!), affordable home décor is within your reach.

Maintain a fit lifestyle without ruining your financial health

Striving for good health by exercising regularly can save you a fortune by helping to prevent a slew of serious medical conditions.

However, there's a reason why the health and fitness retail industry is booming—it's big business, and if you're not careful, you can end up with expensive gear and gym memberships you don't use.

The good news is you don't need to invest a lot of money to develop an effective and fun fitness regimen.

There's one important exception—don't skimp when buying sneakers, since good quality footwear will help prevent injuries that cost a lot more to treat than what you save.

Once you lace up, here are some other money-saving tips to go frugal with your fitness:

Home workouts can work as well as a paid gym membership. If you don't mind working out solo, you can get fit at home.

Look for YouTube channels or apps that offer at-home workout routines, from yoga to calisthenics (and everything in between).

You can use bodyweight exercises or buy an inexpensive kettlebell or dumbbell set.

If a treadmill, bicycle, or elliptical trainer is your thing, see if you can get one used and discounted.

Seek out free or inexpensive classes. You can sometimes find free fitness programs at local community centers, libraries, or athletic stores, so follow these groups on social media or get a copy of their schedules to stay informed.

Pay for a low-cost gym membership if you'll use it. Although some experts point to gym memberships as a spending category to cut out, that's doesn't apply to everyone.

U.S. Fitness/Health Club Memberships from 2000-2016

If you work out a few times per week and thrive in a group setting, make room for it in your budget.

If you're signing up at a new gym, ask about discounts applicable to your case, such as if you're a first responder, a student, or a senior citizen.

Bonus tip: See if your health insurance or employer will reimburse you for a portion of your fitness club bill—some do.

Make the great outdoors your gym. You can hike, jog, and even use playground equipment like monkey bars and benches for some moves.

Fitness is an investment toward your long-term health, so don't feel guilty—find ways to make it work.

Travel with no regrets, but within reason

You work hard, so why not maximize the use of your vacation time to see new sights?

Get a credit card with travel rewards to earn free flights and hotel stays. If you have strong credit, you should consider applying for a travel card.

Look for a travel card with a solid sign-up bonus of around 50,000 points, which can usually cover a domestic round-trip flight.

Then, by using the card for all of your expenses (that is, your already-budgeted items that you will pay for in full each month), you'll earn more points to fund future trips.

Travel with flexibility. Booking off-season trips, and flying mid-week or late at night from smaller airports, can save tons of money.

Also, consider other modes of transportation, like road-tripping it, or seeing if travelling via Amtrak costs less.

Opt for a staycation. If you have national parks, beaches, or woods within driving distance, plan some day trips.

Get a real-life history lesson by visiting historical landmarks, museums, or taking a walking tour.

Pack some lunch and hit up local zoos, farms, or aquariums.

Look beyond hotels. Keep an open mind when it comes to lodging alternatives.

Try and to find low-cost places to settle in for a couple of nights.

Better yet, if you have family living near a destination you'd like to visit (and they have the room), ask if you can stay with them for part of your trip—you'll not only be able to catch up and reconnect, you'll also save big.

If you have access to a kitchen where you stay, try to cook some of your meals to save on eating out too.

Scour the web for travel deals. Once you know that you'd like to book a trip, monitor airline and hotel prices regularly to spot deals.

You can also visit websites like Kayak, TravelZoo, and Travelocity to compare prices.

Traveling is a memory-making experience which, personal finance experts say, gives more value to people than material items that depreciate.

There are countless resources online help you travel on a budget—do your research, and start packing.

Be the (budget-friendly) life of the party

It can feel like a bummer to not be able to get out as often as you like to socialize with friends, but entertainment is expensive!

So why not have those friends come to you?

Or, find group activities that won't break the bank …

Entertain your friends at home. From game nights to movie marathons to potlucks, it doesn't have to cost a fortune to have a few laughs.

Check out minor league sports teams. Major league tickets and concessions can eat through your "fun" budget fast.

Look for free or low-cost entertainment. Some towns and communities offer free concert series, boardwalk events, and festivals—especially during the nice weather months.

Don't sit at home and sulk just because you're on a budget.

Spending time with the people you care about doesn't have to cost a lot.

Look amazing from head to toe—no debt required!

You don't need to have a full closet or hire a celebrity stylist to look and feel great.

There are lots of strategies for looking your best:

Invest in quality classic pieces you can use in multiple ways. Neutral staples can be mixed and matched, giving you a lot of bang for your buck.

Timeless classics like a good pair of jeans, a crisp, button-down white shirt, a sharp blazer, and a little black dress have lots of mileage.

Then find ways to use those pieces in a variety of creative ways—add a colorful scarf, belt, and heels one time, and a cropped jacket and boots the next time.

Avoid trendy items you'll only wear once or twice. That'll just lead to buyer's remorse.

But do pick up some low-priced but trendy accessories that can help you dress up your outfits without unnecessary spending.

Shop off-season clearance to score deals. Sales racks, discount retailers, and even consignment shops have lots of hidden gems—and even some designer labels—for a fraction of the price.

Also, learn to see past department store and online retailer tricks to sort out the good deals from the subtle yet clever marketing ploys.

The bottom line is that your clothing budget is best spent on items that you'll really enjoy wearing for months to come and won't end up in the back of your closet.

Survey: Where Do Consumers Shop For Clothing Or Accessories?

And if you can score them on sale, even better.

Hobbies make you happy, so don't give up on them

Some hobbies are more expensive than others, so if yours is getting too costly, find ways to scale down.

Get the equipment you need second hand. Online resale sites are full of people getting rid of things they enjoyed once but have probably outgrown the need of.

You can find everything from scrapbooking tools to sports equipment and more.

Buy supplies in bulk. If you're into something like crafting, you can often find supplies online much cheaper than you would at a craft store.

And don't forget about dollar stores—there are always treasures to be found there.

Find a hobby that pays off. Gardening is a popular hobby, and once you get good at it, you can save money by growing your own flowers or fresh herbs and produce.

The same goes for furniture restoration, crafting, or learning to sew, all of which can evolve into ways to earn extra money.

And don't forget about free hobbies like bird watching, reading (pick a library book and start a book club!), and volunteering.

If something enriches your life, then make room for it in your budget so you can keep on doing it.

Budget living and YOLO experiences are not mutually exclusive

You don't have to choose between keeping your finances in check and having an awesome life—after all, you only live once, right?

The first step is to take the time to figure out your cash inflows and outflows.

Using those insights, create a budget that includes your needs and the wants that are most important to you.

To find extra dollars to put toward the things you love and the activities that bring you joy, use some of the savings strategies we shared with you.

And there you have it: A fulfilling life full of fun and adventure that's within your reach and your budget.

I've made it my life's work to help ordinary people live a financially stable and fulfilling life by sharing the best information available on a wide range of personal finance topics.

So I do hope you'll be able to apply some of the cost-saving tips we've laid out for you here so you can keep on saving while you keep on enjoying life.

What's the best budgeting tip or savings hack you know of?

Let us know in the comments below!

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