Splurging Is Still Okay

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New shoes here, a weekend getaway there. Our financial contributor explains that treating yourself is important even during tough economic times ... so long as it's done wisely.


From NPR News, it's Day to Day. We've been hearing a lot lately that the only way we can get out of the current economic crisis is to get Americans spending again. But a lot of folks are worried about paying for things that aren't absolutely essential. We're joined now by Day to Day's personal finance contributor Michelle Singletary, who is here to tell us how to spend without fear. Hi, Michelle.


COHEN: So, shouldn't we be tucking away every last dollar we have? Why should we even think about going out and splurging?

SINGLETARY: It's a good question, but listen, if you are not mired in debt and you're not sweating whether or not you're going to have a job tomorrow, it's OK to spend if you've taken care of all the basics. You've got an emergency fund; you're pretty secure about your job; then go ahead and spend. My husband and I just put a deck on our house, but we've saved for it for the last four years. And you know, I was fretting about it. And my husband was like, we have the money; this is why we saved it; let's spend it; and we did. So, those of you who are in that position, as long as the basics are taken care of, go ahead and spend, and just spend smartly.

COHEN: In my household, food is the big topic. We've been doing a lot of cooking at home lately. I think my husband is thoroughly tired of my turkey burgers.

(Soundbite of laughter)

COHEN: So, how can we still eat out and avoid some of these high food prices?

SINGLETARY: You have to just be creative. For example, you know, instead of going to dinner, go to brunch. Brunch and lunch prices are cheaper than the dinner menu. When you go, listen, you can eat off the appetizer section. Don't order a drink and just do what I call cheapskate lemonade, you know, water and lemon.

(Soundbite of laughter)

COHEN: Nice.

SINGLETARY: So, you can just trim around what you eat. So, you can still go out. Share an entree; some of those entrees are so big that you can. And my husband and I have done that. So, there are ways to still go out and eat and enjoy yourself and still cut the budget.

COHEN: OK, besides the cheap-y lemonade, what are some other ways to save on expenses?

SINGLETARY: Well, let's say, you're grocery shopping. There are ways to save at the grocery store. Sign up for the loyalty card, you know, that card where you can get the brand discounts, store brand discounts. Absolutely go ahead and do that. Keep in mind that bigger is not necessarily better. Be careful to look at the unit price. That's the key. If you're going to go shop at these mega, you know, stores, where you get, you know, 10 gallons of whatever, just be very careful, because oftentimes when you do that, a lot of food goes to waste. You want to switch to the store brands. I mean, just about, I would say, probably 60 to 70 percent of the items in my house are store brand. And if your kids are brand conscious, I'd tell you just take the label off; they'll never know the difference.

(Soundbite of laughter)

SINGLETARY: If you're going to serve them soda, just, you know, pour it in the pantry or pour it...

(Soundbite of laughter)

SINGLETARY: Out of sight so they don't see that it's the knockoff brand.

(Soundbite of laughter)

SINGLETARY: When you're pushing your cart down the aisle - here's a key thing - when you're shopping, look up and look down because the good price items are usually high up and low because the brand name items are put at sight level.

COHEN: And just briefly, Michelle, is there one splurge that you'd recommend during a recession?

SINGLETARY: You know, listen, for some women, it's getting their hair done. And this is what I did. I have a wonderful stylist, hair stylist, and I was thinking, you know, I can't get my hair done as often as I'd like because I'm trying to save money. And so, she and I came up with an agreement that I will wash my hair and then she does the rest, and that saved me about 20 percent of my bill. So, you know, go to the professionals that you use and negotiate something like that so that you can still get that luxury thing that you want but at a discount.

COHEN: Michelle Singletary is Day to Day's personal finance guru. She writes "The Color of Money" column for the Washington Post. Thanks, Michelle.

SINGLETARY: You're welcome.

COHEN: If you have a question you'd like Michelle to answer, go to our Web site, npr.org/daytoday. Click on the Contact Us button, and be sure to put the word "Michelle" in the subject line.

(Soundbite of music)

COHEN: Day to Day returns in a moment.

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