When your coworkers flock to the pricey salad chain around the corner every week for their $14 salad fix, it’s natural to ask: “What kind of salad costs $14? And is it really OK for me to spend that much on leafy greens?”
The answers are: A $14 salad is the kind that you get to enjoy without having to make yourself. And you can probably fork over $14 for a dressed-up salad from time to time — as long as your lunches don’t end up eating into your savings.
Common financial advice tells you to avoid indulging in small luxuries like gourmet salads, coffee-shop lattes or movie popcorn. Although it’s true that these purchases can add up, there’s a way to make it work.
Yes, you could build your own salad at home for far less. But that $14 is also going toward wages for employees, rent on the salad spot, high-quality ingredients and, of course, your convenience.
The key is to build room in your budget for “fun money” — experiences and indulgences — and track your spending as you go.
With some planning, you can have your $14 salad and eat it, too.
How to budget for splurges
If you were to adopt the 50/30/20 rule of budgeting, that $14 salad would fall into the “30” category.
The 50/30/20 budget is relatively simple. It allocates your take-home pay into three areas: 50% for necessities (your rent or mortgage, car payment or subway pass, etc.), up to 30% for wants (things like $14 salads, music subscriptions and flights) and the remaining 20% (or more) for savings and debt repayment.
If your monthly after-tax income is $4,000, you’d set aside $2,000 for rent or mortgage and other necessities, up to $1,200 for wants and at least $800 for savings and paying off debt. You could decide to dedicate a set portion of your wants fund — say, $200 of the $1,200 — for dining out with coworkers, and the $14 salad would come out of that.
Track your spending
An important part of making and sticking to a budget is to track your spending. Whether you prefer to use a budgeting app, keep a spreadsheet or just write things down in a notebook is up to you. The point is to make a habit of looking at your expenses so you know where your money is going and when to cut back.
It also helps to look ahead at your social calendar. Do you have a bunch of birthday parties and happy hours coming up? Factor these events into your budget; keep them in mind when you’re deciding whether or not to order the salad or bring your lunch from home.
More money answers from the Nerds:
- How can people afford to eat out all the time?
- Should I put this all on my card and get the points?
- Which credit cards reward us for actually getting out of the house tonight?