Controlling The Urge To Splurge

I went shopping this weekend to buy myself a new pair of comfortable brown leather loafers for work. I’ve worn my $60 Timberland loafers from Shoe Pavilion (discount store) for the past two years, and they are starting to get holes. I have to say, when it comes time to shop for work clothes, I’m just so uninterested. To me, shopping for work clothes becomes a “work expense” I resent. Because dressing reasonably professionally is a necessity at work, I feel I’m not spending my money on what I want, and that annoys me. My ideal outfit, after all, is a t-shirt, a well worn pair of jeans and flip flops.

I decided I wasn’t going to buy the same old boring shoes anymore. I was on a shoe revolt! Instead of going to DSW Shoe Company or Ross Dress For Less, I went to Barney’s New York to buy a $435 pair of Tod’s loafers (see picture)! I’ve actually been eyeing this shoe for more than two years, and just couldn’t find my size when it went on sale for “only” $250 last Christmas. It’s a good looking shoe, with beautiful leather and a nice rubber sole. However, there’s no way in heck it’s worth $435, or 5X what I’d normally pay for shoes. That said, I bought it anyway, because I wanted to enjoy the shoe, at least temporarily before I see the charge come up on my credit card bill online.

I’ve really spent $0 dollars, b/c the credit card is a wonderful tool to temporarily borrow something without any cash outlay. Where people seem to get in trouble is when they actually keep the item, go figure. Barney’s has a 30 day return policy, and I expect to tempt myself for at least a couple weeks before I wake up, smack myself and realize that $435 is just an absolutely ridiculous sum of money to spend on loafers. I’m just being lazy, and not searching cheaper stores for equally attractive shoes. In the mean time, I’m going to enjoy these loafers to my heart’s content.

My system of resisting the urge to splurge is quite simple:

1) Splurge on things if you really want it, but make sure there is a return policy and that you understand the terms! The initial point of purchase is generally the highest point of euphoria, especially when not paying cash. The euphoria tends to fade over time, and the dread mounts when the bill comes due. If there was a return policy on cars, I’d be all over it! But, as my wife always says when i’m about to buy a new car, “There’s no return policy!”

2) Enjoy the item for the life of the return policy minus 1 day. You need to enjoy the good for as long as possible to rid yourself of the desire for that good. Return it one day before it’s due at the latest, b/c you may forget, or the store may try and manipulate you into not being able to return the good.

3) Take the cost of the item and multiply it by 130% to get the pre-tax income you need to make/spend. Take this pre-tax income and divide it by your hourly wage to figure out how many hours you need to work to buy that good. The first exercise is generally enough to make me not buy anything wasteful. It’s the second item that really pushes me over the edge.

4) Remind yourself never to pay full retail. The reason why luxury goods manufacturer LVMH has 90% gross margins, is because they charge customer 9X their manufacturing cost. Try your hardest to find a similar good at a much cheaper price during your “borrowing period.” Make it an adventure in savings if you will.

5) Finally, take a look at that credit card bill on-line and tell yourself how good it’ll feel not having to pay such debt and return the darn thing! The reward for not splurging is the cash/savings that remains in your bank account! Think about the lost investment returns you’ll be missing, and remind yourself that the money you spent is less money you’ll have for achieving early retirement.

After all these defenses, there are some things in life you just have to have, such as that fine Rolex watch you’ve waited 10 years for ever since graduation. Whatever the case may be, I firmly believe one should be able to treat oneself within reason. For a car, my limit is spending no more than 1/10th my gross income. It’s just when you want to have that 2nd watch, that 5th pair of jeans, or third LV handbag where things start spiraling out of control. I think you’ll have fun resisting the urge to splurge with the 5 defenses above because you’re actually getting to enjoy the item without having to buy it. Don’t ever feel guilty returning an item. It is your right, and your early retirement prerogative!

Related Post: “Mea Culpa – I Just Spent $1,450 At The Apple Store”


Financial Samurai – “Slicing Through Money’s Mysteries”

Sam started Financial Samurai in 2009 during the depths of the financial crisis as a way to make sense of chaos. After 13 years working on Wall Street, Sam decided to retire in 2012 to utilize everything he learned in business school to focus on online entrepreneurship. Sam focuses on helping readers build more income in real estate, investing, entrepreneurship, and alternative investments in order to achieve financial independence sooner, rather than later.

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  1. Anonymous says

    Hey RB! Thanks for your counter intuitive suggestion to just go buy it! :) I'll give it a go for these pair of retro Jordan kicks that came out. It's $350 for the two at Foot Locker. I'll lock my receipt up and just admire em until it's time to return em. I hope i can resist the urge to keep em! hahaha

  2. Anonymous says

    Retailers will love this! …if your readers fail to heed your formula. Or hate this, if your readers find this formula works. After all, how many of us are disciplined enough to make this work.

    My guesstimate is the 20% of us who have a legitmate chance of making it by 40 may have the discipline to follow though. For the other 80 percent, it's bye bye baby! discipline to follow through with your formula that makes you logically want to return this unnecessary luxury.

  3. Anonymous says

    RB, You must have been smelling your shoes and wondering if you should return. :O) I was content with my $20 something work shoes from Naturalizer for a long time until they ran out of the style I wanted. So I started looking for another brand that I could afford and comfortable. I have bought many pairs of Easy Spirit since. I have also retired since! I am not rich, but I am content with my meager retirement pension, two grand a month.


  4. Anonymous says

    This is just silly , either you buy what you need or want or you don t. Adults should be able to control their urges.
    Beside this approach just raise prices for everybody.

  5. Anonymous says

    You'd think adults could be able to control their urges, and yet here we sit, in the worst recession of our careers b/c "adults" weren't able to control their spending in housing, stocks, material goods etc.

    Anon 3:06pm, maybe you've never made a splurge purchase and regretted it, but I'm sure a ton of other people have.

  6. RB says

    Hey Everyone, thnx for your commentary. Yes, this is a bad system for retailers (sorry guys). But trust me, having worked in retail before, retailers have every single trick up their sleeve to get consumers to spend unnecessarily! Our favorite is the Gift Card! Retailers are counting on 30% of you never to use it due to an expiration date or loss!

    I'm not saying we should return everything we buy. Au contraire. We should just think about returning things we know in our hearts are ridiculous splurges i.e. my $435 Tod's loafers, $6,500 Hermes handbags, your 50th pair of Nike kicks, etc. I need to find some different shoes, and I will find something similar for under $80 bucks.

    If all adults could control their urges, there would never be financial crisis's and adultery. We know that's never going to be the case.

    Fight on people! We'll conquer the bombardment of temptations, and utilize evil tools such as the credit card for our own benefits and financial freedom!



  7. FB @ says

    Wow, that's quite a system you have worked out :)

    Mine is a bit more simple

    1. Lust after item

    2. Decide if I really want item

    3. If yes, run through head what I could use as a substitute and if I really need to buy it NOW or if I can wait and find a deal

    Then from there, I tend to delay purchases and end up not buying it in the end :) Win win.

    For what I do buy, I really do have a purpose or want for it.

    Thanks for the great article. Adding you to my reader and looking forward to more.

  8. Anonymous says

    I like your post! For me having to return an item is too much of a hassle but I can see where the points. I know girls that buy fancy dresses, wear them to a party with the tags hidden and then return them afterwards. They can get screwed though if they spill something on the clothes or if the tags slip out!


  9. RB says

    Fabulously Broke – Welcome to my site! You have great discipline in thinking things through before you buy. Looking forward to seeing you more often.



  10. tentaculistic says

    Ok, I have to ask a few more questions about this method. Do you *wear* the $435 loafers for 29 days, and then return it? If so, that is very very not-cool, and bordering (or in my opinion tipping quite far over into) the unethical. The store is going to be much less likely to sell those loafers, with 29 days of street scuffs and wear, at $435.

    Now, if it’s just a matter of looking at them on the shelf (without putting wear on them), I’m ok with it. I think you’re crazy ,mind you, since those loafers look so ordinary to me that I assume the joy comes in the comfort, internal structure, and quality of materials… and most of that enjoyment comes in the wearing, not the looking. Now if you were a woman talking about a shoe that was ridiculously cute and stylish, that’d be something different. I’d still say $435 is too much, but at least understand why it’s worth looking at.

    But I would say, it is often worth a significant investment (maybe not $400+, but around the $150-$200 range) for quality men’s footwear.

    • says

      @ Tentaculistic – Nope, don’t wear them at all. Those loafers are extremely ordinary looking, but they are so comfortable and look better in real life. The strategy is to bask in the glory of the product (hold, touch, smell whatever), and once that initial excitement is over, to then go ahead and return it.

      $400+ is ridiculous. $150-$200 is fine, I agree. I actually don’t think the most enjoyment comes from wearing shoes, especially women’s shoes b/c they are so uncomfortable. The most enjoyment comes from looking at it, and owning the shoes.

      Like a car, most interiors are roughly the same more or less at a certain price point. But, what makes guys salivate is the exterior which turns heads and makes guys think ‘wow.’.

      Thanks for stopping by!


  11. says

    Hello! I like the design of your blog (and content too btw) and I would like to know what theme are you using? Is it your own design or free theme? thanks in advance, regards Pete

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