When it comes to ‘splurging,’ I’d say my weakness is a really good bottle of red wine (and when I say ‘really good,’ I mean still less than $25).
The reality is, we all splurge from time to time. In fact, according to a recent poll, 85% of Americans admit to splurging — buying something they don’t really need.
Maybe you celebrate [too many] hard days of work with an expensive bottle of wine or maybe you just simply can’t turn down a ‘good deal.’ You throw caution to the wind, because, hey, you deserve it, right?!
Read more: Doing this one thing will help you stop wasteful spending
New app wants to help stop you from splurging
While I’m sure you totally do deserve it, what if you could have a little voice of reason around to make you think twice?
That’s the idea behind a new app called Splurge Alert from the folks at Ally Financial, an online-only bank.
Here’s how it works: first you identify out your weak spots, the stores, restaurants or other places where you know you’re likely to spend a little too much. The app then uses geo-location technology to alert you that you’re entering a ‘splurge zone.’
So you’re probably aware that you’re walking into Bloomingdale’s (because you deserve a new dress), but your friend or family member also now knows — since the app sends them a notification when you walk in.
Picking a ‘buddy’ is part of Splurge Alert’s effort to talk you out of wasteful spending, and it’s a great way to keep you accountable when you’re trying to stick to a budget. So many people make big plans to save more money, but when there’s no accountability involved, those plans often go right out the window — along with a lot of your hard-earned money.
If my husband were alerted every time I approached a Bloomingdale’s a few years ago, it would have saved me a whole lot of money (on dresses I totally needed).
‘It helps you because it makes you stop and think,’ said Andrea Riley, chief marking officer for Ally.
The app is still in beta, but consumers can sign up to test it. Ally says it should be ready for a full release by June.
Read more: How to save more money: Rethink your spending
The bigger implications of splurging
Ally says the point of the app isn’t to shame people, it’s more about getting them to stop and think about whether a purchase is really necessary.
And we’re talking about more than just a fancy coffee every once in a while.
When a rare splurge — whatever it is — turns into a weekly or daily habit, it could be preventing you from reaching your bigger financial goals, like say, buying a house or even building an emergency savings fund. So when it comes down to it, the app serves as a reminder of your bigger priorities — something that so many people often lose sight of and they end up having to put off big plans in life.
If you’re ready to get your budget back on track, here are some more ways to get started:
- Getting back to basics: An easy way to start budgeting
- 19 ways to cut costs and save more each month
- Apps to help you ditch your debt
