I think that there's another factor to consider in deciding when, how much, and whether to spend: The source of your income. Very few jobs are guaranteed for life, and if you're a working person or even a professional who depends on your wages/salary to cover your living expenses, becoming unemployed could be catastrophic to your finances. Even if you have an emergency fund, that could disappear before you find a new position.
If on the other hand you have a sure source of income, such as social security or an annuity, this might give you a little more wiggle room in planning your budget and making that occasional extravagant purchase.
|