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What are you willing to go into debt for?

What we'll cover

  • Tips for healthy spending habits

  • When a splurge is appropriate

  • Some examples of good debt

Is there something you really want that you're willing to go into debt for? Or, maybe it's a necessary purchase? Ideally, money is meant for more than necessities, but it can be challenging to strike a balance between fun splurges and smart money decisions. If you're looking to find a happy medium, you've come to the right place.

Splurge on your long-term wants

If there's something you've wanted to do for a while (like a spa day or seeing your favorite band perform live), it may be worthy of a splurge. Focusing on your long-term wants will help you resist fleeting impulse purchases that can give you buyer's remorse.

One way you can stay accountable is to write down your splurge ideas when they come to mind. If you still want to make that purchase in a month, create a plan to make it yours. Savings buckets, a feature of an Ally Bank Savings Account , can help you organize your money and visualize what you're saving for.

Non-monetary value plays a role in evaluating whether your purchase is worthwhile.

Recognize the value you’re getting

When you buy a new suit or pay for a nice hotel, you're getting more than just the item. A tailored suit might boost your confidence during your next job interview, while that prime-location hotel might give you more time at the beach during your next vacation . Non-monetary value plays a role in evaluating whether your purchase is worthwhile.

Keep track of your expenses

Spending extra money on an international trip might be feasible, but buying a new car at the same time could put a dent in your finances. To avoid unwanted financial situations, find a budget that matches your lifestyle, and outline how much you're willing to spend on your “wants."

If you already have built up debt, find a strategy to pay it off and factor those payments into your budget. By keeping track of the numbers, you can determine which feel-good splurge fits within your spending plan .

Enjoy your purchase

Once you've decided to treat yourself, enjoy it! By buying items that make sense with your budget, there's no need to second guess your choices.

Some debt can benefit your overall financial picture

You may feel like it's smart to avoid debt at all costs, but the truth is debt can be a valuable tool in helping you build long-term wealth. Take a look at these three examples of good debt.


For many, homeownership would be impossible without a mortgage. But even if you have the cash available, it could be prudent to take out a loan instead. Getting a mortgage loan to fund your home purchase gives you space to divvy up your savings rather than tie them up in a single asset. In fact, it may be beneficial to take on a mortgage and give your cash time to grow .

Home repairs

Taking on debt for home repairs could help you get more money when you sell. For example, let's say you want to install granite countertops and new appliances in the kitchen, but to get the job done, you have to take out a $15,000 loan. After the remodel, your home value could increase — and you have a new kitchen to enjoy.

Student loans

Student loans go toward supporting your personal education and career. Consider important factors such as the price of tuition and estimated salary upon graduation.

Plan but stay present

While it's important to plan, save and work toward building wealth, don't forget to spend some hard-earned money on yourself and the things that will help you enjoy the chapter of life you're in today. Having “wants" isn't a bad thing. By embracing a healthy money mindset , these purchases can bring you joy while you keep building toward your future.

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