When you think of the term “mid-life crisis”, do you picture middle-aged women dressed like runway models, or gray-haired men indulging in motorcycles, boats, or sports cars? A mid-life crisis can indeed lead to lavish purchases. After a lifetime of hard work, taking care of a family, and saving for retirement, it can be tempting to do something just for yourself. And often the temptation leads us into some pretty risky, self-indulgent purchases.

So what’s the danger in a little fun? Nothing, if you can truly afford it and your spouse is on board with the plan. But as one Wells Fargo study found, 41 percent of people in their fifties are saving nothing for retirement. That’s a pretty scary statistic, because it means 41 percent of workers at their lifetime earnings peak aren’t taking advantage of their higher salaries to prepare for their golden years.

To prevent emotional, impulsive decisions from wrecking your financial life, try setting up some roadblocks:

● Make a standing agreement with your spouse to discuss and agree upon major purchases (over 500 dollars, for example)
● Take a more expensive vacation than usual, and tie it to a special event like your anniversary or birthday to make it extra special
● Allow yourself a hobby that brings you youthful enjoyment, but which doesn’t break the bank.
● Don’t deprive yourself completely. You don’t need an enormous jewelry collection, but splurging on one nice piece for your birthday is okay. Or, you may not really need your own boat, but renting one and spending a few days on the lake each year would be a good substitute.

The point is that, much as a dieter is tempted to cheat when they deny themselves all treats, you may be tempted to blow your savings if you never treat yourself at all. Incorporate a few small indulgences into your budget to reward yourself for decades of hard work, but avoid setting yourself up for financial disaster with large, emotionally-driven and unnecessary splurges.

14105 – 2015/1/13