Splurging on a Budget; You Can Do It

The little things in life like that latest chart-topping single or your favorite gossip magazine may make you happy. But they also add up. “You can easily spend $1,200 a year on [takeout] coffee,” says Ori Schnaps, a co-founder and the general manager of money management site Thrive.

Yet going cold turkey to save cash doesn’t have to be the answer. “That changes too much of your daily routine -- it’s not sustainable,” says Aaron Patzer, the founder of money management site Mint.com. Deprive yourself of a splurge, and you’re more apt to overindulge later. Instead, aim to reduce costs by 15% to 25% each month until you reach the spending target. That’s just enough to make a difference, but not so much that you’ll need retail therapy.

Of course, some discretionary luxuries are harder to give up than others. Before you scale back, try spending smarter. Here’s six suggestions.

Join your favorite bookseller’s loyalty club, and you can often save 30% or more on newly released bestsellers, says Schnaps. Clubs typically also offer extra discounts on pre-orders, as well as regular coupons and deals through email newsletters. If you have to pay to join, make sure you buy enough books to recoup the cost in benefits. (For more tips to save, click here.)

Savings: Right now, members of Borders’ (BGP) free rewards program can save 40% on Malcolm Gladwell’s new book, “What the Dog Saw,” bringing the price from $27.99 to $16.79. You’ll be that much closer to earning a $5 reward, provided for every $150 in qualifying purchases.

Don’t make iTunes your first and only stop. There are plenty of players in the digital music retailing game, and it’s worth your time to shop around, says Andrea Belz, an independent technology consultant based in Pasadena, Calif. Try DownloadShopper.com, which compares prices at the three biggest competitors, iTunes, Wal-Mart (WMT) and Amazon (AMZN). Also visit the artist's web site, where you may find free or low-priced tracks for downloading. (For more ways to save, click here.)

Savings: Miley Cyrus’s “Party in the U.S.A.” goes for $1.29 on iTunes, 94 cents at Wal-Mart and 99 cents at Amazon. You could save 35 cents by shopping around.

Ditch the video store. In-store rentals are your priciest movie-rental option, with a new release going for roughly $5 at chains Blockbuster (BBI) and Hollywood Video. Frequent renters will get more for their buck with a mail-delivery plan from either Blockbuster or Netflix, which start at $8.99 a month for unlimited, one-at-a-time rentals. Infrequent renters and those who return movies quickly might look for a Redbox or Blockbuster Express movie-rental kiosk, where titles cost just $1 per night. That can add up quickly, so crunch the numbers to determine which is the better option. (For more options to save, click here.)

Savings: Forgo Blockbuster store visits for a subscription to the chain’s mail-delivery service, and you’ll pay $8.99 a month to have one DVD out at a time. Someone who rents one new movie a week would save $11 (55%) each month. Pay the extra $3 a month for faster in-store returns and free store rentals and you’ll still save 40%. (You’d also save 55% a month switching from in-store rentals to Netflix.)