As I've gotten older I've come to realize what a waste of money clothes are. When I started making a bit more money I spent money on some nice clothes and my mom just messes them up each time she does the wash, they come out really dry or with bleach spots, or fall apart in some way or another. So I don't buy new clothes now, the ones that have made it through the wash this long are sturdy enough to keep me going for a while.
What are the things I splurge on? (And that's what you're really asking about, a splurge idea, because most people wouldn't spend $40 for the hell of it, but you have to, which is interesting).
With $40 I HAD to spend, I would rent some movies I had wanted to see, buy a good face moisturizer with sunblock, buy some Simply Saline nasal spray (which is surprisingly expensive about $7), and some candy and popcorn to enjoy the movies with, oh and a magazine, I hardly ever get magazines, but they are fun, like Esquire and GQ both have interesting article sometimes, plus free cologne samples, and you can cut out the pictures of the hot men and keep them for a collection if you have one.
EDIT: If there's money left over get sunglasses. I'm always losing mine, and need them this time of the year. Good to have lots of them around.