Including fun money in your budget is really a must if you want to have balance in your life. I’m not talking about getting all wild and crazy and forgetting your money goals, but you need to have a little in your budget for some spontaneous fun.
There is a difference between having money for random acts of fun and financial planning for a particular event. If you are planning for something like a vacation or wedding then you might want to look at strategies for saving for short-term goals. Fun money is for the spontaneous things that pop up. When fun money is a budget category you can enjoy some spontaneous (or planned) fun without the guilt of taking away from your other financial plans.
Why include fun money in your budget?
While having goals is amazing and can keep you focused there are just times on your journey when you need to let go, have some fun and not pay for it later.
Including fun money in your budget ensures that you have money available to do this.
I set aside money each month that is generally used for date days with my husband. It’s a much-needed time for us and it feels good knowing that we have already budgeted for this time together. If we skip a date, which happens, then we have more money in the pot for the next time or for something else. It’s a win-win and works well for us.
Once you get in the habit of including fun money in your budget it will be a natural part of your budgeting process.
How much fun money to include in your budget?
The amount you add to your budget depends on your current financial situation and goals. Your number will change over time as goals are achieved and you have more money available.
Take a look at your budget as well as your goals and pick a doable number that works well for you. If you are okay pushing the timeframe of your goals out just a tad in order to feel some sanity by hanging out with your friends or family then that is okay. Just be good with your choice.
I recommend starting with a small amount and adding to it as you achieve some of your goals. This works for me because it motivates me. Maybe you start by budgeting $100 per month for fun money until your first credit card is paid in full. After that, increase it to $150 per month. Again, use numbers that work for you. You might be working with hundreds of dollars. Perhaps you need to start at $20. Whatever your number is just be sure that it is reasonable for your situation and know that it will always get better.
How to budget your fun money
There are a few different strategies you can use to add fun money to your budget. I recommend setting aside a percentage of your take-home pay each week or month.
This percentage completely depends on what your current income and expenses are so play around with the numbers in your budget to find the optimal amount for you.
Start with plugging in 5% of your take-home pay (net income) for fun money.
Is that a reasonable number for you? If it is then make sure it is doable. If it is not likely that you can contribute this amount without affecting other goals then either adjust the amount you want to contribute or make changes elsewhere in your budget. The goal is to give you some cash to have some fun without stressing you out.
Changes to your budget are okay
Nothing is set in stone. You can adjust the amount of fun money you budget. My only recommendation is to be careful and not go overboard in this category since you don’t want it to end up hurting you later…and that’s not fun.
Enjoying some spontaneous fun is totally possible and very much needed for all of us, so be sure to add this to your spending plan.
Thanks for reading!
Stay balanced,
Jill