Setting a budget is a necessity for most adults. But no budget is complete without a bit of fun money. If all you do is pay bills and buy necessities, your budget isn’t going to last long. It is important for you to have some fun in your life, so be sure that you set up your money to bring some joy into your life.
Consider how restrictive diets work. If we were built for restrictions, no one would ever have to go on a diet again. The same goes for our money. We need to use our money for something fun, otherwise, what’s the point of working so hard to earn it? So, how do you put fun money into your budget?
- Follow the 50/30/20 rule
One way to plan for fun money is to use the 50/30/20 rule. Fifty percent of your budget needs to go to paying your bills and paying for necessities. Twenty percent of your budget should go to savings. The other 30 percent can be used at your discretion. If you don’t use the whole 30 percent, then you can put it into your savings for a rainy day. If this percentage doesn’t work for you, then you can always choose a mix that does. Just be sure that you take care of your responsibilities first.
2. Find inexpensive ways to have fun
If you do not have a large fun-money budget to work with, then you should find ways to stretch your budget. Let your financial situation dictate your fun budget. You should not go into debt having fun. So, find inexpensive ways to have fun. Make your own cocktails. Take yoga classes online, rather than buy an outrageously priced membership. Hangout with friends and play cards rather than go to expensive events. Fun is what you make it.
3. Budget backward
When you set your budget, work backward. Start out with how much you have to spend on essentials like housing, food, utilities, and other vital expenses. You can do this by keeping track of how much all those essentials cost you during a typical month. Then, figure out how much you want to save. The amount you save should be based on a percentage of your income, and you can figure that out after you have deducted your essential expenses. Then, you have money left over that becomes your fun money.
4.Consider it an allowance
Your fun money can be like an allowance for yourself. When you earned an allowance from your parents, it was money you used fun things. If you consider your fun money an allowance, you will pay close attention to staying within that budget. If you spend it all, then you will not get more. This is a different mindset than considering your fun money as a bottomless abundance. You might also consider saving your fun money budget for a big event, almost like a short-term savings account.