Budgeting isn’t fun, but life should be

Mary Kate Miller
January 25, 2018
10 min read
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Welcome to January, the official month of the budget (it’s not, but it really should be).

You’ve probably seen a million and one pieces on the internet about budgeting and saving in the new year. You’ve even seen a handful of them here. Budgeting is important. That’s why you see so many articles about it. You want to track your expenses, set spending limits, and save.

When making a budget, people are often faced with the “pull yourself together” impulse. When you sit down at a computer and really look at how much you’re spending each month compared to what you’re bringing in, it’s easy to ask yourself, “What am I doing?” Then, there’s an impulse to correct the behavior by locking it out of the budget.

Despite that, it’s important to remain realistic and to budget for fun. You don’t have to be a robot to be financially responsible. By budgeting for fun, you can avoid suddenly going hog wild and maxing out your credit cards. Austerity is great, but it’s almost impossible to live your life based entirely on that model. Including fun in your budget allows you to live your life and enjoy the things that bring you joy, without breaking the bank.

What is “fun money’?

Remember when you were little and you were able to earn an allowance in exchange for doing chores around the house? That little sum of cash was then yours to spend on the toys and treats that your heart desires (unless you were the most responsible 7-year-old ever and were already putting that money away for a future down payment on a car or a house).

“Fun money” is basically the adult version of an allowance. It allows you the flexibility to indulge in those occasional impulse purchases “just because” without blowing your budget to smithereens. When people think of “fun money,” they often group it in with entertainment money or restaurant money. Fun money should be a separate entity. As financial expert Dave Ramsey explains, “It’s a separate amount to spend however you want, whenever you want.”

Why you want to give yourself an allowance for “fun money”

You need to budget for fun money because, Ramsey explains, you’ll end up spending it whether or not you do. True, you don’t need a massage, that gorgeous blouse that’s 70% off, or a game of golf. But when the mood strikes, you’re going to be indulging anyway, so the best approach is to budget for it in advance.

Again, think of it like a childhood allowance. When you were little, an allowance was a reward for doing a bunch of chores you didn’t want to do. As adults, our lives become dominated by activities we’d rather not be doing. We still have the impulse to play and treat ourselves every once in a while. It’s not necessarily a bad habit. The occasional indulgence can be an important component of self-care.

How much to budget for “fun”

The amount that you budget for fun each month entirely depends on your income and other expenses. In general, financial planner Tom Corley suggests that 10% of your income is the magic number for all money that is fun related— though that number also encompasses your entertainment, restaurant, and miscellaneous money, so don’t go on a spending spree just yet.

Realistically, that number is going to be somewhere between $10 to $100 each month, depending on the income your household is bringing in. If you’re just starting out budgeting, you’ll want to keep your “fun money” limited. It’s important to remember to maintain your larger financial goals. You want to focus on limiting debt like student loans, over your “fun money.” If you’re out of debt, you have a little more freedom. Just remember that budgeting for fun isn’t an invitation to go over that budget, it’s a helpful tool to make sure you stay on track.

Make it tactile

If budgets and “fun money” are new to you, you might benefit from making it concrete. Keep your fun money as cash in your home. Each week or month you don’t spend it, you can add to that “fun” bank. Impulse purchases should be taken from this fund in order to ensure you don’t overspend.

Enjoy it

When you budget for “fun,” you are doing so with the express purpose of allowing yourself the joy of items and experiences you enjoy. You’ve planned for it. It’s in your budget. Allow yourself to enjoy it.

This seems simple, but if you get hung up lamenting on what you should be doing with your “fun money” rather than what you want to be doing, it’s not really serving its purpose. Including “fun money” in your budget is a way to allow yourself the things that make you happy, so when you spend it, let yourself experience that joy. It’ll make following the rest of the budget easier.

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