Instead, they tend to hear one of two things.
Or the ever-popular,
“So I have to stop going to the pub so much, right?”
But here’s the great thing about budgeting:
It can actually help you spend guilt-free on the things you really love.
And I speak from personal experience on this.
My Budgeting Journey
See, I was one of those people who thought that having a budget meant that I’d never be able to spend money on the things that I liked.
For years, I’d spend money if I had it in my account, plain and simple.
While this never resulted in any major budget disasters, it left me with a pretty tight spending limit by the end of the month. And in some cases, it also left me feeling pretty guilty when I’d spend hundreds of dollars on a thing, just because I wanted it.
My spending would vary wildly from month to month, and there was never much thought put into the things I bought.
If I could afford it and I wanted it - I bought it.
Never mind that there were probably other things I would have preferred. Or the fact that whoops, I have to pay for insurance next week.
These days, I’m a firm believer in budgets. And I can honestly say that I still spend money on the things I like. From, yes, going to the pub with friends, to buying toys for my dog.
The best part?
I do it guilt-free. Because I’ve got a specific line item in my budget just for fun.
That’s right: I set aside a certain amount of money to spend on things I like every month.
Since I know everything else has been taken care of already in my budget, I can spend that whole amount of money on things I love. No guilt. And no stress required.
Sounds like something you’d be into?
Here’s exactly how you can build your own FUN budget - and stick to it, too.
How Much Can You Spend on Fun?
The first thing you need to do is to take an honest look at your current financial situation - and determine how much you can reasonably afford to spend on fun every month.
It’ll be different for everyone, and my fun budget isn’t going to be the same as your fun budget.
Related: How to Score Cheap Movie Tickets
There are two ways to approach this process:
- working backwards, or
- leaning on percentages.
Here’s how to implement them both (and yes, you can use them together if you want to go all out!)
Option #1. Work Backwards
To use this approach, your first step is to set up a budget spreadsheet in Excel (or download this pre-made one that’s ready and waiting for you!)
Pop open that spreadsheet, and start to input your known expenses, like:
Once you’ve got your basic necessities in there, add in your monthly savings for your different financial goals. (At a bare minimum, that should mean setting aside some money for retirement every month!)
Once you have your basics and your savings squared away, look at how much money you have left over. Your next step is to allocate that money to your other priorities - and yes, fun can and should be one of them!
Give yourself a set amount of fun money that works with the rest of the budget you just built. (See what I did there? I totally tricked you into making a budget with the promise of fun.)
Option #2. Lead with Percentages
If you’re sitting there, thinking: “You didn’t fool me, I still haven’t made a budget,” fair enough.
You can also start with your fun budget by relying on percentages.
See, there are about a zillion different percentage-based budgets out there. And they’re often referenced by money experts as a good gut check for your money.
That’s where people get advice like not spending more than 30% of your income on housing - it’s all based on a recommended percentage-based budget.
In most of those percentage-based budgets, your “fun” budget is going to encompass almost all of your discretionary spending. This includes everything other than housing, transportation, debt repayment and savings.
Depending on how much you need to allocate to those items, that gives you anywhere from 10% - 20% of your monthly income for fun.
And can I just say, spending 10% of your income on things you love sounds like something that will be much easier than saving 10% of your income for retirement? (You should do that too, I’m just saying one of them will be easier.)
How Can You Stick to Your Fun Budget?
It’s one thing to allocate $200 to fun…and an entirely different matter to stop spending once you’ve hit that $200 mark.
That’s the real trick. When you’re staring down an invite to go out with friends you haven’t seen in awhile, and you’re rocking a $190 total in your fun budget so far.
Luckily, there are multiple ways you can force yourself to stay honest with your fun budget.
The best part?
You’re free to choose the one that sounds most workable to you.
Option #1. Track Your Spending
Use an App
Thanks to technology, keeping tabs on where your money goes has never been easier. You can sign up for an app like Mint, connect your bank accounts and be ready to start tracking your spending in under five minutes.
To make the app-based approach work, make sure to go in and set a specific budget for “fun.” If you’re using Mint, you’ll need to check in every few days to make sure the right purchases are being added to that category, since it might not clue in that the chocolate bar you bought at the drugstore was “fun,” not “pharmacy.” I speak from experience on that one.
However, once you’ve done the work to set it up, Mint will email you helpful reminders about things like “You’ve exceeded your Fun budget this month!”.
They’re not necessarily fun emails to get, but they are definitely helpful.
Use a Spreadsheet
If you’d rather be hands-on with your money, for reasons ranging from “I don’t trust apps” to “It’ll keep me more accountable,” - tracking your spending in a spreadsheet is also a stellar option to stay on track with your budget.
Basically, all you have to do is set up a spreadsheet with a place to put in:
- what you bought,
- how much you spent, and
- any notes you have about the purchase.
Then, use a simple ‘sum’ function to add up all of your spending, and keep tabs on it yourself.
If you’re going to use this approach, make sure to get in the habit of buying things on one or two cards to keep tabs on the total amounts. Grab a receipt for any spending that you do using cash.
Trust me, you think you’re going to remember the exact total you spent earlier today, but you won’t...Get the receipt.
Use Pen and Paper
Last but not least, writing all of your purchases down by hand is another stellar way to keep yourself honest - and stick to your fun budget at the same time.
You can opt to carry around a little notebook and pencil. Or write everything down at the end of the day. But if you choose this tracking method, make sure to add things up periodically.
I’m just saying, $16.71 + $19.20 + $26.20 + $8.69 + $31.03 doesn’t seem all that bad. Because they’re all smaller purchases. However, when you add them up, they ring in at $101.83!
If your fun budget is $100 even, you’re in the danger zone, my friend.
Option #2. Cash Envelope
Since we’re on the subject of retro ways to stay on budget, an envelope full of cash is a safe, easy bet to keep you on track with your fun budget.
All you have to do is withdraw the amount of money you want to spend on fun stuff over the next week, or pay period, or month, and then only buy things using cash.
When you’re out of cash, that’s it for your fun budget.
There are also apps to help you take this kind of approach to budgeting. Apps like Mvelopes were built to modernize the cash budgeting system, because cash is, quite frankly, kind of a hassle.
You could also do something like a prepaid credit card, that you load every month or every few weeks, and only use on fun stuff. When the balance is gone, you’re done spending on fun for the month, and you don’t have to touch any change the entire time.
How Can You Have the Most Fun?
Listen, it’s not the size of your budget that determines how much fun you have. That’s all up to you.
So while you’re out there setting a fun budget, and implementing it, make sure to pay attention to how much fun you’re actually having.
One of the best questions anyone ever asked me in this context was:
“What was your favourite purchase last week?”
Framing your money that way - in terms of what you really enjoyed spending, and would spend on again in a heartbeat - is a great way to check in on which spending you enjoyed the most. It’s also an amazingly positive way of looking at this whole budgeting thing…
And isn’t that what a fun budget is all about? (Well, that and being able to afford to go to the pub guilt-free.)