Budgeting doesn’t have to be all work and no play. The concept of ‘fun money’ introduces the necessary flexibility into strict financial planning. By designating a certain amount each month for personal pleasures, you can indulge guilt-free while still adhering to a budget. It’s a win-win – maintaining financial responsibility while also enjoying the little pleasures life has to offer.
What is Fun Money?
Recess for Your Wallet: Remember how recess recharged us during our school days? ‘Fun money’ is the financial equivalent of that – an allocated amount meant purely for indulgence. Without this reprieve, budgeting becomes a monotonous chore, akin to the tedium of middle school without breaks.
The Importance of Fun Money: By avoiding any expenditure on leisure or entertainment, there’s a risk of splurging and later feeling guilt-ridden, as was the case with Zach’s $90 purchase at Home Depot. A strict budget without any room for fun can lead to pent-up desires and eventual impulsive spending.
Why You Should Prioritize Fun Money:
- Fosters Financial Responsibility: Assigning a specific amount for leisure ensures you have control over your finances. Spending within this budgeted ‘fun’ limit becomes a responsible and guilt-free act.
- Marital Harmony: For couples, allocating separate fun money for each partner eliminates arguments over individual expenditures. For instance, while Katie might spend on shoes, Zach could indulge his love for tools. It’s the money both are entitled to spend as they wish, free of judgment from the other.
- Encourages Savings: If your fun purchase exceeds your allocated amount, it promotes the virtue of patience. By saving up over a few months, you can eventually buy the desired item without straining your budget.
- Reaping Long-Term Benefits: Consistently setting aside and sometimes saving fun money can lead to significant purchases over the years. For Zach, it’s the potential to continuously upgrade his woodshop over the years, all thanks to the disciplined setting aside of $150 each month.