In today’s hustle culture, working long hours and continuously grinding it out has become the norm. Some people work nights, weekends, or cram side hustles into an already busy schedule so they can try and get ahead. But oftentimes, they get so caught up chasing the next big thing that they forget to enjoy themselves and spend some fun money along the way!
Similarly, there’s a segment of the population who are so frugal with money that they deny themselves joy. For one reason or another, they would rather skimp on every type of expense imaginable, rather than spending money and having fun!
But, what’s the point of building independent wealth if you don’t take the time to enjoy it? Without breaks to de-stress, you’ll begin to lose focus, feel drained, and may even burn out completely!
While saving money and making progress towards goals is satisfying, there does come a point when it becomes extreme and unhealthy. To make sure you enjoy the wealth creation process and that your journey is sustainable, fun money needs to be a part of your budget!
When starting down the path to financial freedom, most people get excited by the prospects and opportunities that lie ahead. In their excitement, they set lofty financial goals that require they live on a tight budget. After a few months, life begins to feel dull and bland. In response, they’ll likely go out on an emotional spending spree or give up on their dreams completely!
In addition, Americans spend the majority of their lives in the accumulation phase. During this time, they’ll work tirelessly to overcome challenges and satisfy their employers which cuts into their family time and ability to make memories.
Regardless of your net worth, life should be exciting and enjoyable. Otherwise, you’ll miss out on many of the incredible things that money can’t buy. To ensure you don’t, fun money needs to be included in your monthly expenses!
Fun money is an allotment of cash that requires you to enjoy the fruits of your labor. With it, you’re giving yourself permission to spend on the material goods, experiences, and anything else for that matter, that brings you joy!
Typically, fun money is geared towards your wants and non-essential items, rather than your needs. By spending on these things that add value and contribute to your overall quality of life, you’re making the road to your goals sustainable and also more enjoyable!
However, it’s important to realize that your idea of fun is probably much different from other people’s. You may enjoy treating yourself to a nice dinner or shopping for the latest trends while others may view them as a complete waste of money!
Having said that, no one can tell you how you should spend your fun money. It’s up to you and the only requirements are that it brings you joy and makes you happy!
Still, like all budget categories, your fun money needs to be kept in check as well. With limits, you won’t splurge to the point you’re unable to put money aside. Instead, you’ll have money to enjoy life now while also working towards a brighter financial future!
In addition, fun money can act as a small reward and psychological boost on your journey to create wealth. For instance, imagine your goal is to contribute $6,000 to your Roth IRA this year. To do that, you might want to reward yourself with a small dose of fun each time you contribute $500. In doing so, you’ll not only break your goal down into smaller more manageable chunks, but the reward will also help to build and reinforce the habit!
If you’re like most people, adding one more line item to a budget that’s already bursting at the seams is difficult. Not only that, but it may even increase your burn rate. Regardless, it’s necessary to reward yourself and enjoy life while you’re making progress, especially since your time on Earth is unpredictable and finite!
Having fun money will remind you that your budget isn’t as restrictive as you think or that it’s all work and no play. Instead, you’re encouraged to splurge and enjoy the moment!
Also, small spending treats will increase the odds that you’ll stick to your budget and not overspend. As a result, you’ll have more money to save and allocate towards your investments!
For example, imagine you’re struggling to make ends meet and don’t have any room for fun money. As the feelings of deprivation grow and the pressure to pay bills mounts, you wouldn’t have an outlet or a coping mechanism. Instead of being on budget, you’d likely buy on impulse and go overboard which would burst your budget altogether!
Just like living beyond your means is detrimental to your long-term success, living too far below them can be, too. At first, it may seem like you’re making giant leaps forward with a higher savings ratio. But in the long run, the feelings of self-denial can cause you to overspend which may even unwind years of progress, too!
Adding fun money to your budget is also a good way to boost your morale. With it, you’ll enjoy the process which in turn helps you stay the course. But without it, you’ll likely fall off the wagon and revert to your old ways!
Also, budgeting for fun is an important part of your family’s finances. Not only can it help prevent arguments about money, but it can also be used to create memories. In addition, you may want to give each family member a certain amount or decide collectively how it gets spent.
In the end, if you stick to a budget that has fun money, you’ll live a more enjoyable and balanced life. Instead of spending all your time hustling and grinding, you’ll take breaks and cultivate joy along the way!
Just like savings, fun money needs to be a priority in your budget. By making it one, you’ll have enough money to live it up every month!
After budgeting for your needs and savings, your focus should shift to fun. Start by allotting at least 5% of your net income to fun money. To hit this number, you may need to trim some of your recurring costs or take additional steps to increase your income.
While spending your fun money is important, you may also want to consider saving a portion of it. By doing so, you can buy a frivolous big-ticket item which may end up being a better use of your money!
No matter what you choose to do, budgeting for and spending fun money will improve your quality of life. On top of that, some budget-friendly activities can help you stretch it even further!
Whether you realize it or not, fun money is often the difference between a spending plan that works and one that fails. By including it in your budget, you won’t just be setting yourself up to enjoy life, you’ll also be increasing your odds of achieving financial success!
What’s your favorite way to spend fun money? Comment below.
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