I was reading the May edition of Money Magazine, and one of the articles had an interesting idea regarding budget planning really caught my eye. One of the advices given was to set a budget for impulse buys, or what I’m calling the fun expense. For example, if I budget $250 dollars for this fun expense, I can use it for whatever I wish. I can use the $250 dollars on junk food, coffee, that new tie, dress, or whatever I wish to use it on.
With this fun expense already in my plans, you can feel happy because you get to have fun, while being responsible. They key of course is to set a strict dollar amount, and never go over it.
What I would change of this approach is a dynamic approach to this. Most of the time, I will still try my hardest not to spend money on these expenses. However, when I feel unmotivated, as I was when I wrote this entry, I would use this approach for a couple of months to right the ship.
I believe that doing this will give me the added motivation for the long run. As we always say – Financial freedom for the average folks is achieved slowly through time. With patience, and with discipline, everyone can become financially independent.
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{ 4 comments… read them below or add one }
Love your blog — I found it through J.D.’s Get Rich Slowly…
Great idea you have here. I do this too – budget for fun and goof-off money. Frankly, if I were single, I could probably get away with less “fun” money for the household, but it’s very important to my girlfriend that we have money for Starbucks and the occasional inexpensive dinner out.
So I learned a long time ago to just put that money in the budget, rather than be surprised. It’s a little less going toward debt reduction, but a LOT toward peace and happiness in the household — so on balance, it’s worth it
Thank you for the encouragement. I will keep on trying to write good content. Do come back often and let your friends know about this site
I agree that it is definitely worth it. It helps me “not-get-burnt-out” trying to save every penny! It’s great to hear that you are practicing this and that it is working out great for you!
This is a great idea! My mother has begged me for years to get on a budget but I resisted, thinking it will be too restrictive and make spending not fun or impulsive at times…not true. You have to budget for the type of person YOU are, if it’s important to you to have an amount to “blow” on whatever, budget that in! Keep a list of fixed expenses (mortgage, insurance, etc.) and variable. For Variable like food and clothing, make sure you put in extra for what you really love and know you are going to give into anyways..you might as well budget for it! Just be sure to stick to the plan, don’t over spend and if you find that item(s) that you can’t resist and is “out of the budget”, try to save the money from other variable items, a little from here, one less latte there! And always put in a place for savings and vacation – future plannings!
Budget is the way to go! I always say if you can nickel and dime your way into dept, you can nickel and dime your way OUT of dept. It is so important to keep track of your spending no matter how much money you have or make! Without a budget so much money disappears that you have no idea where it went or how quickly it went. Make a budget and write down EVERY expense and what you want to spend and save for and you will find you are richer than you think!