Yes, its important to budget for fun. If you take your life and your budget too seriously, it will all fall apart. Think of it like the last diet that went miserably for you… Or, maybe it’s just me, I start these fantastic diets that I know will cause me to lose 20 lbs in two weeks. How often does it last? And if I make it through the miserable two weeks, how often have I lost the 20 lbs? Both scenarios are bleak and completely unmotivating. I think that’s how many of us have become lost when it comes to budgeting. Setting ourselves up with unrealistic expectations, with a diet that consists of taking away everything that brings joy, with the expectation of happiness in the end. It’s all a bit twisted.
I think of budgeting in buckets. There is the “Need to Have” bucket and the “Want to Have” bucket. The size of the buckets should be based on your priorities. Which, I think it is extremely important to remember, is based you YOUR priorities. If having an active social life is important to you, it is imperative that you budget for that. Otherwise, your budget will not align with your personality and you will be setting yourself up for failure. That being said, the buckets are give and take. If you choose to spend more money on entertainment, you will naturally have less money for other areas. The important thing to remember(I realize I’m taking about a lot of important things here, but hang with me) is that with a budget, you are telling your money (your tool) how it is going to be spent (no surprises at the end of the month.)
To get started…
-Determine your total income for the month
-Determine how much of your income goes to the “Need to Have” bucket. This includes housing, basic food needs, required bills, etc.
-Determine how much of your income goes to the “Want to Have” bucket. This includes entertainment, shopping, dining out, etc. I always recommend having a “Want to Have” bucket. Even if you don’t spend it all, at the end of the month you can shift the money towards savings, but you don’t feel deprived and had the funds available to you.
-Remember, your budget may look different each month. I’ve mentioned before that my spending shifts during the summer as I spend more on entertainment. That’s an example of a personal priority I have.
To conclude… Budgets do not need to be restrictive, they are meant to guide you so that you are able to reach your goals (or help you get your current spending in check, so you can reach those goals.) I’m trying to make this simple, so that you don’t give up before you start. It’s worth it in the end, to create personal wealth and freedom. It’s the bumpy path I’m on and I’m so thankful you are joining me.