Today’s post is from guest contributor David Timm. David is a writer and editor living in Omaha, Nebraska. He lives with his partner, dog, two cats, and eleven fish. We thank David for this post.
If you find yourself struggling to have fun with your paycheck while still covering the essentials, you’re not alone. As much as 59 percent of all adults in the United States are living a paycheck-to-paycheck lifestyle.
This feeling is frustrating, and it can cause unneeded stress and anxiety in your daily life. However, it’s important to remember that creating a fun money budget can work with all levels of pay. By putting away a certain amount of money every month, you can keep your spending under control and use that money for guilt-free pleasure spending.
But where do you even begin? In this guide, we’ll teach you all about fun money, the benefits of fun money, and the different budgeting strategies you can employ for budgeting fun money.
What is Fun Money?
Fun money is exactly that—money that you spend for pleasure. The money that you set aside every month can be used on guilt-free experiences you want but don’t necessarily need.
Examples of fun money expenditures include going out to dinner, buying new decor for your home, attending a concert, or anything else that sparks joy. You can even save up fun money throughout a few months and spend it on a larger purchase, like a kayak or plane ticket.
Benefits of Fun Money
Fun money isn’t just a fleeting pleasure. It actually can help benefit and maintain your mental health when you’re paying off debt. Don’t punish yourself every time you grab a coffee in the morning. It’s important to let yourself spend money on small things you enjoy.
Fun money budgeting will help you live your life instead of limiting it. By creating a set budget for every paycheck to go to your fun money bank, you can prevent overspending and feeling guilty about the pleasures of your life. This will reduce your financial guilt in the long run, which will benefit your mental health.
When you suffer from financial anxiety, it can be hard to enjoy the small pleasures of your life and can create a scarcity mindset. This is when you focus on what you don’t have instead of being grateful for what you do have.
How To Budget Fun Money
When it comes to budgeting money that you will set aside for fun things to do, different strategies work for different people. It’s important to remember to meet all your basic needs before you start budgeting fun money. Here are some strategies to get you started.
Zero-Based Budgeting
Create a detailed report of all your expenses to have an exact idea of your monthly budget moving forward. Predetermine where each dollar will go ahead of time. Although this may seem like a high-effort budgeting idea, in the long run, it will give you a better understanding of your finances.
50/30/20 Budgeting
As you go over your paychecks, ration out the money into different categories. The 50/32/20 method sends 50 percent of your paycheck to the essentials, 30 percent of your paycheck to your wants, and the final 20 percent of your paycheck to savings.
Pay Yourself First
In this budgeting method, you take care of all your essential needs as soon as you get paid. This ensures that you can spend the rest of your paycheck freely. Use this method in the following steps:
Receive your paycheck
Pay for your necessities (groceries, gas, bills)
Pay debts
Contribute to your savings
Spend the remaining money on fun
If you find yourself feeling stressed at the end of the month, spend some fun money first, and then continue down the list. Just make sure that you are in control and don’t splurge.
Now that you know about fun money, its importance to your mental health, and different methods of budgeting, you can become free from financial anxiety. It’s time to take the “guilt” out of “guilty pleasure.”