Managing your budget is an important part of living the lifestyle that you want. We all have a certain amount of cash coming into our homes and going out each month. The amount we earn, combined with the amount we owe on essential bills, helps to identify our budget. Living within your means can save you from a significant amount of stress and heartache.
Budgeting also means that you’re more likely to reach your financial goals for things like savings and big purchases. When you budget, you can cut down on the expenses that you don’t really want or need to deal with and focus on your future. The question is, what role should fun and entertainment play in your monthly budget? Should you really be making room for these things?
You Do Need to Budget for Fun
One of the first things that anyone should recognize when they’re building an effective budget, is that there’s always a need to budget for at least some fun. When times are tough and you’re struggling to make ends meet, you may need to cut down on your fun budget. However, if you’re consistently at a point where you’re struggling to find any money to spend on the things you want, this is a clear sign that it’s time to change your lifestyle.
You shouldn’t be completely out of cash as soon as you’ve finished paying your bills. If you are, then you may need to look for a different job, adjust your budget, or look for ways to cut your monthly costs. For instance, you could refinance your student loan and existing loans into a new loan with a private lender. Using a refinancing calculator will give you an insight into how much you could reduce your bills by. Just taking a small step like this could mean big savings. Budgeting for fun ensures that you can actually enjoy your life and look after your mental well-being, rather than just paying for the things you need.
How Much Should You Spend on Fun?
The toughest part of budgeting for entertainment for most people will be figuring out how much they can afford to spend. The best option is to look at your budget, and consider your incoming cash. How much of that money needs to go towards essential bills, like your mortgage, rent and utilities? Once you’ve finished paying for all the things you can’t compromise on, you can begin to consider more luxury expenses, like bonus meals with friends and days on the town.
Ideally, you should be putting a small amount of cash in your savings and emergency fund before you start focusing on fun. But make sure that you keep enough cash aside to give you at least something fun to look forward to every week. You don’t have to spend a small fortune every seven days, but you should be able to treat yourself, or your budget will be destined to fail. Don’t underestimate the power of a bit of fun.