Monthly budgeting might not seem like the most thrilling subject. But saving can be a lot of fun—especially when you make it a priority to set aside “fun money” in your monthly budget.
Creating a budget for fun expenses is just as important as setting aside money in a rainy-day fund. Wondering how much you should put towards dining out and other splurges? A good starting point is about 5 to 10 percent of your monthly income.
Here are a few reasons to start building up your budget for fun and relaxation.
1. You’ll know what’s within reach when you make your weekend plans.
By putting aside a pre-determined amount of “fun money” each month, you’ll be able to prioritize your recreational activities with a clear view of your overall budget. Think about the cost of common outings, like going to the movies, concerts or sporting events; when you know your monthly budget, it’s easy to map out how many activities you can plan in a month.
2. You’ll know which activities require more strategic saving.
Hoping to splurge on the trip of a lifetime? You can start allocating a portion of your monthly fun budget to save up for a big trip or major purchase in the future. Since you’ll have a well-defined budget, you can easily calculate how long it will take you to earn enough for a large purchase. Budgeting makes it easier to create a plan and reach your goals.
3. You’ll stay motivated to maintain good financial habits.
Financial health isn’t just about growing your savings account or paying down debt. It’s also about giving yourself the freedom to enjoy life to the fullest, without stressing over how your favorite activities will fit into your budget.
By planning fun expenses as part of your monthly budget, you’ll stay on track with the rest of your financial goals. Even better: You’ll be certain that you’re continuing to prioritize your own happiness by maximizing your budget to make room for your favorite hobbies and activities.