You probably have a whole lot to budget for when your monthly paycheck lands. From household bills to ongoing subscriptions and general life expenses, it all adds up. But, you know what you might forget to include on that list? Fun!
Sure, it may seem frivolous, but ‘fun’ money is what makes the world go round. This is what’s going to make all of those hours of working feel worthwhile, keeping you on a happy, even keel for as long as your funds last.
But what is fun money, and how exactly can you start making sure that you’ve got enough of it? Keep on reading to find out.
What Exactly is Fun Money?
Just like how you set aside emergency funds each month, fun money is a dedicated part of your budget that you should set aside for leisurely activities. If it helps you to make sense of this, you could even consider your fun fund as a kind of adult pocket money that you’re giving to yourself.
You should save towards your fun fund at the start of the month, and then make sure that you’re sticking within that budget for a wide range of leisurely activities, which we’ll discuss a little later. Some people may choose to roll over their fun money to the next month if they don’t spend it all, or you could simply put that money back into the household pot if you have any left over by a certain date.
What is Fun Money For?
As the name suggests, fun money is essential money that you spend on having fun. Outside of other financial commitments like food and household costs, your fun fund should go towards activities that might include –
- Eating out
- Manicures
- Personal purchases
- Private subscriptions (e.g., magazines, etc.)
- Etc.
How Much Fun Money is Allowed?
The next crucial question is, of course, how much money you should aim to put into your fun fund each month. This can be a tricky thing to get right, as it varies widely between each person, but experts generally recommend setting aside between 10%-30% of your monthly income for this purpose. You may also find that it’s useful to approach with a trial-and-error mentality to ensure you settle on an amount that allows you to do the things you want, without pushing your budget too far elsewhere.
Another important point to bear in mind is that your fun budget should be lower if you’re also paying off preexisting debts. Take your full financial picture into mind, and then be realistic about how much you can dedicate to fun pursuits each month. Ideally, you’ll want to start small to avoid overspending, and then build that budget accordingly.
Where Should Your Fun Fund Come From?
So far, we’ve spoken as though you’ll use your paycheck to secure your fun fund, and this is certainly the most common option. Setting aside money directly from your primary income can help to keep your finances straight and is the only option for the vast majority of people. However, if you struggle to justify a dedicated fun fund from your main income, then you may also want to diversify where this money comes from.
Seeking a side hustle, such as selling unwanted items online, can be a great example of this, as you can then put that money directly into your personal account. Trading can be another fantastic option, as it allows you to use a small amount of your regular income to invest in trades like cryptocurrency, which you can then sell to ensure a sizable return that you simply dip into monthly. You could even have fun with options like crypto gaming, which, as well as being a leisurely activity in itself, can increase your chances of regular returns that you can sell and set aside for yet more fun straight away.
Perhaps the main problem with these alternatives is that they won’t give you a reliable amount each month, but you may also end up with far more spending money to enjoy. Either way, knowing where your fun fund will come from and setting that money aside at the start of the month is key.
Why Is Fun Money Important?
It’s easy to assume that fun money should be the last thing on your financial checklist. Up until now, you might even have been in the habit of simply using whatever money you have left for this purpose. Why should you change that and start budgeting now? In truth, there are a few different reasons, including –
- Smoother budgeting: How many times have you blown your household budget on last-minute leisure activities that you couldn’t say no to? The simple reality is that you’re human, and personal spending is inevitable. When you budget for that fact, you make it easier to keep spending on track in all other areas.
- Financial harmony: Financial arguments between couples are common, and they most often come back to personal spending. Without a set budget in mind, it’s easy to resent a partner for their personal expenses, or to find yourself short on crucial expenses your partner might not have been aware of. By budgeting individual personal spending money, you ensure more harmonious, equally shared finances.
- Better quality of life: If you’re simply working to pile money into your household, then it’s easy to become disillusioned and unhappy. Setting aside even a small personal spending budget can help you to overcome that, and ensures that you enjoy a far better quality of life than you might if you simply overlooked this budgeting essential.
Takeaway
Fun money might sound frivolous, but you can transform your finances when you finally make it a priority. Simple work out how much you can set aside each month, what you most want to spend it on, and where exactly your fun fund should come from. Then sit back, buy those luxury items at last, and rest easy in the knowledge that you’re handling all elements of your finances like a pro.
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