How many of us really have a budget? Most of us have a general idea of where our paycheck needs to go every month. Expenses like rent, utilities, phone bills, insurance, etc. are annoyingly loyal, showing up right on time. But do you budget out the rest of your money? Or does your retail/eating out-therapy differ from month to month? Budgets are an important part of handling money responsibly and tracking spending. But don’t forget to include leisure in your spending. Bold TV hosts David Grasso and Julia Sun discuss why having a fun budget is essential to overall success.
Fun budget: Treat yo’self
Life’s all about balance. It’s dangerous to spend too much money on serotonin-inducing but unnecessary things like Starbucks. But if you pinch pennies too much, your mental health could suffer. The stress and pressure will eventually overwhelm you. Incorporate things that *spark joy* into your spending. Had a bad week and want to buy a latte and crepe from your favorite coffee shop? Go for it. Had a rough year and need an exotic vacation over the holidays? Treat yourself. But remember to think of this as “permission to spend.” At the first of the month, give yourself permission to spend $10 on coffee. This eliminates the guilt you would otherwise feel when making impulsive money decisions in the moment.
Whatever our financial skills, we’re all human, and sometimes we take things to the extreme. So don’t treat yourself so much that you end up in debt, broke or both. How do you find the right balance? Enter the 50/30/20 budget. First, portion out 50% of your pay. That amount goes to fixed expenses like rent and things you absolutely need. Then, use 20% for paying loans and savings. Finally, that other 30% can be used for wants and flexible expenses, your fun budget. Check out this budget calculator to find your 50/30/20 sweet spot.
For more on budgeting, check this out.