Can Fun Money Fit into a Smart Investing Plan?


Everyone knows that investing is an essential part of planning for the future. It’s great to be able to go out and spend money on a whim. But if you do that all the time you won’t be well equipped to cope with life’s financial emergencies when they arise.

But is investing all there is to life? Budgeting and preparing for the future are all very well, but they’re not a lot of fun if that is all you do. This is why it makes sense to build your budget carefully and to allow a bit of breathing room to have some fun.

How can you tell when a budget is successful?

In my opinion, it’s when you can stick to it quite easily, pay off any debts you have, save for the future and STILL have some fun. There are other elements to successful budgeting of course, such as being able to reduce some of the regular payments you have for various things simply by shopping around.

But here we are focusing on the idea of keeping some cash back just to enjoy on a daily basis. If you don’t do this, if you don’t keep some ‘fun money’ back for your own enjoyment, you could find it a lot harder to stick to your budget for the long term. And that in turn could lead you to blow it.

How hard do you have to work at saving money?

Depending on your savings goals and how much you are bringing in, it stands to reason that you have some control over how hard you are working to make those all important savings. So by the same token you should think about building in some fun money as well.

It doesn’t have to be a lot of money – in fact it shouldn’t be too much otherwise it defeats the purpose of budgeting in the first place. But be sure to set aside a few dollars every week – maybe $20 for example – to spend on whatever you like. This shouldn’t be for clothing items or anything else that is essential, even if only from time to time. Instead it should be for frivolous things. Say for example you usually take a coffee to work with you in a special insulated mug you’ve got at home. Maybe you could use your $20 allowance to treat yourself to a special coffee from the local coffee shop as a treat, perhaps every Friday morning to kick start the weekend. I’m sure you can think of other options and ideas for being frivolous.

The point is you don’t need to spend a lot to give yourself a treat in this way. It means you can stick to your budget, allocate plenty of money for your investments and still get a treat every now and then. So when you construct your budget, make sure you don’t forget the here and now as well as the future.

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