You know what they say: all work and no play makes you a dull person. And with so many of us working way too much, finding time to relax and have fun can be hard. And even when we do, we often feel guilty about spending money.
So what’s the answer? How can we make sure we have fun and enjoy life without being stressed about spending? By starting a fun fund! Also known as ‘mad money,’ this is savings set aside for non-essential, frivolous but still important expenses.
When you budget for fun and save money specifically for those costs, you’re giving yourself permission to splurge responsibly.
Several savings strategies can help you build your fun fund. Here are some steps to get started.
1. Figure out what you can spare each paycheck or each month.
Take a look at your regular spending patterns. See which expenses are essential (things like rent or mortgage, groceries, utilities) and allocate the necessary money to those. An app like Brigit can help you see your spending patterns by category, so it’s easy to see where your money’s going. After those expenses, take a look at what you have left over.
2. Make sure you still have extra money for emergencies
To really enjoy your fun fund, it’s best to make sure you have a safety net in case of any unexpected costs. That way, you won’t feel guilty about enjoying some well-earned fun and relaxation. Starting an emergency fund, if you don’t already have one, is a great way to be prepared for anything. (That’s some next-level adulting!)
3. Take a look at your discretionary spending
Your discretionary spending is the stuff you don’t need to survive or to meet your basic day-to-day needs. Sometimes it’s a substantial amount of money that you’re spending on nothing in particular, without even thinking about it. This can be things like your daily Starbucks latte or streaming subscriptions. Take a look at these costs; there are probably some that you can cut back on without even noticing it.
For example, do you really need all the streaming channels you’re paying for? Are there one or two you aren’t actively using that you can cancel and then resubscribe the next time they have a show you really want to watch?
4. Set goals to budget for fun
This step is totally optional, because you shouldn’t have to have rules about how you decide to spend the extra money you’re very responsibly setting aside. But for some people, thinking about things you want to buy or a vacation you want to go on can be part of the fun.
Setting goals can also make it easier to budget for fun and stick to the plan. When you have an idea of the costs of things you want to save for, it can help motivate you to save more and build up your fun fund faster.
5. Find the best way to budget for fun
When you budget for fun, it’s important to find a way to literally set money aside. If it’s mixed in with the rest of your money, it can be hard to keep track of it. Creating a special savings account, with flexibility and no fees, can be a great way to do it. Or, if you like to do things a little more old school, you can actually stack your cash somewhere safe at home.
