Learning To Manage Money Effectively? Here’s How to Put Fun in Your Budget

A group of people having fun at a dinner inside someone's home.

Learning to manage money effectively can be a challenge—especially you have big financial goals. While budgeting in money for fun feels like the last thing you should be doing, you’re much more likely to stick to your plan and meet your goals if you plan for a nice night out or a fun spring break vacation.

Managing money sustainably

Personal budgeting is a lot like being on a diet. If your diet restricts you from sweets completely, you end up craving those sweets more and become susceptible to falling off the wagon. But, if your diet allows you to eat sweets in moderation, you’re less likely to feel deprived and more likely to continue your dieting for the long term.

The same can be said of managing your personal finances. If you limit yourself to only the necessities in your budget, you’re likely to crave the fun experiences you aren’t having and give up on your goals. But, if you build fun money into your budget, you can continue to appropriately manage your money for years to come.

Making room for fun in your personal budget

Your budget should fit your lifestyle and your goals instead of sacrificing one for another. Whether your idea of fun is a spring break vacation, going to a concert, or just having a nice dinner out, you can build it into your budget. There are many different budgeting styles that allow you to allocate money to having fun.

The 50/30/20 Budget

This method is particularly popular for budgeting, as it allows you to budget without rigid categorization. It breaks down simply: 50% of your monthly income is set aside for needs, 30% for wants, and 20% for savings and debt. Your needs include things like groceries, your rent or mortgage, utilities, etc.

The wants category will be your fun money and will include eating out, new clothing, subscription services, vacations, and anything else that you don’t strictly need.

Zero-based Budget

Zero-based budgeting allocates every dollar you earn to a specific expense. You’ll use all your monthly income with this method, but you won’t necessarily spend every dollar. A zero-based budget ideally has dollars allocated to saving or debt goals and sets aside money to spend guilt-free on fun every month.

Pay Yourself First Budget

The pay yourself first method of budgeting is as close to set-it-and-forget-it as a personal budget can get. With this method, contributions to debt or savings goals are automatically or manually taken from your paycheck first. Then you’ll pay for necessities like rent, utilities, etc. After those two deductions are made, you’re free to spend the rest of your monthly income guilt-free!

Budget-friendly fun

Want to have more fun with less of your budget? There are plenty of low- or no-cost options for fun experiences:

  • Host a movie night with some of your closest friends.
  • Go to a community concert in the park.
  • Host a hobby night.
  • Bring a picnic to the park.
  • Plan a game night.
  • Get involved with local clubs or organizations.
  • Take up hiking, biking, or other nature-related activities.

Incorporating activities like these can help make you feel like your fun money goes farther through the month. You’ll get more memorable experiences while you continue to meet your financial goals.

Want to learn more about how to manage your money effectively? Take advantage of the many different free Financial Education resources that can help you Live Greater.