The Money Mustache Community
Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: lifejoy on March 14, 2016, 06:05:33 AM
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DH and I are making a budget tonight. We have no debt and make around $7k per month, total.
Of course, saving 90% of our income would be cool, but our rent already makes that impossible. So let's keep it realistic. How much "fun money" do you allocate for each month?
(If it's not obvious, "fun money" is money you can blow. So when DH wants a new tv, he can save up his fun money. When I want new shoes, heyyyy fun money! It also helps for when you buy a gift for the other person - you buy it with your fun money, instead of shared money.)
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I honestly don't even do this type of budgeting anymore.
I like to look at it like this: all of my monthly reoccurring expenses amount to roughly $1500. This includes all monthly bills as well as reoccurring purchases like groceries, gas, etc. My 'budget' per month is ~$2500. I use the difference for my 'fun money', which includes golf, woodworking, other hobbies, and other out of the ordinary random purchases. I try to minimize and even budget for these categories though. I like to look at is as though I'm running a surplus of $1000 every month and i can use that money however i want.
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DH and I are making a budget tonight. We have no debt and make around $7k per month, total.
Of course, saving 90% of our income would be cool, but our rent already makes that impossible. So let's keep it realistic. How much "fun money" do you allocate for each month?
(If it's not obvious, "fun money" is money you can blow. So when DH wants a new tv, he can save up his fun money. When I want new shoes, heyyyy fun money! It also helps for when you buy a gift for the other person - you but it with your fun money, instead of shared money.)
Ours is two $100 amounts a year (Once at Christmas and once at our Bday) and $10 a month. So $320 a year or about $25 a month. We use this for work lunches out/coffee/ new clothes. If I bought a new TV (Or anything that we would both use) it wouldn't come out of that money. It is more for things that only benefits one of us.
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We don't budget this way. If we need something, we will discuss it and get it. "I really want this" is something that we consider valid, and after careful consideration, we will get it if it's reasonable. I'm uncomfortable with the idea of "blow" money, because it simultaneously feels TOO restrictive (I only get WHAT?) and not restrictive enough (what, I spend this simply because it's "extra"? That doesn't make sense!). That being said, that is why WE don't do fun money. I absolutely understand why other people do. Particualrly if a couple tends to not be in agreement about each other's purchases, I can absolutely see the merit. DH and I just happen to agree with stupidly high levels of consistency.
Tl;dr: we don't budget that way, but I understand why some people do.
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$100 per month for spending (includes unbudgeted-for small expenses for me and DS).
Often it gets spent on things like bday presents, take out, new clothes, make up and toiletries, weekend events, eating out, school excursions, general bits and pieces. A lot of it is more discretionary than pure spending,
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budgeting to blow money makes little sense IMO.
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My initial reaction: all my money is fun money.
We don't really budget this way at all......although I am also far from the most impressive Mustachian, and this is one of the reasons why!
I have Mint set up so that regular, unvaried expenses are pulled out as "budgets": Internet, cell phone bill, mortgage, our monthly charitable donations. (Currently I also have "new stuff" listed here, because we are trying to keep this under $200/month, to align our spending more with our values - but I'm not really sure this approach is working for us. I'm already fudging the numbers, and worse, used this last month to justify buying some clothes I didn't really need because I had "money left"....this is the problem with budgeting by category, to me.)
Everything else goes into an "everything else" category, which I try to keep under $2,000/month. The mint homepage tracks this category by date, so I just try to stay under the line, or when we are spending above the 2K pace, we start pulling back on spending. Currently for this month we have spent $757, and we have a nice little gap of where we are "allowed" to be by today, March 14th.
I like the flexibility here, because I'm free to move money around different categories. I can splurge on a gift for DH, but then make up for it by being extra-frugal with the groceries.
A more genuine mustachian might follow a similar system, but with much smaller spending limits! $2,000 a month not including the mortgage is crazy, but we are happy with it right now. The only real issue is it doesn't allow for large purchases that we can't offset by being frugal elsewhere (we do have to eat), but I suppose you could include this if you wanted, rolling over any unspent money from month to month. I'm just not that disciplined with budgeting.
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I have a category (with YNAB) called "Spending Money" which I save 100$ per month. It doesn't mean each month I spend 100$, but when I get the urge to buy something I want, with the money rolled-over, I can buy it without feeling guilty. The rest of my money goes towards my regular expenses + RDF + Investments.
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My initial reaction: all my money is fun money.
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This summed up my rambling post very well. After all the bills are paid and there is food in the fridge and gas in the car...it is all fun money. Some months i spend a lot of it and other months i save a lot of it.
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My entertainment budget is $250/month.
I don't really have a hard ceiling. Money is meant to be enjoyed, as long as I am maintaining a 75% savings rate I will spend more money if it aligns with my values.
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We used to budget that way, and used 100$ per month, per person. (In practice: 25-30$ on books, apps, whatever, and then the extra amount to 'save up' for ipad replacements and the like).
Now, we just use a straightforward 25$ per month for 'little' things (I want a kindle book, he wants an ipad app, whatever - asking permission to spend 3$ is guaranteed resentment, in our house). And then we, collectively, agree on what we consider household 'necessities' (we each have a tablet, a phone, and we share a desktop. Any of those breaking or needing to be replaced qualifies as a necessity, and gets done, ASAP. Anything else, we agree on whether we need it, based on reasons, and 'I want it' does not count as a reason.)
This works for us because we have similar concepts for what we 'need', and don't like spending money on things we're not going to use, so arguing for use works for us (and usually our spouse will find a way to get around the perceived need, or a way to fill it for cheaper, thus saving money). That said, if your spouse sees a need for a large TV and you see a need for savings, that maybe doesn't match up, and a different style of money-handling would be better for you.
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I have a fairly relaxed approach to budgeting. I have fixed living costs (rent, groceries, bills) which take up 37%, a fixed amount for savings (40%) and the remaining money is fair game for anything I need that month (travel, entertainment, replacement bike parts, gifts, etc). At the end of the month any unspent money in this pot gets split between savings and an 'other' pot, the latter being used for any larger one-off expenses (most recently a holiday abroad, next one will probably be a replacement phone when my current one dies).
Most months I'll have some money left over, but I like having that cushion there so I don't have to worry too much about if I've got enough in the bank to cover an expense.
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I don't budget like this. (We really don't 'budget' at all, so much as hold to "don't buy stuff you don't need". It's always worked just fine.)
If I want something, I think about whether I can afford it, whether it is something that I want enough that I will still want it in a few months time, and a few years time. If it is, I buy it.
I don't like setting money aside with the idea that it should be spent, or even that it is available for spending. To much encouragement to find something to blow it on.
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I budget (YNAB user) and budget nothing for fun money. Not that I don't spend on fun stuff ever, but I don't set anything aside for it. Since I use YNAB I do have to make space for it if I have plans to spend any money on a "fun expense."
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We also don't really budget like this anymore. We did when we were getting out of debt so we wouldn't feel deprived, around $50-$100/month for each of us. I used to save mine and then buy more expensive things, but ultimately stopped doing that in favor of getting out of debt faster (I used my little savings account to help make the final debt payment).
We have a separate budget for gifts and also for clothes; I don't think it's fair to use fun money for clothes because not everyone finds them "fun."
It's now more of a needs vs. wants discussion each time one of us would like something. We also mutually want many of the same things, so those usually aren't a discussion, more of a "Hey, do you want to go to this concert, it's ___ per ticket," and the other person says "Absolutely!" It's one of the perks of not being in debt and living well below your means.
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We're in full-on SL repayment right now (13.9k left from 55.4k starting 11/14), so we don't have anything in our budget for hobbies or clothes or any entertainment outside our date budget. We have $60/month for dates and $60/each for fun money.
My husband saves some of his up for golf outings. I use some of mine for books or clothes or makeup. But frequently our blow money goes toward unexpected work/friend obligations ($5 for Judy's retirement party, $7 on an appetizer with water for Amy's bachelorette party) or on fast food lunches at work.
If I didn't have blow money, I'd squirrel every penny away and never enjoy it. We put about 45% of our gross income toward debt/savings each month, so $120 for unexpected hot dogs and a 6-pack to grill with friends is necessary for us to enjoy life.
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We don't budget much anymore since we optimized most of our expenses. We function off of a priority list. If all priorities are taken care of, and all necessary expenses covered in full, we don't have any set plan for what we must do with any left over money. The big caveat to this is that this only works if you are inherently frugal by nature and don't have spendy tendencies. We aren't spenders so this works for us, because neither of us is going to haul off and blow $300 in a given month on "fun" stuff. Our fun stuff tends to be eating out together at reasonable places, or buying a few simple decorations/upgrades for the house. So for example: if our budget has us maxing our 401k, and both IRAs, and putting in the desired amounts to the efund and our daughter's college fund, then we really don't care if we go out to eat once a week or splurge on a massage.
I think instead of a monetary amount, you should figure out what you enjoy the most each month (is it going out to dinner? getting your nails done?) and then budget for that one thing provided it isn't ridiculous. That way you are getting what you value most, without "allowing" yourself to spend over and above that because the budget simply says you can.
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We each get $100 cash/mo as our free spending money.
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We budget exactly like this. We've been married almost two years and this is a really good way for us to share most of our expenses buy DH can buy fast food or I can get knitting supplies and there's no big discussion.
I get $150/month and DH gets $200/month. He has a hobby that is fairly expensive but does add to our social outings (we can take what he does along to gatherings and use it as an excuse to get people together) so he gets $50 more per month. This covers all fast food when my DH could have packed a lunch, hobby supplies for our individual hobbies (gardening and house things have their own budget), clothes and haircuts other than very essentials like underwear and socks, and fitness. He and I both go in and out of fitness grooves, so we include it in fun money because making it part of the household budget, knowing us, would lead to "let's sign up for all these classes/this expensive gym/get this equipment....and then use it for only 3 months before taking 2 months off". So fitness is included for us.
It also goes towards bachelor and bachelorette parties, trips to visit friends who don't live nearby, and general fun we have individually. I'm in a book club and knitting group and some of my money goes towards the food and drink I consume while at restaurants with those groups. We find those amounts to be just high enough to do what we want in a given month and still be able to do trips to visit other people, all without needing to talk to the other person about our individual choices.
Finally, DH is the kind of guy that if you gave him $500/month he would spend all of it, so this works to really reign him in.
We also have $100/month for dates and doing things with friends, a bit of a clothes budget for those necessities, and we save 40% of take-home pay after putting a measly 2% of gross into my SIMPLE IRA. We make less than six figures bit live in a LCOL area.
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We have a fun budget that gets transferred to our high interest savings account every month. I like doing this for two reasons. First, it provides a guilt free way to spend, especially if your partner is not as frugal or into early retirement as you are or has different interests and wants to spend a bit on things you wouldn't spend on. Second, once all the bills have been paid and sinking funds transferred each month EVERYTHING ELSE goes into our investments. This makes the budgeting easier and most months we end up investing more than we budgeted for as a consequence. As for amounts, we use to have a very unmustachian $200 a month each go into our fun money accounts, but since discovering MMM I've reduced it to $50 each. We never spent nearly that much and it accumulated very quickly, and even at $50 a month it is still accumulating, so this seems like a decent number for us.
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We do $30/mo each for DW and I. As others have pointed out, this almost guarantees you spend this much. However, we feel it is worth it to have some independence while all other finances are combined. I don't want to have to discuss if an $8 lunch out with co-workers 1/month or a craft beer purchase is ok. It has worked well for us. Our FI budget has this amount at $0 as we expect our lives will be slower and more relaxed, and have more opportunities for hobbies that earn some money. If I get an old motorcycle running and sell it, I can recoup my costs and buy craft beer for a year.
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$100 is in my budget for small things like street-fair snacks while I'm wandering the city on a weekend, birthday presents for friends, library fines. etc., etc.
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A "fun" budget is no way to live imo. Just follow the MMM philosophy and you won't need a budget
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We have $100/month each for non joint spending. Our "personal" spending doesn't really overlap and it saves a lot of resentment or guilt and allows us to save more than we otherwise would have.
Husband likes to eat out for lunch or coffee with coworkers and play video games. Seeing that against household money drove me crazy and I tried not to spend anything to offset. Thus, "fun money".
This covers: haircuts (him), clothes (me), non joint socializing, individual hobbies, and anything non-household that comes up. It's about the right amount for us but will probably go down as life goes on. If there's a good reason to spend more - new job wardrobe for example, we'll add more household funds that month.
At the end of the day, it helped us join finances smoothly and set bigger joint goals.
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we budget for $40 every 2 weeks for the both of us. so $160ish
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My fun money is whatever comes with my paycheck minus recurring bills and expenses. :)
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I never budget, but looking at my spending habits on "fun" (movies, theatre, restaurants, dates with the girlfriend), it's roughly $250 per month, but I'm pretty good at stretching every dollar.
So for instance I:
1) Rarely buy alcohol/drinks when I eat out
2) Will always try and walk to the venue
3) Will use loyalty points for free movie vouchers + sneak in my drink and just end up buying the popcorn
4) Hunt for coupons for shows or Costco discounts
5) Go to museums and stuff on cheap/discount days
Note that my "fun" expense account never includes physical items, always experiences! Still able to save over 50% of my take-home, but it's all within realms of affordability. Say I decided to buy a home, I would probably cut back significantly...
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We are empty nesters, relatively high income with everything paid for. Only ongoing expenses we have are utilities, taxes, upkeep of real estate, insurance, automobiles and basic sustenance; food, clothing, etc. It's not unusual for us to spend $2-300 per week just going out to supper and drinks a few times. Can also take off on a whim and do a $1,000 weekend without giving it much thought. Worked a long time to get here, and enjoying FI. Don't really budget "fun money" but live well within our means.
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We don't "budget" per se, but to give you an idea of what we spend, in 2015 we were at $996 for entertainment spending, $401 for snacks/chocolates/soda, $272 for restaurants, and $620 for electronics. I think that those are the only things we buy that fit into the "blow" category. I didn't include shoes and clothes because we operate 100% at subsistence for those things - new things are only bought to replace stuff worn out beyond repair. So that averages out to roughly $95/month each. We made about 75K combined last year, for comparison.
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My fun money is whatever comes with my paycheck minus recurring bills and expenses. :)
That's actually a very good way to put it.
Mine is too, also where my emergency money comes from. It's just all added up so I can have it whenever I want it.
I don't line item budget.
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Yes, I "pay myself first" so that I don't need to worry about what hits my bank account. That said, I do hem and haw over making purchases and still make an active attempt at being frugal. And, invariably, sometimes I decide to throw a few bucks into some unconventional taxable investment accounts for some "fun" investing.
I assume if most people can just commit to maxing retirement accounts they will be less stressed over hitting their budget targets.
edit: Some have coined this the antibudget. http://affordanything.com/2013/03/05/anti-budget-or-80-20-budge/
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As much as I want, really. Turns out I don't usually want a whole lot. :)
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WE each put 150 in our wallets per month and then we have an entertainment envelope with 300 in it which we use to go out for the month. WE did not do this when young because we couldn't afford it. Now we are older and can.
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We each get 200$ per month.
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My fun money is whatever comes with my paycheck minus recurring bills and expenses. :)
I agree with this! Even my grocery shopping is fun.
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My fun money is whatever comes with my paycheck minus recurring bills and expenses. :)
I agree with this! Even my grocery shopping is fun.
hell ya! Growing up cajun, food was most definitely culture so I love going to the grocery store on a friday night to make a big dish.
WE each put 150 in our wallets per month and then we have an entertainment envelope with 300 in it which we use to go out for the month. WE did not do this when young because we couldn't afford it. Now we are older and can.
I like this idea. I just recently read up on the old envelope budgeting system and think that's a neat way to parcel out money.
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$100 per person per month for non-joint purchases, including clothing shoes, etc.
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I like to see all my expenses line-by-line, so we have various discretionary line items as well as $40/month. We also discuss large purchases like laptops, but tend to set aside the money over only a month or two. This can make it look like a sudden decision, but we tend to discuss such purchases for months, and I'd prefer that money to be useful in the meantime.
The $40/ month stupid me from getting stressed about money and has been a great tool in helping us reset our automatic spending. We expect to raise it at some point, and we certainly go over, but it helps keep things feeling "fair", which is important at this point for us.
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I also don't budget this way. I have automatic investments designed to hit my minimum acceptable savings rate. If, at the end of the month I have surplus in my checking account (meaning above my minimum acceptable balance --> a subjective number ballparking my remaining bills to my next paycheck), I transfer that amount to Vanguard as well.
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$100/month each. I could do without a formal amount because I don't buy needless crap, but my wife insists that I give her an amount to spend. It helps us avoid arguments about money. We do budget for family restaurant trips, clothing, etc., and have sinking funds for most major expenses, etc., so the "fun" money is purely for solo wants, like buying lunch at work or for a hobby. She routinely spends all of her money every month, while I tend to spend half.
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How much "fun money" do you allocate for each month?
I don't budget fun money. I spend whatever I want on anything I want within the bounds of my disposable income. My priority goal at the moment is to save for FIRE so that's where my money goes at the moment, but if I wanted a new mountain bike and I decided getting one was more important than saving for FIRE temporarily I'd just go buy what I wanted.
The only money related info I track is my current FIRE savings goal and how much I save each month. I don't breakdown things into budget items and try and track them. If I wasn't making steady progress towards my goals I might budget for a while until I got things back on track.
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Love the idea of putting 150 in your wallet, isn't that empowering?
I started doing something similar a few years ago, I put a hundred dollar bill in the wallet and enjoy all the ways I DON'T spend it. It's often not "alone" in the wallet, but I always know it's there.
If I had a hundred dollar bill, I probably wouldn't spend it (they are hard to break). But if I have twenties or less they disappear so fast.
That's why I never give myself cash. Just way too easy to spend.
Put it in the wallet and it just flies away. No idea on what, and because there is no statement at the end of the month, I can't even go back to figure out what I wasted my money on.
Not a fan of cash.
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$150/person per paycheck, so $600/month total. I realize that sounds insane, but it's the amount that over the years has been determined "enough" through trial and error. My husband tends to spend his exclusively on lunches despite me making a big pot of something expressly for this purpose on the weekends and big ticket items like his recent TV acquisition. Mine tends to go to nice dinners out with friends and clothes I don't need (getting better on this second one). It sucks sometimes realizing we could find an IRA with the amount of money we blow in a year, but we've tried extreme frugality and it's just not for us.
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I think any type of budgeting is silly unless you just lack self control or are borderline in debt - for me at least. I can understand budgeting if your expenses almost meet your income or if you're self-employed, etc.
It wouldn't personally make any difference for me if I "set aside" $100 or any other arbitrary number aside for spending on anything other than essentials, aka "fun money".
I like working from the ground up and decide what I need and then go from there. Anything extra is just extra and it wouldn't make any difference if I had it or not. Most of the time it's just going to be invested though.
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I get very little fun money but my wife is another story. :)
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Very interesting discussion, you've started, Lifejoy. Given all of the YNAB and Mint users on these boards, I'm surprised to see how many people don't line-budget! I think it's a good example of how things change over time depending on your spouse/family, changing needs, changing incomes and expenses, changing attitudes towards "extra" stuff, changing financial goals.
Over 17 years together, we have done versions of separate finances, detailed tracking and budgeting, ignorance is bliss, YNAB, and now, a very basic pen and paper tracking each pay period. At this stage, we are very consistent in our approach to money, needs, etc, and are comfortable with the frugality level of our lifestyle.
We don't have a separate "fun" category. I'm not sure what would go there! We do have categories for our boat, eating out, alcohol, tools, etc. But basically, I take our income each pay period, pay bills, put aside the $ for our operating expenses for the next 2 weeks, and funnel the rest into a variety of savings/debt places as necessary. In deciding on the "operating expenses" amount, we consult about upcoming purchases, and I add $100 buffer for miscellaneous stuff. Then we largely don't check the balance again until the 2 weeks are up. (I know many would find this totally crazy!) It usually works out pretty closely (I was $5 out last week!). We consult each other about larger purchases ($100?), neither one of us spends much on anything, and we are generally supportive of spending when needed. If we disagree, we wait it out, and over time find room in the budget if we decide to go for it (or it gets purchased with unexpected $ or a side gig).
This method gives us lots of flexibility, which we like. Many weeks we don't spend as much on groceries, but we go out to eat at the last minute, or decide to buy something that comes up on sale. We seem able to absorb a few hundred dollars a month of spending that is different every month and still meet our savings goals.
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This thread IS interesting!
Frankly, I need a budget for fun money because my frugality muscle is not strong enough yet. Setting a limit forces me to keep track, pay attention, and sometimes say no to myself. It also gives me some autonomy for spending on things DH thinks are silly.
Maybe in the future, this will be different.
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This is the main area in my personal finances that I am not happy with myself for. I currently put $400 a month toward a "sinking fund" that I use to pay off my charges on my rewards credit card (which I keep at $0 balance from month-to-month). This essentially gives me the permission, in my head, to spend that money , whether it's for eating out, a gift or donation here and there, Lyft/Uber, etc. It's terrible, I know. I need to get it together. I guess my top three financial priorities are my student loan payments (which I am being aggressive with), my 401K/Roth/HSA savings, and my travel fund, so as long as I'm taking care of these things, I can <sort of> breathe a little. But not really. I need to build up my e-fund more. Progress, not perfection, right?
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We don't "budget" per se, but to give you an idea of what we spend, in 2015 we were at $996 for entertainment spending, $401 for snacks/chocolates/soda, $272 for restaurants, and $620 for electronics. I think that those are the only things we buy that fit into the "blow" category. I didn't include shoes and clothes because we operate 100% at subsistence for those things - new things are only bought to replace stuff worn out beyond repair. So that averages out to roughly $95/month each. We made about 75K combined last year, for comparison.
This is awesome. I want to strive for this. Good job!
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We don't budget this way, either. What we do is track spending in a bunch of categories, broken out in the ways that seem specific to our spending patterns, and adjust spending month to month according to goals, bills, etc. Several of these categories are discretionary and/or fun.
Essentially, we just look at monthly totals in all these categories every 6 months or so, and evaluate whether our amount spent is giving us appropriate value/pleasure for the money. We increase or decrease spending according to this criterion. When I'm trying to reduce spending in a particular category, I find the big motivator is just graphing the month to month total...if that line isn't trending downward over time, it really irritates me and makes me try harder.
However, I'm not a believer in cutting yourself totally off from things you enjoy, unless it is a real financial emergency. Instead, I will just spend less on fun things, but not deny myself completely (which is a recipe for rebellion IMO).
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Our "fun money" is by category instead of by person.
Monthly:
115 for activities (such as movies and museums)
50 for things (such as books)
100 for pocket-cash (walking-around money)
So I guess that's $132/pp.
We budget separately for eating out and travel.
SIS
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I don't have "fun" money per se. Instead, I have "Other" money in my budget, under which "fun" would fall. Nominally it's $200, but in practice I rarely use more than maybe $30 for entertainment, etc.
It's intended to be a "shock absorber" for my budget, really. It's my first level of defense against the unexpected.
I mean, you never know when the need for the occasional movie, beer run, etc., will arise!
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How much do you currently spend on fun things?
We didn't put hard numbers to 'fun money' until we started tracking all spending. It was eye opening to see what we really spent. From there, we decided we'd like to reduce it, and set lower and lower goals. The end goal is to not need a budget anymore to rein in spending (which we've achieved), but it took time and effort to work our way there.
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I"m trying something a little different this year. I took my bonus (about $1300 net) and put that in my secondary checking account. I use that for all discretionary spending - so basically fun stuff, eating out, giving, decorations for home, etc. I needed to get a hair cut for some shaping in the back that I didn't feel confident doing and that was a need so regular account spending, but if I get some funky color highlights sometime this year, that's a want and will come from that account.
I really wanted to try something that would make me more mindful of my spending. I am saving at a fairly high rate right off the top and am debt-free so I would find myself spending more than I planned or just not feeling I really got the enjoyment out of the spending that I thought I would on things I didn't really need because I felt I could afford it. Example: gifts. I'm still happy to buy gifts but I'm less likely to REALLY spoil my nieces this way because I know I'm choosing not to spend that limited account on something else. Another example, if I'm grocery shopping and I want to buy cookies, I know I need to pay for them separately because this is a want. If I'm buying ingredients to make cookies, that's a regular grocery charge. This is arbitrary based on my goals: it's helping me make less expensive/healthier choices (and motivating me because I often don't want the hassle of paying with two cards), in keeping with my values and goals (I like to bake but sometimes get lazy or forget that I find it relaxing/rewarding).
I don't know if it will be something I will continue next year or if I'll run out of money before the end of the year because this isn't "realistic" but so far so good.
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$150/person per paycheck, so $600/month total. I realize that sounds insane, but it's the amount that over the years has been determined "enough" through trial and error.
Ha! I was scanning the thread and thought we were gonna be the highest, but you beat us. We allocate $250 each, or $500 per month. For us this does not include eating out (if we're together) and clothing etc, although my wife does often account "unnecessary" clothing purchases against her discretionary.
I've got almost $5000 unspent in mine now, I'll probably invest it and generate more discretionary funds from the proceeds.
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$40 a week/$175 a month.
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$150/person per paycheck, so $600/month total. I realize that sounds insane, but it's the amount that over the years has been determined "enough" through trial and error.
(Additional information)
It sucks sometimes realizing we could find an IRA with the amount of money we blow in a year, but we've tried extreme frugality and it's just not for us.
My first thought was "holy sh*t, that's a lot," but if you're meeting your financial and non - financial goals with that spend, then more power to ya. The last bits concern me that maybe you do have some second thoughts on how much you spend, and the notion that anything less than $600/month of play money is considered "extreme frugality" had me raising an eyebrow (granted Alaska may be real pricey).
We budget in YNAB for us to each have $100/month, but we're not buying candy bars in check out lines just because we have the money earmarked.
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My partner and I have £200/pcm for spending on ourselves, which may sound like a lot, but covers anything that isn't a joint monthly bill or an essential so includes things such as:
- Mobile phone bill
- Saving for new devices (phone/laptop etc.)
- Alcohol
- Eating out
- Other holidays (stag/hen dos, lads/girls holidays etc.)
- Entertainment (cinema)
- Clothes
I personally like segregating mine into categories as I'm the one keeping track of the budgeting, but my partner has one lump sum that all her spending gets checked off at.
What it has done is to help her reign in her spending, particularly on clothes. It also reduces so much friction with me wanting to save and her wanting to buy new stuff for herself.
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I also favor the advice that others have offered: budget everything. Even "fun money" should have a budget associated with it, and the more detailed the better. I've found I am more satisfied by my purchases when I am more mindful of them - probably because I'm making better, more deliberate decisions. I have also been more satisfied with the resulting tradeoffs. You might experience similar results! I am a fan of the once-a-month, pay-myself-$100 cash approach.
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We have never had a budget. We max out the 401ks and Roth IRAs. We pay our recurring bills and then everything else is fun money. Last year I invested an additional $10,000 in the market, it actually lost some money to date but it was fun money.
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I stick to a pretty strict $2500/mo budget. The $2500 gets direct deposited into a checking account, while the rest is direct deposited in the emergency fund "high"-interest savings account. This helps prevent lifestyle drift or hedonistic adaptation or what have you. I shuffle it around as needed in Mint categories--it's totally flexible outside of the monthly bills (rent, phones, Internet primarily). Any monthly surplus gets put in a savings account for larger discretionary expenses (travel, large purchases, etc.) or I simply use it months when I can't stick to the $2500 (pretty rare).
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My wife and I have our own separate checking accounts and we each get $50 every two weeks, so roughly $100 per month per person. It's a little excessive by mustachian standards, but it gives us each a little hidey hole where our minor purchases won't be scrutinized. When we did our fun purchases through our joint accounts there was a lot of questioning on both sides - not fun.
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In the past, we have budgeted $100-250 per person, per month. When we don't budget, our personal spending probably looks like $300-500 each! INSANE. And this only comes to light when we actually track the spending, which usually doesn't happen if we're not budgeting.
So we're looking at setting "fun money" budgets. We're recently out of debt (wahoo!!!) and setting a budget not only helps me enjoy my small purchases more (I savour them, or something!) but it also helps keep me in line. I need it, at this point in my life. DH needs it because he often buys his lunch and that just drives me crazy. Fun money would make us both happier :)
I'm thinking $100/month would be pretty ok, but my addiction to jewellery might have to disappear... This thread is very inspiring, so thanks for all the comments!
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I will admit that we spend a lot on entertainment/eating out/clothes/fun stuff. But we also save a ton so I don't feel too bad about it. I also take music lessons that aren't cheap but are so, so fun and rewarding for me.
Mint tells me for the last 12 months:
Entertainment: $2,350
Clothing: $1,052 (though I know it was more than this because I track clothing in a spreadsheet, too)
Restaurants: $2,899
Hobbies: $441
Lessons: $800
That averages out to be $411/mo. on stuff most people would think is frivolous, but whatever. I'd say try to keep your frivolous/not entirely necessary spending below a certain percentage of your spending--not percentage of income, because then you might 'feel rich' but if you're trying to save 50%, that will make it harder... just think of yourself as only really only having 50% of your incomes to spend (you can force savings by having paychecks split into savings/checking, if you don't have willpower at first).
So (using rough math, no taxes in here) if income is $80k, you save $40k, spend $40k, which leaves you around $3,300/mo for living expenses, maybe you spend 10% of this on frivolity, or $330, $165 per person. Then all gifts/restaurants/coffee shops/fashion/fun/entertainment comes out of this, plus you could save it that month, if you want, or save part of it, like save $100 and spend $65. If you saved $100/mo for a year, you'd have $1,200 for some nice jewelry or to give really nice gifts at Christmas or whatever you prioritize.
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Luckily, hubby aren't big spenders, so we don't really have a fun money budget. If we want something, it's usually for a mutual benefit (something for the house) or something we need (i.e. our shoes have holes and need to be replaced).
We budget for Christmas and birthday gifts for family and typically use our credit card reward points to buy special gifts for each other or go on fun dates. It's literally a FREE gift and we both get excited about giving/receiving gifts without actually spending any money.
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$0. Unless you count my Internet and HBO bill, then $60.
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We try to keep personal expenditures (clothes, haircuts, gifts for each other, eating out with friends when we aren't together, coffee shops, anything we want to buy) below 200 per month per person. We budget for 3K a month of shared expenses (excluding taxes, savings, retirement, etc), which also includes shared fun money on things such as entertainment, travel, etc. This system works fine for us.
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Yup, I give myself $10/day to spend on non-essential things. I have a separate checking account, and transfer $70 over every Monday.
I instituted the approach after I realized that my personal MMM pendulum had swung too far. I got anxious about purchases, and a lot of my spontaneous generosity died. I instituted the allowance system, and gave myself pep talks to spend the full $70 each week. After a couple months my generosity returned, my guilt over non-essential purchases resolved, and the money left over each pay cycle went up.
Turns out I excel a flexibility set within a rigid framework.
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Im the money manager in my household, I do YNAB, I pay all the bills, etc.
My husband deposits his paycheck every week and keeps 40$ cash for himself.
I budget all the rest of the income in YNAB, so while I dont consider myself to have "fun money", I will budget in stuff for myself sometimes. I get a pedicure about twice a year. I load my starbucks card rarely, with 10$ Stuff like that. My non-essential spending is pretty low right now.
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We each get 300/mo so 600 total and that seems to work well. we also run a net zero budget so every dollar is accounted for so if we need additional fun money for a trip or large purchase we can cut back on other budget items and 50% of what we saved that month goes to the fun money budget.
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$100/mo each...and I really like doing this, as it is a strong incentive (and mechanism) to save up for something I really value personally. Without it we just have a big, mostly undifferentiated pile of money...all the earnings go into the pile, the bills get paid, a bunch goes into savings for retirement. Spending at the margins can eat away at or build the pile but that is rather intangible for me.
I really like having a direct and tangible way to see the benefits of not spending to get something cool that is also totally within my control. The other part - being able to spend some money in a way that doesn't require any justification to my DW - is also great.
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We've never really budgeted. I track our spending, fixed expenses, net worth, and investments in spreadsheets. As long as we're on track toward FI, we don't care what we spend.
Generally, when we're both working, we end up saving at least 40% of our income. We're both aware that $$ buys future freedom, which tempers our temptation to spend big on unnecessary things. We're not that prone to buying lots of stuff anyway, so it works for us.
I would say, though, that if budgeting works for you, do it. If setting aside x dollars as fun money helps you stay on track, great. Everyone is different; the same process won't work for everyone. Find what works for you, regardless of any naysayers on this thread. :)
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$150/person per paycheck, so $600/month total. I realize that sounds insane, but it's the amount that over the years has been determined "enough" through trial and error.
(Additional information)
It sucks sometimes realizing we could find an IRA with the amount of money we blow in a year, but we've tried extreme frugality and it's just not for us.
My first thought was "holy sh*t, that's a lot," but if you're meeting your financial and non - financial goals with that spend, then more power to ya. The last bits concern me that maybe you do have some second thoughts on how much you spend, and the notion that anything less than $600/month of play money is considered "extreme frugality" had me raising an eyebrow (granted Alaska may be real pricey).
We budget in YNAB for us to each have $100/month, but we're not buying candy bars in check out lines just because we have the money earmarked.
Haha, well "extreme" probably isn't the right word. In my house, it comes down to the fact that my husband and I are very different people. We largely share the same long-term goals, but what makes us happy day to day and our motivation levels to achieve those goals varies widely. We're maxing out 401ks and HSAs, and almost have his (hefty) student loans paid off, with plans to add Roth IRAs next year and rapid mortgage principal repayment within the next three. Could we FIRE faster with more discipline and sacrifice in our daily lives? Sure. But I'm OK with retiring at 42 if it means I get to do it with this guy I like instead of on my own :)
And yes, Alaska is insanely expensive. We love it here for a lot of reasons, but will be leaving once we have our $1.5M (or if the economy up here totally collapses, but that's another story).
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I'm the sole breadwinner in a family of 3. (me , wife , son).
I just split $200 for me and $200 for her. And we have an "other expenses" account for shared things like lets say kitchen plates, cups, etc...that is also $200.
Works for us.
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It's fascinating how differently everyone handles discretionary spending.
No fun money for us. We budget discretionary spending by category (YNAB), and we discuss purchases before we make them. We're consciously trying to break lifetime shopping habits, so a detailed budget + record is the best way to hold ourselves accountable. Fun money would be kryptonite at this point in my life, I think!
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It's fascinating how differently everyone handles discretionary spending.
No fun money for us. We budget discretionary spending by category (YNAB), and we discuss purchases before we make them. We're consciously trying to break lifetime shopping habits, so a detailed budget + record is the best way to hold ourselves accountable. Fun money would be kryptonite at this point in my life, I think!
It's probably worth mentioning fun money for us is personal expenses.
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I don't budget by allocating funds.
We retrospectively budget in so much that we track our financial position each month and decide if we are happy with the outcome and adjust accordingly.
It helps that we are not the kind of people to impulse buy things. I suspect that if we were to allocate $200/month each it wouldn't get spent. There were a few times as a child when my parents gave me generous amounts of spending money for holidays and I would put it into savings instead as I didn't want to buy anything. It seems I have always been this way.
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Before MMM we did 100$ each fun money and 100/month eating out.
Now we do 50 each but try not to spend it, and usually don't.
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I call it an allowance and not fun money, but basically I get $1100/mo of my own free money after my portion of the bills and investments are made. I use it on anything I want to - which lately has been medical bills and a new bike but is more often just to support things I like doing in day-to-day life.
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I don't budget by allocating funds.
We retrospectively budget in so much that we track our financial position each month and decide if we are happy with the outcome and adjust accordingly.
It helps that we are not the kind of people to impulse buy things. I suspect that if we were to allocate $200/month each it wouldn't get spent. There were a few times as a child when my parents gave me generous amounts of spending money for holidays and I would put it into savings instead as I didn't want to buy anything. It seems I have always been this way.
This is what we do. I track our spending in Mint and, every few months, retroactively make a "budget" to see whether we are cash flow positive/negative and make adjustments from there. I've never understood "fun money" in a budget as that generally sounds like purposely planning to waste money. While we do spend money on unnecessary things on occasion, each purchase is given thoughtful consideration. Spending money because "it's in the budget" seems completely backwards to me.
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OP, one additional thought - you might get better responses if you laid out exactly what would fit into the "fun"/blow category. As you can see, everyone seems to have totally different definitions. I include all entertainment and restaurant spending, but it seems like a lot of people only count their individual spending and not spending as a couple. Some people are including their individual haircuts and cell phone bills, which I don't. It's pretty interesting to read.
Regardless, it's fascinating to see that ~$100/month/person seems to be so common.
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OP, one additional thought - you might get better responses if you laid out exactly what would fit into the "fun"/blow category. As you can see, everyone seems to have totally different definitions. I include all entertainment and restaurant spending, but it seems like a lot of people only count their individual spending and not spending as a couple. Some people are including their individual haircuts and cell phone bills, which I don't. It's pretty interesting to read.
Regardless, it's fascinating to see that ~$100/month/person seems to be so common.
I think you make a really good point. That being said, I'm not sure how I'd define "fun money" in a way that would fit everyone - I think it is such a personal thing, as we've noticed in this thread. *Shrug*
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I started my mat leave in January (will be not working for at least 1 year) so I suggested to my husband we have a certain amount per month that we're each "allowed" to spend, however we want, no questions asked. We decided on $50/each/month, which may not seem like much, but we're really trying to have the mortgage paid off ASAP.
This means he can buy PS4 games without my permission, and I can buy over-priced yoga pants without hassle ;)
It's working out so far - but stuff like our Friday night dinner out, or the occasional movie date, is not included.
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I've actually been thinking about this issue from the other side--i.e., having a set amount of money that I have permission to spend on non-necessary things.
It occurred to me recently when a friend came by about going to Five Guys for lunch. I love Five Guys but haven't had it in a couple years. And I eat my lunch at the office every single day--I enjoy it, it's cheaper, and it's a nice routine for me. My initial reaction was no lunch because I already had a lunch available, and I realized that's ALWAYS going to be my reaction. Same goes with rarely getting drinks at happy hour because I've got beer in the fridge, and I can hang out with friends elsewhere.
We're in the fortunate position to be bringing in lots of extra money right now, and I think that maybe I need to give myself "permission" to spend money on non-essential that otherwise doesn't make sense to spend. A reasonable fun budget might be the way to go.
I think MMM had a post on this about in retrospect worrying less about the occasional frivolous expense. I get it now that the non-wasteful spending becomes so ingrained that it becomes tough to let go and treat something as a non-recurring expense that will have no practical effect on my financial situation. So maybe the fun budget of $100-200 per month addresses that. Or the cash in the wallet suggestion that was posted up-thread.
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In all honestly, we don't. We don't see being relatively frugal as "un-fun" so there is no need for "fun-money".
We share all accounts across the board, don't keep tabs on anything... purchases over $200 we'll give each other a heads up. I know she won't go buy $1000 purse on a whim... she knows I won't do the same... well not a purse.
We're older though, both 37. We've gone through the "let's purchase this and that" phase.
DH and I are making a budget tonight. We have no debt and make around $7k per month, total.
Of course, saving 90% of our income would be cool, but our rent already makes that impossible. So let's keep it realistic. How much "fun money" do you allocate for each month?
(If it's not obvious, "fun money" is money you can blow. So when DH wants a new tv, he can save up his fun money. When I want new shoes, heyyyy fun money! It also helps for when you buy a gift for the other person - you buy it with your fun money, instead of shared money.)
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I don't really budget any "fun money". I have a $100 line for Entertainment in my monthly budget, of which is spent about half of last year. I also give myself a little extra room for big purchases I need (like grad school applications in 2015, buying a bed and moving in 2014), but that is rarely used on fun things.
I don't really like the idea of "fun money" because it seems like you will be tempted to spend all of it. Just evaluate each purchase on its own merit.
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As with a few people here, I don't budget my "fun money". Actually, I don't budget at all per se - I spend only on necessary or things that bring me profound joy. If I have a doubt about a purchase, I wait - more often then not, I forget about it. If I look at my average monthly spending, I spend less then half of my income on myself, including living expenses (rent, groceries, utilities, car insurance, occasional rental expenses not covered by the tenant) and "unnecessary but nice to have" (cell phone, climbing gym, occasional beers at the pub, gas, camping, international travel when applicable). When I think about it, if I budgeted "fun" or "blow" money, I would STILL feel guilty spending it, so I don't see the point for myself; although I understand and respect those who would rather work this way.
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When I don't budget my "fun" money, I go wild and spend ALL THE MONEY (ok, like a couple hundred more than I would if I were budgeting and tracking).
So I pretty much need a budget. It also helps me savour things more. A $2 chocolate bar is decadent and special if I have only $100 for the month.
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When I don't budget my "fun" money, I go wild and spend ALL THE MONEY (ok, like a couple hundred more than I would if I were budgeting and tracking).
So I pretty much need a budget. It also helps me savour things more. A $2 chocolate bar is decadent and special if I have only $100 for the month.
This. Or, rather: I'd spend maybe an extra 50$ or so (manageable) but I absolutely trust that my husband would spend like crazy on electronics or music gear. Having an agreed-upon amount for personal spending that our spouse thinks is frivolous is key to a happy marriage and savings. :)
I don't just his speakers and widgets, he doesn't judge my books, and we have savings. It works.
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budgeting to blow money makes little sense IMO.
I couldn't agree more. Most people look at budgeting as "How much will I have left over to spend frivolously?" Instead, you should just sock it away. Ask yourself if there's anything money can buy that would make you happier in the long term. Usually the answer is no.
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We don't really budget, honestly. We buy what we really want, and have learned to only buy what we really want. The casual desires are shrugged off.
Our biggest remaining anti-MMM area is probably meals out, probably at least a couple hundred a month, but we're happy with our SR and on track for PT work within a year so we choose to leave it alone there.
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We don't have a budget, so we don't have an allocation for fun money, it's just whatever we want to spend.
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WE have a joint entertainment fund that we use when we both go out together and then individual fun $ that we can spend on ourselves anyway we want. It does not include things like haircuts, clothes, etc. It is strictly for having fun or buying something unusual that is not needed but wanted.
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We do $50 each per month that is "no questions asked" money. So I don't have to get all grumpy about my husband's soda machine habit, and I can enjoy lunch out at work every now and then. We also have "fun" money that we spend together/as a family ($200/mo for "miscellaneous"--so not all fun... might include a trip to the zoo, donations to the school, professional association fees, etc.).
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budgeting to blow money makes little sense IMO.
I couldn't agree more. Most people look at budgeting as "How much will I have left over to spend frivolously?" Instead, you should just sock it away. Ask yourself if there's anything money can buy that would make you happier in the long term. Usually the answer is no.
Beg to differ.
A book by my favourite author, that I will re-read a few times, and that having on a shelf makes me feel "at home". A comfortable pillow to lean on while I read on the couch. Supplies for a fire pit in the back yard. Supplies to build a smokehouse (for smoked trout from the lake out back, because I love the process and the result). A print by an artist I love, that makes me smile every time I look at it. Hell: a few sessions of therapy that helped me figure out out to break a cycle of problematic issues.
ALL of these things are worth more in my life than the $ amount would be in my savings.
The trick is to balance the happiness and the expenses. SMALL expenses for happiness, LARGE savings for long-term happiness. I'm not a monk, and I don't want to live like one.
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budgeting to blow money makes little sense IMO.
I couldn't agree more. Most people look at budgeting as "How much will I have left over to spend frivolously?" Instead, you should just sock it away. Ask yourself if there's anything money can buy that would make you happier in the long term. Usually the answer is no.
Beg to differ.
A book by my favourite author, that I will re-read a few times, and that having on a shelf makes me feel "at home". A comfortable pillow to lean on while I read on the couch. Supplies for a fire pit in the back yard. Supplies to build a smokehouse (for smoked trout from the lake out back, because I love the process and the result). A print by an artist I love, that makes me smile every time I look at it. Hell: a few sessions of therapy that helped me figure out out to break a cycle of problematic issues.
ALL of these things are worth more in my life than the $ amount would be in my savings.
The trick is to balance the happiness and the expenses. SMALL expenses for happiness, LARGE savings for long-term happiness. I'm not a monk, and I don't want to live like one.
Well put, Kitsune.
I think the great divide in this debate comes from couples vs. singles along a young/old age line. A single person can easily meet their saving/spending value range - they only have to convince themselves that what they wish to purchase is meaningful. Add a second person into the mix, and things become tricky: "Do you really need that $250 bicycle from craigslist? Wouldn't an $89 Huffy be just as good?" "Do you really need to buy more climbing gear? Couldn't you just go for a nice frugal hike instead?" Having to justify your values to another person on a constant basis would be draining and cause needless friction in a relationship. Much easier to budget so savings goals are met while freely allowing each person to experience those things that give them the most meaning in their individual life.
Along with this, age can play a factor. A 22 year old who's just finished college and isn't quite FI yet, but wants to play guitar, will be at a very different place than a 42 year old who has been playing for 3 decades. The 22 year old may need to budget $100 a month for lesson and gear, while the 42 year old probably has more gear than they need. It's much easier for the old person to say "My guitar hobby costs $0 per month." while playing his $3000 Gibson through a full Marshall tube stack - they're in a much different place. Same would go for any hobby.
I too draw the line somewhere on the spendypants side of 'monastic.' I guess I could spend my time walking around the park for free or meditating in my empty room while calculating my network on scraps of paper I pulled from someone else's garbage can, but at some point I've accepted that I desire experiences in life that come at a cost. I'm more than happy to pay that cost.
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Good points Metric Mouse and Kitsune. For us, having a budgeted amount does not at all make us think "How much will I have left over to spend frivolously?" and we've had to decrease the amount we budgeted for fun stuff because it kept accumulating in our savings accounts (i.e. we never came close to spending it all). It really does come down to having slightly different priorities about what we consider being worth spending money on.
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I agree that age is a factor. When we were young, raising our kids $ was tight so we didn't spend a lot on fun. Now we spend a ton because we are in our early 60's and intend to enjoy ourselves while we can. My kids laugh and say I am experiencing my 20's a little later in life. But they are happy that we are traveling, having experiences, going to events, etc.