How much should I be spending on ‘fun stuff’?
Dear Cheryl&Mack,
I've been wondering about something for a while now and I need your help.
As someone who loves to have a good time, I'm always torn between splurging on fun activities and saving for the future.
I mean, is it really worth it to drop $200 on a night in the city or a baseball game when I could be putting that money toward buying my first home?
But on the other hand, I don't want to be a boring penny-pincher who never does anything fun…
For example; last week I had the chance to go on a spontaneous weekend getaway with my friends, but I couldn't decide if I should go or not - super lame but I ended up not going because I was worried about the cost, but now I'm wondering if I made the right decision.
So, how can I strike a balance between enjoying my life now and preparing for the future?
How much should I actually be spending on fun stuff without completely sabotaging my finances?
Signed,
Boring Penny Pincher
Dear Boring Penny Pincher,
You're definitely not alone in wondering about how to balance your spending on fun activities and your overall financial goals.
It's great to hear that you're enjoying your life and making the most of your free time, but it's also important to keep an eye on your budget and make sure you're not overspending.
When it comes to figuring out how much you should be spending on fun stuff, the answer will vary depending on your individual financial situation.
A good rule of thumb is to allocate a certain percentage of your income towards discretionary spending, which includes things like entertainment, dining out, and travel.
The exact percentage will depend on your income, expenses, and savings goals, but a common recommendation is to aim for around 20-30% of your income.
Since everyone's financial situation is unique, it's crucial to take a closer look at your budget and track your spending over a few months to see how much you naturally spend.
This will give you a better idea of your past spending habits, so you don't underestimate and exceed your budget.
While tracking your expenses, don't forget to consider your income, fixed expenses, and savings goals to see how much money you have left for discretionary spending.
Once you have a clear picture of your finances, you can decide how much you want to allocate towards fun activities.
By taking a comprehensive look at your finances and tracking your spending, you can strike the right balance between enjoying life and staying on top of your finances.
It's also a good idea to be mindful of your spending habits and look for ways to cut costs where you can.
You might consider looking for deals on concert tickets or dining out at restaurants during happy hour. And if you're planning a trip, consider travelling during the off-season or looking for cheaper accommodations.
At the end of the day, it's all about finding the right balance between enjoying life and staying financially responsible.
So keep making memories and enjoy life because it sure is short, but don't forget to keep an eye on your budget too!