Budgeting is daunting, especially since it means cutting down on how much money you can spend on entertainment and leisure. But being smart about your spending doesn’t mean cutting out fun altogether. Remembering entertainment in your budget will help you stick to it and enjoy the times you do decide to spend.
Setting a Realistic Budget
If you fail to build in any funds for entertainment, the higher your chance is of blowing your budget, says Kristin Wong of Lifehacker.
A budget with no money for things like going to a movie or subscribing to Netflix is extremely restrictive, and means that if you slip up at all the whole system falls apart. From there, the whole project will seem pointless to you and push you further from the financial future you want.
You should have an entertainment and leisure budget, but that doesn’t mean you should throw as much money into it as you want. According to Wong, spending more money than you take in is called lifestyle inflation. Usually, the key culprit is sneaky fun expenses, like a fancy dinner or an impulse theater ticket.
All of these costs can lead to you living paycheck to paycheck — or worse, you might accumulate debt. If you’re not meeting your financial goals, it’s time to take another look at your budget and make sure your entertainment spending isn’t out of control.
Another benefit of reining in your entertainment expenses is a chance to look critically and what you’re spending. Did you really enjoy that $20 movie ticket, and did you need to order in pizza last Wednesday night? Take this opportunity to cut out expenses you don’t really need and embrace a simpler lifestyle.
Related: Try the 30-day rule to save money >>
Consider Expert Advice
How much you set aside for fun depends on your unique needs and income, but one trick you can use is the 10 percent rule.
According to Tom Corley of CNBC, you should start your entertainment budget at 10 percent of your net pay. That means it’s not 10 percent of your total income, but what you have left after your employer takes out taxes, insurance or retirement.
While that might seem like a lot of money, once you factor in eating out, trips to the bar and travel, it might require more sacrifices than you think.
Look for Alternatives
You finally set a budget, and now it’s time to live it. While your new conservative spending goals might seem hard to live with, consider looking for alternatives or programs to help you succeed.
Instead of spending upwards of $50 on a concert admission, you can look at free concerts, plays and movies that might be in your area. If you really want to spend your money on a more premium experience, like sports tickets or a day at the spa, plan ahead so you can save money from your budget to pay for it in the future.
This extra time will help you find deals or coupons you might not have known about if you spent the money impulsively.
Where to Find Free Entertainment and Deals
Sometimes, getting a little creative with your planning can mean finding big savings. In this case, the Internet is your best friend.
- Sites like Groupon and LivingSocial can help you score deals and coupons on nearby attractions, restaurants and events.
- Many restaurants and stores offer special savings when you sign up for their newsletter or download an app. If you’re buying something anyway, you might as well take advantage of the offer.
- During certain seasons, places like zoos and museums often hold free or discounted-ticket days. If you’ve been wanting to try one, plan your trip for a day when tickets are cheaper.
And remember, entertainment doesn’t always have to mean doing something big. It could be a simple night in, an afternoon of playing board games with friends, or a day trip hiking in a nearby park. Sometimes, the best things in life really are free.
Get Help with Your Financial Goals
Reaching for financial goals doesn’t mean you have to only spend money on necessities. With proper planning and a close look at where your money goes, you can have fun while still living frugally.
If you’re saving up for a big goal, like buying a house or putting money toward retirement, Minster Bank can help. Check out our free online tools to help you set a budget, compare retirement plans, plan for a down payment, and more.