Budgeting in the Fun
While it’s all good to save and make sure we pay our bills on time, there’s something said to making sure you can stick to your budget. If you don’t take the time to budget in some spending money or vacation time, there is a likelihood of slippage, and once you’re on that slope, it’s hard to get off it and back on track.
First, make sure you understand the basics of budgeting and personal finance. Without a handle on these basic principles, the topic of discussion here will make little to no sense.
Keeping to a budget requires a certain amount of discipline. Recently, after selling some items I’ve been trying to get rid of, I was asked what I was going to do with the money. My response was, “Apply it directly to my credit card debt.” I was then told by the person in question how amazed they were at my discipline. Yes, I’m going on vacation in slightly over a week, but I budgeted my spending money for that vacation and this was more of an unexpected windfall. I didn’t need it for spending purposes, but I do need to eliminate my debt.
This is the crux of the matter. If I hadn’t budgeted for fun spending, or for the vacation in the first place, that money would have been gone, and my credit card debt wouldn’t be any closer to being annihilated. As a matter of fact, without budgeting for the vacation in advance, it’s quite likely I would have simply added to my credit card debt, simply to have fun. This would have ruined the discipline I’ve put myself under and I never would have been able to stick to my strict credit card repayment plan without it.
It doesn’t take much to remain disciplined and save for fun. I do it at about the rate of $50 per paycheck. I have this money automatically removed from my checking account to an ING Direct savings account, where it will earn interest (currently at 4%). It took me approximately 6.5 months to save enough for my share of my upcoming vacation, a 7-night cruise to Bermuda out of Boston. Here’s where I saved money on the cruise. I’m leaving out of Boston, where I live, so I’m saving any airfare to another destination port. I choose a cruise that was only stopping in one port in Bermuda, saving port fees. I am sharing my cabin with my boyfriend and another couple, saving about $200 each. All meals are included, but alcohol is not. So, since we enjoy wine with dinner, I’ve worked out my spending budget to include the service charges the cruise-line automatically takes out, wine, and a snorkeling excursion. After making my final cruise payment in February, I still had through my April 28th paycheck to save for spending money of this sort, giving me about $300 on my $50/paycheck savings plan.
Now, this is a great vacation, but by far not the cheapest thing we could have done. We could have gone camping for next to nothing up in New Hampshire’s White Mountains. There are other low cost trips. We’re considering saving for a camping trip to Yellowstone next year. The main costs would be the flight and the rental car. We’d camp in the park and even get to take a side-trip to the Grand Tetons. It wouldn’t be a terribly expensive way to get a unique and interesting vacation. The longer you stay, the more cost effective your flight becomes as well.
However, putting aside $50/paycheck might not be realistic for everyone. Even at $25/paycheck, you’ll have $300 in 6 months, enough for a nice, extended holiday within driving distance of your home. At $10/paycheck, you’ll have $240 in 12 months, also enough to go on an annual getaway if you budget it properly.
Even if you put nothing aside for a vacation, you should, at the very least budget in a dinner and movie out about once a month. Recently, in order to keep our movie costs down, we joined NetFlix, where for $12.56 (including tax) per month, we get a total of 4 movies between the two of us. Last night we sat at home and watched a classic Japanese film by Akira Kurosawa called Ikiru (1952), an excellent film we obviously couldn’t see in the theatres. If you’re not up for a subscription service, your local video rental place would likely appreciate the business. It’s about $8 cheaper to rent a film than to go to a movie in the theatre. Pop some microwave popcorn and pour some soda to complete the experience. Plus, you don’t have to worry about the people who don’t turn off the cellphones during the performance!
In broad terms, it’s important to make sure you do what you consider as fun in life, as long as you’re being disciplined in your budget in other areas. As a matter of fact, it’s important to put fun as a line item in your budget and it doesn’t matter if you put $10 per paycheck or $100 as long as you have enough fun to keep to your budget in other areas.
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May 15th, 2006 at 6:31 pm
[...] Last time I wrote about budgeting in the fun. This week, as I prepare to go on my cruise vacation to Bermuda, I feel it’s good to talk about budgeting for the vacation itself. [...]
May 15th, 2006 at 8:37 pm
[...] Money Stuffed: That Vacation Budget [...]