I finally paid off all my debt except for my house, and I have an emergency fund of six months of expenses saved. It feels great to be in control of my money, but I am afraid I might lose control again and end up back where I started before I began following your plan. How can you make sure your leisure spending doesn’t get out of hand?
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I get what you’re saying. You don’t want to go back to those days of being scared and out of control where your finances are concerned. You spent a lot of time, made tons of sacrifices, and put in lots of disciplined hard work getting out of debt, changing your behavior, and finally reached a point where you’re winning with money. Most people don’t forget the hardship and sacrifices that go into something like that, and I don’t think you will, either.
There’s a season to be strict, hard-nosed, and deny yourself things. There’s also a time to act like an adult, and forego instant gratification, like during those early Baby Steps. But some self-care and a little fun is important once in a while, too. One way to enjoy life without going financially overboard is to make a budget line for fun money.
Putting fun money in your budget isn’t a green light to forget your money goals, or go on a spending free-for-all. It’s actually part of sticking to your budget. Remember, you want a zero-based budget. That means giving every dollar a job, and having a fun money category helps you focus on all your spending, so you don’t accidentally waste money on little things here and there.
When you give yourself a budget line for fun, you can spend that amount on whatever you want. We talk a lot about goals and how they need to be a balance of empowering and realistic. Budgeting fun money helps with the realistic side, because it lets you stick to your goals and have a treat every now and then.
When you think of your budget as permission to spend, you get a new perspective on budgeting. You’re giving your money permission to go where you want it to go. Plus, when you treat yourself once in a while, you’re less likely to fall back in your old, financially-out-of-control ways!
* Dave Ramsey is a seven-time #1 national best-selling author, personal finance expert, and host of The Ramsey Show, heard by more than 18 million listeners each week. Hehas appeared on Good Morning America, CBS This Morning, Today Show, Fox News, CNN, Fox Business, and many more. Since 1992, Dave has helped people regain control of their money, build wealth and enhance their lives. He also serves as CEO for Ramsey Solutions.