Finding Room for the Spontaneous

This past Friday, I got an e-mail from my uncle letting me know the Sox were here in Seattle. Since leaving Chicago, it's rare that I get to see my hometown sluggers, and it's not an opportunity I would want to miss. But by the time I caught wind of the windy city being in town, the cheap seats were sold out, which meant that tickets for my girlfriend and me were around $50. Yes, I should have checked the schedule ahead of time and planned accordingly, but I didn't. I took the cost in stride, along with the $6 Seattle dogs (cream cheese and grilled onions — so good), because I had money set aside for this very reason. Awhile back, I started contributing a small amount each month to what I call my spontaneity fund.

The Spontaneity Fund
We often hear that the first step of our personal finance expeditions should be to set up an emergency fund. A spontaneity fund isn't the second step, or even the third or fourth, but I wanted a way to follow a whim or two and not feel guilty about it after. Whether it's a concert I just found out my favorite band is playing down the street, or an impromptu evening out because my best friend had a terrible week at work, I want to be able to be there without breaking my budget completely. At my income level, without money set aside, there's no way I would've been able to see my beloved White Sox at the ballpark the way I used to as a kid. This is exactly what I had set up a spontaneity fund for; it's like an emergency fund for total non-emergencies. That said, where does the money come from?

The tweaked Balance Money Formula
Ever since coming across All Your Worth: The Ultimate Lifetime Money Plan by Elizabeth Warren and Amelia Warren Tyagi, I've been using something quite similar to their balanced money formula, with a few tweaks to match my lifestyle. The authors say that out of each paycheck, 50% of your income after taxes should go toward needs, 30% to wants, and 20% to savings.

Check it out:

What drew me to this formula was its utter simplicity. I can pay my bills, have fun, and still be stashing money away for my future goals without making things complicated. The authors say that one of the greatest advantages of having your budget balanced in this way is that managing your money becomes automatic, so you can stop worrying about it. Awesome. Great.

Except that I didn't stop worrying about it. I found that my wants category ended up being more like 15% of my paycheck, and not 30%. I couldn't let myself relax and enjoy. I could afford to do things like go out for dinner, sure, but I'd worry about the long-term damage it would do and just end up staying at home. If I planned for a dinner, like a birthday or holiday, then great, but a Friday night dinner just because wasn't something I'd allow myself. For some reason, my wants category meant planned wants that could be justified and not frivolous, why-the-heck-not wants.

I'm not saying that I should be less conscious with my disposable income, but in my case, I needed to loosen up. Being smart about money shouldn't mean worrying about it all time. So I sliced a little bit off, just a tiny 5% to put into my spontaneity fund. It allows me money to just let loose every once in a while. This month, it went toward a baseball game, some bigger-than-my-head hot dogs, and overpriced stadium beer. I didn't skip a beat when it came to paying for them, and I got to watch the game and enjoy one of the sunniest days us Seattleites have seen all year. Next month, who knows? Maybe it'll go toward dance classes or a case of Snapple for my girlfriend.

Other ways to spend a spontaneity fund
I've also found a couple of websites and clubs out there that are worth my spontaneous funds. Here are two of my favorites:

  • Fill A Seat. This site started in Las Vegas and has made its way to most major cities. How it works is that you pay for a yearly membership (usually around $80) and when venues have empty seats for shows, concerts, and sporting events, the seats are offered to members at no cost. It requires utter spontaneity, as often, you don't know you're going to a concert until the day of, but you can see some great live music at no cost to your monthly budget!
  • Groupon Now. I'm sure most of us have had our successes and failures with Groupon and quickly realized that spending money never equals saving money, no matter what percentage you're saving. That said, when an impromptu lunch or dinner arrives, I often find myself on Groupon Now, which is similar to Groupon, just on an hour-by-hour basis. You are only able to redeem Groupon Now coupons the same day and only during a given time period. Last week, I got a delicious $5 Ethiopian brunch while meeting a prospective client.

Although my spontaneity fund is for frivolity, that doesn't mean I like to see it go away quickly. I still use it as wisely as possible to keep it healthy for the next month.

Finding the balance between being smart about money and worrying about money is hard. But I find the more I can clearly define my own limits, the less I worry about having a little unplanned fun in my life. Warren and Tyagi suggest that at the point that you continue to trim fun spending down to the quick, you “might be missing the point of money.”

Are you frugal to a fault? How have you given yourself permission to loosen up a little without guilt?

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Eric J. Nisall - DollarVersity
Eric J. Nisall - DollarVersity
8 years ago

Did you end up going to the Saturday game and witnessing the perfect game? I think it’s of great importance to have some flexibility with a budget, including room to be spontaneous. I could imagine that it’s nearly impossible to live life in such a regimented manner as to have every single penny and action planned out (unless you are in the military) and be truly happy. Having a plan is great. Saving is great. But what good would all of the planning and saving do you if that’s all you do? I love the fact that wants are a… Read more »

Megan
Megan
8 years ago

“But what good would all of the planning and saving do you if that’s all you do? ”

^^This, times a million.

I think that too often, people trying to improve their personal financial picture get caught up in budgets and numbers. While it’s important to stay on track, you can also live a little and do something at the spur of the moment.

Matt at Healthy N' Wealthy
Matt at Healthy N' Wealthy
8 years ago
Reply to  Megan

Agreed. I think the whole point of personal finance is to find the best way to use your money to make you happy, not to necessarily to save everything you earn. Buying hockey tickets today, even though it may mean I can’t go out to dinner next month, is worth it for me. It’s all conscious spending: understanding what makes you happy both now and in the future.

Elizabeth
Elizabeth
8 years ago

Nicely put, Matt!

I think I fall into the trap of saving for future happiness at the cost of present happiness. Right now I’m thinking of delaying purchasing a condo so I can live a little more.

Jon Smith
Jon Smith
8 years ago

Adding my own plus one to this comment.

Currently, I’m probably spending a lot more on Needs and Savings than I am on Wants, and I suspect my happiness could suffer because of it.

Great post, very timely for me!

Tony Dobson
Tony Dobson
8 years ago

I’m also curious if you went on Saturday. Sunshine across Safeco looks like the highlights.

Not sure if it is quite relevant, but I save towards my sporting attendance and corresponding travel/merchandise/etc. Being realistic there are events I know I will see over the course of a year so I save for them across the year so that it isn’t an “all-at-once” burden.

Megan
Megan
8 years ago

I REALLY like the concept of this fund, and I’ll have to set one up for my family.

Too often, I think people would have just taken the money out of the emergency fund – if they spent the money at all – and then would feel guilty about it because it’s not an emergency. Keeping a small fund for occasions like this makes it OK to occasionally splurge – even if it is for tickets to a Sox game. 🙂 (Sorry; I’m a Cubs fan.)

http://traderjoesreviewer.blogspot.com

TB at BlueCollarWorkman
TB at BlueCollarWorkman
8 years ago

I think a spontaneity fund is a great idea, it can be part of the “wants” slice. I, however, do not support you spending such a fund on a team like the White Sox.

Marianne
Marianne
8 years ago

My husband and I have ‘allowances’ that are sort of like your spontaneity fund. We can spend that money however we want no questions asked and it’s on top of our regular wants and needs in other categories. My husband spends his as fast as he gets it (sometimes faster..) and I can never find anything to spend mine on. 🙂 I think I need a hobby…

Paula
Paula
8 years ago

WOW TIM;
What a great idea and one that is hard for me. I’ve got accounts set up for everything except wants.
This is my challenge to stop being ‘old school’ and to have a fund for fun.
Thanks for the article and by the way, we are loyal fans of your cross town rivals – Go Cubs Go!

Mom of five
Mom of five
8 years ago

I love this idea! I think it would’ve been great for us a few years ago when we were digging out of the debt hole.

Mike
Mike
8 years ago

Is putting money into my Roth IRA a want, a need, or saving?

Smart Military Money
Smart Military Money
8 years ago
Reply to  Mike

Mike,
I would say putting money in any type of retirement account is saving. Even though you could withdraw money from your Roth IRA, the point of such an account is to save for when you’ll never (plan to) work again.

-Christian L.

WWII Kid
WWII Kid
8 years ago
Reply to  Mike

Mike – How about I want to have a comfortable retirement so I need to put money into a retirement account, saving me the trouble of eating cat food in my later years.

Carol in Mpls
Carol in Mpls
8 years ago
Reply to  WWII Kid

The only member of my household that’ll be eating cat food down the road is my cat.

I love this idea, and am working toward the Balanced Money plan. For me, that means savings & investments, mindful spending, and joyful living with an eye towards being spontaneous when it’s appropriate.

sun mat
sun mat
8 years ago

i think this is a great idea! my wife and i struggle with the splurge or impulse purchase from time to time and this would help offset that. still a lot of other things to do to get our financial house in order, but this will be on our to-do list.

and there is absolutely nothing wrong with spending money on the Sox, it may even fit into your “Needs” category =)
White Sox, White Sox, Go Go White Sox!

Ms Life
Ms Life
8 years ago

I have a sub-account which I named “Fun Money” for spontaneous things but which has been a bit dormant of late. I will jump start it again. Thanks for the reminder!

Well Heeled Blog
Well Heeled Blog
8 years ago

I don’t have a spontaneity fund, per se, but cash money by any other name will spend just as sweet. 😉

That’s why I try to keep my fixed expenses, such as rent and car expenses, low, so that I can have left over cash to save but also to spend on other things I want… even things I don’t quite know I want yet.

Terri
Terri
8 years ago

Great article! I totally agree. I feel that often when people find a budget is just too restrictive it’s because they have failed to budget in some good ol’, random fun money!

Sheryl
Sheryl
8 years ago

Sometimes the spontaneous wants are the hardest to deal with. I’ve never done anything like a formal budget line for my spontaneous spending, but I tend to keep any leftover spending money hanging out in my wallet for such occasions.

Kevin
Kevin
8 years ago

Interesting post, but why is the accompanying photo all faded and washed out? Is that a symptom of a poor camera, or some sort of trendy, deliberate, “gimmicky” photo treatment? Either way, it looks awful, in my opinion.

El Nerdo
El Nerdo
8 years ago
Reply to  Kevin

Dude, you’re bananas.

First of all, Tim’s girlfriend is pretty, so that alone makes the picture look great. Seriously, get your eyes checked.

Second, it’s an instagram, and it was taken in a stadium with a phone. Get with the times, pops!

Becka
Becka
8 years ago
Reply to  El Nerdo

While there was certainly no need for Kevin’s comment, the purpose of instagram does seem to be to level the mobile photography playing field by making everyone’s phone photos look crappy in the same limited set of ways. Instagram may be popular, but that doesn’t mean it’s right!

Nina
Nina
8 years ago

I’ve also tweaked the balanced money formula a bit. My needs category only takes 35% of my income, but I’ve deliberately kept the savings and wants to the original level. This leaves me with 15% of my income for what I call “big ticket items”. The category is a mix of wants and needs. This year I’ve used that fund to pay for a new phone (after previous one broke totally unexpected – a need), flights, hotels and a couple of designer silk shirts (wants). In a way it is also a cushion on cushion – I haven’t touched my… Read more »

WWII Kid
WWII Kid
8 years ago

Um, isn’t planning for spontaneity a contradiction? It’s like planning for your own surprise birthday party.

Moneywisdomtips
Moneywisdomtips
8 years ago

Being financially intelligent is the way out when all else fails.Planning is not a guarantee to get it right

John @ Married (with Debt)
John @ Married (with Debt)
8 years ago

JD might need to start a spontaneity fund, given his problem from yesterday’s post.

Encouraging yourself to be spontaneous is an interesting experiment.

Crystal
Crystal
8 years ago

I had the exact same problem a few years ago – I would not allow myself to splurge or I felt extremely guilty. It was causing problems between my husband and me…I’d go a little crazy if he even bought a $40 video game without planning for it in advance. And we weren’t broke – we were bringing in $60-70k jointly a year in Houston, TX and only living on $35k a year. Then I came across pf blogs and saw something called “fun money”. Hubby and I set up two separate ING accounts that night and have been contributing… Read more »

Dog Lover
Dog Lover
8 years ago
Reply to  Crystal

I’m like you, Crystal… but not just holding back on splurges! Jeez, I spent MONTHS cursing a shoddy can opener before I finally admitted to myself that spending a few bucks on a functioning tool would not break the budget. I’m embarrassed to write that now, it seems so silly. Frugal to a fault 😛

Crystal
Crystal
8 years ago
Reply to  Dog Lover

Maybe you need a “Because crap sucks” fund. 😉

VT Moose
VT Moose
8 years ago

I’ve never really figured out how to manage this sort of fun slush fund, but I do regularly spend unbudgeted money going to shows and on adventures (not quite vacations, but not lounging around the house either). Of course, all of these expenditures end up on my credit card (GASP, I pay it off every month) but it definitely takes a lot more mental attention to make this system work. Ultimately, this sort of spending keeps me glued to Mint making sure that I don’t push myself into any bad financial positions. I’ve toyed with creating a slush fund targeted… Read more »

Brenton
Brenton
8 years ago

my girlfriend and *I*

*I*, not *me*

You are a professional writer, please act accordingly. The rest of article was modestly interesting, but that line bugs me too much.

Thank you.

Becka
Becka
8 years ago
Reply to  Brenton

You mean this?

“which meant that tickets for my girlfriend and me were around $50”

I assume so, since that’s the only instance of “girlfriend and” in this post. So let me offer you some advice: if you wanna go around posting snotty grammar snob comments on blog entries, you might want to try being right first.

DB
DB
8 years ago
Reply to  Becka

AMEN! As a die-hard grammarian, may I recommend that you think very carefully before correcting someone. Nothing worse than correcting grammar and being wrong. 🙂

Brenton
Brenton
8 years ago
Reply to  Becka

???

It still should be “my girlfriend and I”. Or, more appropriately, “tickets for us”. The sentence was badly worded.

Grammar
Grammar
8 years ago
Reply to  Brenton

It’s an object pronoun, not the subject.

Think of the sentence without the words “girlfriend and.” It would then be “tickets were $50 for I.”

Us, as you recommend, would work, but there is no reference to what the “us” is beforehand and I can’t blame Tim for wanting to claim the girl in the picture…

Becka
Becka
8 years ago
Reply to  Brenton

The sentence is fine. Your grasp of grammar is weak. “My girlfriend and me” is the object of a preposition, and thus the object pronoun form is correct – me, us.

Trust me on this. You are really, completely wrong.

Matt at Healthy N' Wealthy
Matt at Healthy N' Wealthy
8 years ago
Reply to  Brenton

No, it absolutely should not be “my girlfriend and I.” Take “my girlfriend” out of the sentence and see how it sounds…

“tickets for I were around $50…”

or

‘tickets for me were around $50…”

If you want to get technical, the only time you use “I” is when it is the subject of a clause. In all other instances, you use “me.” In this case, “me” is the object of the preposition “for,” hence why “me,” and not “I,” is used.

The sentence was worded perfectly.

Brenton
Brenton
8 years ago
Reply to  Brenton

No. Tickets is plural, but there is only one set of them, not two sets of tickets. One set of tickets for one group of people. Saying my girlfriend and me implies there is a set of tickets for each of them, which is incorrect. “Our tickets” would have been a much better choice in this sentence. Flip it around “my girlfriend’s and me’s tickets” is stupid. Even “my girlfiend’s and I’s tickets” is stupid. “Our tickets” would be correct. Just like “tickets for us” would be correct, although still a bit awkward. The implied double plurality changes the normal… Read more »

Susan
Susan
8 years ago
Reply to  Brenton

No, Brenton, there is no rule for “double plurality”–where in the world did you get that? “Tickets for my girlfriend and me” is perfectly fine English. “my girlfriend and I” was incorrect as multiple people pointed out to you.

Matt at Healthy N' Wealthy
Matt at Healthy N' Wealthy
8 years ago
Reply to  Brenton

I’m not trying to be mean but you’re wrong about everything. He can’t say “our tickets,” because there’s no antecedent to explain who* the other person is. The plurality of “tickets” doesn’t change anything. If he had used the singular, “ticket,” it would imply that only one ticket was needed for both of them. I feel like you’re trying to grab onto something to redeem your first comment. Give it up. You were wrong. Move on. You’re only digging a deeper hole, and no one really cares anyways. *That’s “who” and not “whom,” even though it is the object of… Read more »

J.D. Roth
J.D. Roth
8 years ago
Reply to  Brenton

Brenton, JD here. I will gently add to the chorus to let you know you are incorrect on this. The object pronoun is always me, no matter how strange that can seem to those of us raised to believe we’re supposed to use a polite I. But it’s true. If you want, I’ll point you to an entire rant I wrote about this on my personal blog.

Ely
Ely
8 years ago
Reply to  J.D. Roth

I want the rant! This is one of my cherished pet peeves… 😉

El Nerdo
El Nerdo
8 years ago

So GRS ate my comment and told me I was posting too fast. Lies! Anyway, I was trying to say that the Balanced Money Formula is awesome for several reasons. 1. You don’t have to trick yourself into saving by stashing money in sock drawers, getting a special credit card that puts a dollar in your savings account for every transaction, or any other silly nonsense. You take the money off the top when you get paid and it’s done, blam, saving is over for the pay period. 2. Once your wants budget is set up you don’t have to… Read more »

Dan
Dan
8 years ago
Reply to  El Nerdo

I give my wife two separate budgets — a wants budget, and a needs budget.

I truly don’t care what she spends her “wants” money on, but she has a habit of spending most of it early in the month. I ride her hard for that, because inevitably, other “wants” come up later in the month for which she has no money. When that happens, I tell her tough, learn to spread your fun money out a bit more.

Christine+T.
Christine+T.
8 years ago
Reply to  Dan

I don’t know if you realize how your comment comes off. You sound more like a parent trying to shame a child rather than 2 equal partners managing a budget together.

Frugal Portland
Frugal Portland
8 years ago

I’m exceedingly frugal when I’m by myself, and I leave room in my budget so that I can say yes when friends say “happy hour?”

Jessica
Jessica
8 years ago

A spontaneity is such a great idea. I’ve always find it hard to justify spur of the moment wants, and now I have a great solution!

Tyler Karaszewski
Tyler Karaszewski
8 years ago

Lately I have the opposite problem – I can’t think of things to do with my money fast enough. It’s just piling up in my checking account. Part of this is the result of having a baby – so much time is consumed by work and the baby that I don’t have any time left to spend money. Even shopping online seems like too much work by the end of the day. I buy the occasional kindle book on amazon, or iPhone app, but those are cheap and don’t really affect my checking account balance by much. There are a… Read more »

Matt at Healthy N' Wealthy
Matt at Healthy N' Wealthy
8 years ago

I can’t afford 30% for wants, but I like the idea of spontaneous purchases. Not everything has to be planned, and as long as debt isn’t used, you can always sacrifice something else in the future to make up for it. An unplanned evening out to dinner may mean that you have to sell those baseball tickets, but who cares?! There’ll be other games, and unplanned activities can be a nice way to break up a long week. Same argument works vice versa.

amber
amber
8 years ago

I attempted this BMF budget but got too confused between needs and wants. I Need to eat. But I do not need to eat sushi or Italian mineral seltzer water. How do you reconcile? I considered taking the U.S. government’s recommended food spending for a single person as the “need” limit and taking everything additional out of the Want, but applied to everything in life it gets far too complicated for me. Every time I buy something above the basic grade, I am satisfying a want. This applies to everything in life, especially those things that fall under the umbrella… Read more »

Catherine
Catherine
8 years ago
Reply to  amber

I have the same problem with this. It’s too hard to, for example, split up my grocery receipts to determine beer=want, oatmeal=need, vegetables=need (is the price difference between organic and not organic a want?) cheese=????. Is the price difference between my apartment and a room in a shared apartment in a not-as-nice neighborhood a want?

Balanced money confusion
Balanced money confusion
8 years ago
Reply to  Catherine

This^^^ I get so frustrated trying to figure out what goes in the needs and what goes in the wants. Will reading the book actually clarify the following scenarios? I WANT a second home – but I already have a mortgage for it – so I NEED to pay the bill. But actually a marjority of that cost can be thought of as investment that can be recouped in the future – so it’s being SAVEd – for that matter how does that same argument go towards my primary residence? You do NEED somewhere to live… Likewise – 401K comes… Read more »

Dan
Dan
8 years ago
Reply to  Catherine

+1. I can’t add much here, other than to say that I make a nice income in the DC suburbs, spend 75% of my income on needs, and can only dream of the day that I can blow $1200/mo on “wants.” Our rent costs me $1300/mo. We live in a basic apartment near my work, but in a desirable part of town. I could lower my rent a little bit by moving further out, but then my commuting costs go way up. Some of my needs fall into the category of “I wanted X, and now I need to pay… Read more »

El Nerdo
El Nerdo
8 years ago
Reply to  Dan

See, this is why you need to read the actual book. You’re making the wrong assumptions here.

In the BMF system, debt repayment belongs to “savings”, not to “needs”, so your student debt payments count towards that ideal 20%. You’re closer than you think you are.

Give the book a try! It makes a ton of more sense than the hearsay about it, I swear.

El Nerdo
El Nerdo
8 years ago
Reply to  amber

Read the book! All will be made clear in great detail 🙂

[And yes, “needs” is a basic budget and financial commitments, everything else is wants. E.g. for groceries budget $180/person per FDA allowance as “needs”, additional costs come from needs. It’s really easy and you don’t have to do a mental accounting of everything. But read the book! I got mine at the library.]

Catherine
Catherine
8 years ago
Reply to  El Nerdo

So, here’s a question: I spend at the “thrifty” level according the USDA’s chart (37.20/week). But I could easily spend less if I didn’t buy certain items like not-on-sale rice crackers and goat cheese. What then?

(Should I just read the book?)

El Nerdo
El Nerdo
8 years ago
Reply to  Catherine

The point is that if your needs budget is at or below 50% you’re pretty healthy financially. Hey, you could even get yourself a cable contract with the leftover money and turn a want into a need if that’s what you decide, I suppose. “Needs” in her context doesn’t mean “everything you need in life” (e.g., “I need books”), it means “your basic budget if you were to lose your job tomorrow, to include all your financial obligations”. This is not about tracking and bean-counting $37.20 a week, it’s about fitting a big picture where dollars and cents can fit… Read more »

amber
amber
8 years ago
Reply to  Catherine

OK el nerdo. I will give *reading* a try. This will likely cut into my *web surfing* time budget though.

and Catherine, kudos to you for spending so little on food. Really amazing. I think with the extra you send that to wants or savings. I don’t think it is ever a problem to spend too little on food unless you are not getting the nutrition, which it sounds like you are.

Dan
Dan
8 years ago
Reply to  Catherine

@El Nerdo You are so right about the big picture. But, the big picture trickles down to the small picture, and that’s where budgets come in. Who cares if I spent $15 going out with my coworkers for lunch today? It’s only $15. However, if I did that every day, that’s $300/mo. In my world, that’s too big for “rounding” error, but fine if I budget for it. In the end, all that matters is that we spend less than we earn. To that end, I strive to keep our ongoing contractual expenses as minimal as possible. In part, it’s… Read more »

El Nerdo
El Nerdo
8 years ago
Reply to  Catherine

@ Dan I get your point, I do. However, the effort to spend less than you make is much greater if you do it on a per-transaction basis instead of upfront. So ultimately it might be harder to sustain (but then again, lots of people run marathons). For example, if I have $300 budgeted for wants and I burn it all in lunch with friends, then that’s it, the money is gone, I have no more money for wants, there is no place to get more. Once I run out of fun money I’ll have to brownbag my lunch until… Read more »

Jez
Jez
8 years ago

Something I’ve never really been clear on – if your Needs are over the line, do you make up the difference from Wants, Savings, or a mixture?

Obviously the “best” thing you can do is take it out of the Wants, but that can put you in a psychologically unsustainable position.

(My situation – I’m at 65% Needs at the moment. 8% is going to my 401k, and then 27% is going to an account where sometimes I save some stuff but mostly I don’t.)

El Nerdo
El Nerdo
8 years ago
Reply to  Jez

If your needs are over the line you don’t “borrow” from other areas– you just shrink your needs. How? You move to a smaller place, you sell the extra car, you get rid of the phone contract, you shop for new insurance, downsize the cable bill, whatever you need to do to reduce your financial obligations, which are what make people lose sleep at night over finances (“how am i going to pay X bill now?” “what if i lose my job tomorrow?”). If your needs decrease and your savings increase you’ll sleep a lot better and have more fun,… Read more »

Jez
Jez
8 years ago
Reply to  El Nerdo

Right – but over half of that needs budget is mortgage payment, and the costs of moving and trying to sell the house in this market will be prohibitive (a friend of ours tried and failed). We’d have to pay back our first time homebuyers tax credit. And while we’re trying, we’ll be paying mortgage as well as rent. We can’t refi due to our equity state (not underwater, but we’d incur PMI, which adds a cost up front as well as the monthly payments). Similarly, while a cellphone contract typically costs more than pay-as-you-go, getting OUT of one isn’t… Read more »

El Nerdo
El Nerdo
8 years ago
Reply to  Jez

Yeah, basically you’ve trapped yourself into a tight situation. That’s going to make it tough, and it will take time to arrive to your desired destination, but it doesn’t mean you’re damned for life or you can’t adjust as you go. What I’d do with such commitments as you have would be to emphasize savings and learn to have cheap fun as the no-fun PF gurus recommmend. This isn’t Warren’s school of thought, however, so don’t blame her for it. You’ll have to do “what works for you” of course. And there are no magic effortless solutions, but one suggestion… Read more »

amber
amber
8 years ago
Reply to  Jez

Jez I think the chorus here for you is to increase your income. Time to get creative!

Diana L
Diana L
8 years ago
Reply to  Jez

Or you lower your housing expenses by doing something “undesirable” like renting out a room and collect boarding income.
There are always ways to make things happen for those who don’t hide behind the “can’t”s.

Sam
Sam
8 years ago

We have a fun fund, $50 goes to it each month. Sometimes we use the fun fund when we travel, but more often it ends up being used for tickets, i.e. ballet tickets, concert tickets, show tickets, etc. Something that it outside our normal budget for fun, we have lots of fun day to day but its normally low budget fun. One time I used the fun fund to schedule a fishing trip for Valentine’s day for my husband, that was a great day!

Brian
Brian
8 years ago

Great post! I like your point: “Being smart about money shouldn’t mean worrying about it all time.” That seems like the point of having a spontaneity fund in the first place. As you said, you weren’t worried about the cost of the premium seats or overpriced beer…you were able to enjoy the game. I’ve found that when I go out to dinner on my credit card when I know it’s not within my budget the food just doesn’t taste as good 🙂 I’m currently working on setting up this type of fund myself. First things first though, I want to… Read more »

PB @ Economically Humble
PB @ Economically Humble
8 years ago

My partner and I also have an account for “travel” where we save for any sort of fun travel. This slush fund is great during summer months, especially when last minute deals come up.

Alan | Life's Too Good
Alan | Life's Too Good
8 years ago

Hey Tim, to use one of my favorite expressions from the deeply philosophical film ‘Dumb & Dumber’… “I like it a lot”. Well it’s better than saying great post – but it is. What a nice idea to have a spontaneity fund. I would have liked to see your version of the pie chart though. I have a version of this which I wrote called ‘Simple Not Cheap’ on my site which pretty much talks about if you cut out waste entirely and focus only on what you really need then you’re less likely to have to be cheap when… Read more »

Anthony @ Each Peso Counts
Anthony @ Each Peso Counts
8 years ago

I’m sure a lot of people reading personal finance blogs are aware that at some point in their pursuit of financial peace, they just wanted to save for a lot of different reasons (emergency fund, pay down debt, savings) but one “envelope” that i dont forget to put money in, is my FUN envelope. Helps keep me sane from all the saving and frugal practica that i do.

-Anthony

cathleen
cathleen
8 years ago

I use Quicken Essentials for Mac and I love it, now that I figured out a few tricks….

Our budget looks like this (for the next 1 year until past business Debt is paid off):

Mortgage 25%
Debt 25%
Household 25% (aka Life)
Savings 25%

After Debt is paid off I’d like to add that 25% to the Savings bucket, as 25% for Household turns out to be plenty for us (no children).

Lisa
Lisa
8 years ago

I like this concept. We’re currently pinched quite tight, but I manage to do a version of this on a smaller scale. My partner and I each get $50 a week to cover our fun/discretionary costs (coffees out, toiletries beyond what’s at the grocery store, clothes). I try to set a few dollars aside every month into a “rainy day” fund (I aim for $15 to $20 a month). I tend to use my regular fun money for experiences such as eating out or exercise classes, and my “rainy day” money for larger items I’d like to get, such as… Read more »

Jenna, Adaptu Community Manager
Jenna, Adaptu Community Manager
8 years ago

I’ve been struggling with this the last couple of weeks in a different form. I recently bought a fixer house and have been working full time and spending my nights painting, cleaning, redoing the hardwood floors, etc. Once a week, I’m irresponsible and do something that doesn’t involve the house, go skiing, watch a sports game, etc. It still bugs me but ultimately I have the rest of my life to work on the house and only the opportunity to go skiing a couple more times this season. It’s all about balance it seems.

Carl Lassegue
Carl Lassegue
8 years ago

Great article! Thanks for showing us that you can be frugal and still have spend money for spontaneous fun once in a while.

TK @ Smart Finance 101
TK @ Smart Finance 101
8 years ago

I went to that game on Friday. As a Mariners fan, it sucked big time. We were out of the game by the second inning so I spent much of the time in the beer garden. I wish I would’ve gone to the Saturday game instead to witness the perfect game.

Lori Blatzheim
Lori Blatzheim
8 years ago

Hi Tim,

What a great idea! I am going to pass it along to the Seniors I write for in Retire and Renew, http://www.retireandrenew.com.

Don’t sell Seniors short. They spend what money they have on their children and grandchildren. What they need is permission to spend it on themselves.

I agree with you, what is life if you can’t spend a little money to do something for yourself.

still working
still working
8 years ago

El Nerdo – if debt repayment is relegated to Savings, does that mean a mortgage payment would also be Savings? What about a HELOC?

Jez
Jez
8 years ago
Reply to  still working

I’d say that regular payments to a mortgage are Needs, since if you don’t make them bad things start to happen. Any extra payments would be savings. I would look at a HELOC the same way – but I haven’t read the book.

Susanne
Susanne
8 years ago

My spontaneous/ no-guilt money comes from my $10-a-day allowance. In the evening, I put any leftovers in my five saving envelopes- $1 in each of my savings, my son’s allowance, Christmas spending $, debt repayment and giveaway (missions) in that order. If there’s still some left (and there usually is) it goes in a separate envelope just like free money!

Elk Herder
Elk Herder
8 years ago

My husband and I have one of these. We call it Mad Money and put all the unspent money for our weekly cash budget into the fund. It makes It really easy to spend on fun, spontaneous (Mad!) things without feeling guilty or dipping into funds for other purposes. It’s also a great way to keep us from over-spending on spontaneous things.

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