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Wondering how much you can responsibly spend on fun this summer - or any time of year? Here's exactly how to figure it out - down to an exact number.

The hottest personal finance trends these days are all about guilt, but that doesn’t mean you can’t afford to spend on fun things.

Whenever you see a viral article about money, it’s probably because someone (cough, rich dude, cough) is telling you how they made their millions, and what you’re doing wrong with your spending.

But I’m here to tell you that you can be great with money and still spend money on fun.

Lots of the spending-guilt trend pieces (lattes! avocado toast!) focus on spending that comes out of what I call the fun budget.

Going into summer, you’re probably staring down a season of fun, and yes, a lot of it will cost money.

But how much can you reasonably spend on fun in a given month, while still being a responsible human who can laugh in the face of trend pieces?

Ten percent of your take-home pay.

Well, that was easy.

That number comes from a budget that looks at how much you “should” spend on each category in your budget based on percentages of your income, so before we go any further, let’s dive into that quickly.

Breaking Down the Percentage-Based Budget

A percentage-based budget is exactly what it sounds like: You apply a set of percentages to your total take-home income, and it gives you guidelines about what a reasonable amount would be to spend on each category of your budget.

You’ve heard of this if you’ve ever heard someone recommend that you spend 30% or less of your income on housing. This is that!

So to dive in, how are we ending up at that 10% recommendation for your fun budget? Here’s the full breakdown of the expert-recommended budget that comes from.

  • Housing – 30%
  • Transportation – 15%
  • Food – 10%
  • Fun + Life – 10%
  • Savings – 20%
  • Debt – 15%

So all you have to do to figure out what the real, actual numbers are for your life is to multiply your take-home monthly income by each one.

For example, if you make $3000 a month after taxes, your fun budget would be $3000 X 0.1 = $300.

Easy, right?

A Note of Caution

There are times when this budget framework breaks down.

If you make very little, or you make a ton of money, these numbers might break down and not fit with how much you need to spend (or want to spend) on certain categories. That’s OK – they’re just guidelines, and they work best if you have an average income.

But if that is you? Here’s your next step.

Implementing It For Your Fun Budget

Before you run away into the sunset with your fun budget based on the recommended percentages, you should check on some key things.

First of all, do your other expenses line up with the recommended totals? If you’re spending more than half of your income on rent and utilities, your other categories of spending are going to have to scale back to accommodate your higher housing spend. So go take a quick look and compare your known expenses, to see if they fit into your percentage-based budget.

If all systems are a go, and you can rock a 10% fun budget? Amazeballs.

If not, and you need to scale down, do a few quick calculations and find a percentage to spend on fun that won’t leave you without the money you need to cover rent.

Keeping Tabs On It

So you’ve got a number in mind, and visions of lavish fun spending dancing in your head. (Gimme that avocado toast, am I right?) Let’s keep going with our previous numerical example, and say you’ve got $300 allocated to fun spending for the month.

Now, you need to track your fun spending.

This is a non-negotiable too, so do not pass go, do not collect your fun budget, you have to do this part. Tracking your spending sounds like a hassle, but it’s the only way to know when your spending on fun stuff hits the critical point where one more latte will put you into over-budget territory.

You’ve got two main options: Use an app or DIY.

If you want to use an app to track your spending, you’ve got a lot of options out there. You can use You Need a Budget (YNAB) for a $5USD monthly fee, connect your accounts to Mint for free, or use something like Koho to automatically keep track of your spending.

Related: You Need A Budget vs Mint

If you’re going with an app-based approach, the most important thing to look for is notifications. Specifically, you’ll want the app to send you an email or a push notification on your phone when your spending is creeping up on your total budgeted amount – and again when you officially hit that number.

If you’re tracking manually, I salute you, because it’s the hands-down most powerful way to manage your money. All you need in this case is a spreadsheet, a file or a notebook, and a commitment to write down and add up all of your spending as it happens.

You’ll quickly start to see patterns in your spending and be able to identify the exact moment where your fun spending tips over into omg-I’m-over-budget territory.

Then, Plan For Hitting Your Budget

If the moment you hit your budgeted number is the most important one for your money, the second most important moment happens right afterwards: What will you do for the rest of the month now that you’re out of fun money?

Making a plan for that very, very likely situation is something you really need to do ahead of time, so you’re not left scrambling to figure out what to do when it’s only the 13th and you still have dinner plans next week – but no “fun money” to cover them.

You’ve got a few options, including…

  • The hardcore, cold-turkey approach. When you hit your budgeted fun number, you cancel and hold off on all fun spending for the rest of the month. (This is by far the most extreme and the hardest approach, FYI.)
  • The cutting-back-in-other-areas approach. If you’ve got non-negotiable fun expenses coming up, and you have a good sense of the rest of your budget, you could always move money around from other spending plans to cover the fun-budget shortfall. The prerequisite for this approach is, obviously, being able to control and change your spending in other areas.
  • The cover-the-shortfall and then adjust approach. This isn’t a long-term solution, but if you have savings earmarked for things like vacation or gifts, you could dip into them to cover this month’s fun budget shortfall. If you do take this route, just know that it’s a pretty big red flag – you need to figure out a more long-term solution, and seriously look at your spending.

Forecast Your Spending

Ok, this sounds super complex, like I’m asking you to do financial projections, but it’s actually super simple, and well within your skill level. Trust me.

At the start of the month, take a look at a monthly calendar – ideally, the one you use to plan your time anyways. Maybe it’s a paper planner, maybe it’s Google Calendar, but whatever it is, use it to answer the following questions.

  • How many weekends are there this month?
  • How much do I spend on an average weekend on fun? (Lattes, brunch, etc.)
  • How many commitments do I already have this month? (Dinners out, birthdays, etc.)
  • Approximately how much will each one cost?

This should give you a rough idea of how much of your fun budget is already accounted for this month. That information will be hugely helpful when it comes to saying yes to additional plans, and keeping yourself on track to avoid overspending.

And hey, if you need to say no to some plans to make the numbers work? That’s totally fine. Here’s exactly how to do it gracefully.

Article comments

1 comment

Although I love personal finance I have to admit I’m not one to track my spending. I’ve always used the reverse budgeting approach. Take my paycheck and remove savings first, then set aside $ for my fixed monthly expenses in a separate account, then use the rest for daily spending.

I set the amounts using my budget but I don’t track my spending. I just keep an eye on my daily spending account to make sure I have enough until the next pay day.