Pay yourself first. This is one of the most basic principles when it comes to money management. It is important to save a certain portion of your income on a regular basis to achieve financial freedom. Part of this is setting a personal monthly budget. Call it “fun fund” if you want. After all, it’s your savings and you can freely use it anytime.
Why do you need to set up a fun fund?
Some people say saving money is hard to do, but with a fun fund, you will not feel deprived on things that you want to do and buy. Think of it as a reward for your hard work in properly managing your income. The fun fund can give you a sense of accomplishment and help you to stay motivated to save more money.
How do you start?
Decide how much money you can allot for this fund per month and then commit to it. It does not have to be a huge amount, as it is very difficult to maintain especially at the beginning. The key is consistency. Make sure to set aside whatever percentage of your income on a regular basis. Once you’ve developed the habit, you can gradually increase this percentage. Additional sources of income will also help build this personal monthly budget.
Where can you use your fun fund?
It’s called “fun fund” for a reason. That’s your money that you can spend on anything that you want – new clothes, gadgets, shoes, etc. You can go on a short holiday or eat at that new restaurant you’ve been eyeing for months. Have fun spending it. You deserve it.
How can it help you save money?
If you consider the entire picture, having a monthly fun fund will encourage you to spend only what you have allotted for that fund. You can use it in any way you want, but it will let you develop the habit of spending only what you can afford. Since you have a limit every month, you can effectively plan and wisely decide on where to spend your money.
Setting a personal monthly budget is an essential part of money management. This can make you feel special since you can buy and do anything, but more importantly, it will greatly help you in maintaining a good financial mindset that saving money need not be a difficult thing to do.
How much do you currently spend on entertainment and discretionary items? How much will you spend
now? Meet us in the comments and let us know!
Setting a personal monthly fun budget is an essential part of money management.