How Fun Money Keeps You On Budget

Disclaimer: The statements made in this post are the opinion of the author. They should not be viewed as financial advice. Please consult with a financial specialist before making any financial decisions.
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Are you getting a little to excited about money? Particularly saving money?

Did you start with the Dave Ramsey gateway drug and now you’re living a minimalist lifestyle striving to be frugal in every way?

Or maybe you’re burnt out at work and now you’re trying desperately to get out as soon as possible and you’re pinching every penny to do so.

If this sounds like you, you might need to hear about the importance of fun money.

Perfectly whimsical and pointless cash that can be the difference between steamrolling your way to freedom and running out of steam.

Yep, the key to success is to just have a little fun.

Photo by Karolina Grabowska on

What Is Fun Money?

Fun money has a lot of different names. It can be your whatever money, your frivolous money, your allowance, etc.

Basically, it is money that is there to be spent without accountability.

Not that you are allowed to go over budget, but you don’t have to explain or justify why you bought something.

Having fun money is a great outlet for those spending urges we all get while keeping your budget in control.

If you are in a relationship, another piece of advice is to make sure that each person in the relationship has their own fun money. That way you can blow it on whatever you want without having to even talk about it with your partner.

This reduces money fights and puts limits on random spending.

How Fun Money is Different Than Your Entertainment Budget

Some people might think that fun money is the same thing as an entertainment budget. That is not the case.

Your entertainment budget, if you have that category specifically, is to spend on things that are entertaining.

That can include watching a sporting event, going to the theater, paying for a Netflix subscription, or going to an amusement park, etc.

This is a set amount that you have each month to do those things, and there should be accountability for how you spend it as with any part of your budget.

Fun money can be used for anything. Do you want some random, unnecessary blender attachment? Fun money. How about a fancy birthday dinner? Fun money. Or to save up to buy a new gun, tool, purse, or trampoline. All of that can be fun money.

By using fun money to do random things that aren’t necessary but are still fun you are creating a release valve for your strict money habits that keeps you from going crazy. More on that later.

Our Approach To Fun Money

For years our budget just seemed too tight to have any fun money. We were buying the necessities only and spending any extra money we had on visiting family.

While buying necessities and visiting family are very important, not putting money aside for fun put a damper on our relationship and made saving money more stressful.

Now that we’ve realized that, we have set up an exact budget for ourselves and different categories are paid from different sources of income.

Steady W2 income is used to pay bills and cover the necessities. Variable side job income is used to save and invest for the future. And other extra income is used as fun money.

Specifically, my wife started working a flexible part time job from home and we’ve dedicated all of that money to fun money.

With that money literally sitting outside of my income vs expenses calculations for our basic budget, we can just track how much of it we have separately to make sure we don’t overspend and suddenly we have money to spend on random stuff without the guilt of “spending away our retirement”.

While a more hyper focused person might point out that that money could save me months or even years of work if invested, the peace of mind and the surety of staying on course is more important to me than getting there quickly.

Why Using a Side Gig Is the Best Way to Make Fun Money

In my mind there are different levels of work. There is main job as an employee or freelancer which is usually the main source of income. That is followed by a side job which is building substantial income on the side, and then there is the side gig which is just a way to make a bit of extra cash.

An ideal situation is to use a side gig for your fun money because it is less dependable and smaller than your regular income.

By consistently using your regular income (including side job income) for your needs and future planning you have a set amount that you can use for those things making it is easy to plan for.

Then you can use whatever side gig money you happen to pull in to pay for the frivolous stuff without mingling it with your bills AND there is only so much money you can make with a side gig so your frivolous spending is kept in check.

Ideas for easy side gigs are things like DoorDash, driving for Uber, pet sitting on Rover, shopping for InstaCart, etc. which lets you make a little bit of money when you feel like working.

How Fun Money Helps You Stay On The Horse

It seems like every day a newer better diet comes out on TV. It is all the rage, and then it sputters out and dies.

That is because dieting is incredibly difficult to maintain long term.

While I have never been much for dieting, my favorite concept in dieting is the “cheat day”. This is a day, maybe once a week or once a month, when you can break your diet.

Having that as a day to look forward to and a day to take a break from the rigors of a diet make it easier to keep dieting.

Fun money can serve the same purpose.

Sticking to a tight budget is really hard. Anybody can boot strap budget for a few months or even a few years, but after a while it gets harder to maintain strict rules.

If you aren’t careful you will burn out and stop budgeting.

But, if you instead set up your budget to automatically cover your expenses, and place some fun money to the side, you have the release valve that allows the rest of your budget machine to stay on track.

Having random spending money is also extremely helpful if your partner isn’t committed to your vision or you have a spender in your relationship.

So when you’re putting together your budget, don’t forget about fun money!

How much fun money do you want to put aside in your budget? How do you plan to earn your fun money? Tell me about it in the comments below.

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