You might have caught onto the fact that at TenBridge Partners, we like to have fun. Whether it’s throwing events, traveling across the world, or having “fun” money in our pocket each month – we recognize fun is an instrumental part of a healthy financial life.
Fun money goes by many names: “discretionary” money, “wants” expenses, or like Erik calls it, “MAD” money. No matter what you call it, the idea is the same. Fun money is your excess income after your “needs”, or basic necessities, are met.
Fun money may include eating out or ordering in. Might be travel, entertainment, gifting, or simply cash in your pocket to spend on things that bring you joy. For me, fun money means going to the movies when a new Marvel movie is released, date nights with my husband to a new enticing restaurant, or thrifting with a friend to hunt for special finds. Lately, it has also meant getting a pedicure since I can’t reach my own toes anymore thanks to my growing pregnancy belly!
When crafting a financial plan, we ask all our clients to complete a budget. Through the budget, you separate your “needs” expenses from your “wants” which helps facilitate discussions and recommendations in your financial plan. The budget helps identify where your money is going, including how your fun money is used. Sometimes the budget exercise encourages changes in your spending habits or how you structure your expenses.
When evaluating how to structure our discretionary spending, a valuable concept is to allot yourself (and your partner, if applicable) an “allowance” each month to spend on whatever you please. Providing an allowance sets spending parameters for your fun money and discourages overspending so you can meet your savings goals or other financial objectives.
With couples, an allowance also removes judgement from each other’s spending decisions. While I might spend my allowance on a pedicure, my husband might spend his on the newest version of his favorite videogame. Overall, an allowance can do wonders for your budget and your relationship. You could also take it a step further to provide another layer of privacy and set up separate bank accounts for each partner where your fun money is deposited each month.
Aside from obvious reasons, fun money is an important part of any good budget because it helps us strike the balance between working toward our goals and feeling content in our daily lives. Similarly to establishing an exercise routine, eating habits, or even our work schedule – we cannot be “on the ball” 100% of the time. It is simply not human. For any routine or system to be sustainable, there are ebbs and flows, there are highs and lows, there is harmony. Through providing ourselves with fun money to appreciate the fruits of our labor and enjoy today, we can find the balance that will keep us on track to meet our goals.
In sum, consider what fun means to you and how you could structure your budget to assure your needs are met, your goals are being achieved, and you’re also having fun.
At TenBridge Partners we encourage you to enjoy today while honoring tomorrow and fun money is just one piece in the puzzle of life. Let us know how we can help you find confidence and clarity in this otherwise confusing world.
About TenBridge Partners
TenBridge Partners is an independent financial planning and investment management firm based in Portland, Oregon with a simple focus of honoring the fiduciary responsibility of putting clients first.
Planning is central to everything we do. Our focus is on a complete understanding of a client’s and potential client’s needs through the financial planning process, before we move forward with anything else.
We bring clarity and confidence to an otherwise confusing financial world.
We are about people.
From the desk of
Sirra Anderson Crum CFP®
The information contained in this correspondence is intended for general educational purposes only and as a means for facilitating a conversation. Please consider our door always open to discuss your particular situation and how this information might benefit you and fit your specific needs.