How to Save Money for Fun
Summertime is fun time at our house. Not a lot of progress is made on business, personal or home improvement goals. Instead, we jam pack the summer with fun. It’s what we like to do as a family and summer just seems to naturally flow toward travel, recreation, and relaxation. And, with so many outdoor activities around us that are free, this helps us do more. But, of course, there is planning, preparation, and budgeting that has to occur outside of summer to make it all happen. So today I want to give you some tips and pointers on how I save and plan for fun. The goal is to save enough that you feel you are having a great time enjoying life without having to finance it on the credit card, or worse, opting for no fun at all. Neither option makes life enjoyable. So here’s your blueprint for saving for fun.
Summer planning starts in December of each year when I revise and update my monthly spending plan, short-term savings buckets, and net worth statement. Each of these documents plays an important role in planning for fun. So, if you don’t have a monthly spending plan (budget), short-term savings account (money buckets), or a net worth statement (what you own vs. owe), let’s set up a call here: Free Q+A with UPF
For my monthly spending plan (budget), I review numbers to see if any costs increased over the year for mandatory expenses like utilities, transportation, taxes, etc. How do I best align income with expenses going forward in the new year? I make adjustments and see how much I can contribute monthly to my short-term savings and money buckets. I set our family up for success in the new year by first adjusting my monthly spending plan.
Then, I look at my short-term savings and money buckets. This is my savings account for things that are not monthly expenses, but pop up over the year and need to be funded. Think car maintenance, vacations, gifts/holidays, taxes, home repairs, etc. Did I spend more in certain categories and less in others? Are there things I want to accomplish in the upcoming year that require money to make them happen? If so, I make a money bucket category for them and track them in a spreadsheet. My money bucket balances always align with the balance in my short-term savings account. Summer fun money buckets for us include travel, activities, entertainment, kids camps, memberships, sports/equipment, and increased costs for regular expenses like gasoline and dining out. I make my numbers in the short-term savings spreadsheet align with the total annual amount I will be contributing from my monthly spending plan. This activity and planning session is the secret sauce for saving for fun. If you aren’t contributing enough to your money buckets by depositing monthly into your short-term savings account, you need to revise your monthly spending plan. How do you make more and spend less to ensure you are saving appropriately for the fun you want to have? Both documents are mission critical if you want to save for fun and not wind up with a painful credit card bill or simply opt out of fun because you don’t think you can afford it. Make it a priority to save for what you value to make your life rewarding and enjoyable. It just takes an annual review of your numbers to be set up for success.
My final step for planning for fun at the end of the year is to update our net worth statement. Looking back and doing a recap is another fun and rewarding thing my spouse and I do in December. Did we increase assets (things we own)? Did we decrease liabilities (things we owe)? Did we increase our net worth? Did we make fun happen for the family? If so, we celebrate. If not, we make revisions. Either way, the idea is to know exactly where you sit financially and make plans to increase net worth in the coming year while also having fun. Our goal is to always move the needle forward, but not at the expense of doing things that bring pleasure to our lives.
One final tip: Make a list of fun free activities you can do. Then, do them. If you can come up with 12 free activities, you have one per month. It only takes time, not money, and often the memories are priceless.
If you enjoyed this article from Upward Personal Finance, share it with your friends. If you’d like to schedule a free Q+A with Kasey of Upward Personal Finance, click here. We also have a free coaching session live on Facebook each month. Click here for more information on Fridays, Friends & Finance on Facebook.