Set Aside Some Money for Fun: Rule 8

This is Rule 8 in my 10 Rules to Eliminate Debt and Change Your Life

Much like Rule 7, we are beginning to enter a maturity phase in our personal finances. If you recall, Rule 7 talks about planning in advance for large, expected expenses so that they don’t disrupt our debt payoff plans. Rule 8 also gets us thinking ahead and allows us to be human, and have some fun.

If you are deep in debt, you may not be ready for a full-scale implementation of this rule. What I’m saying is: if you have a ton of consumer debt, you probably shouldn’t be planning an extravagant vacation (unless you are committed to a long timeframe of saving).

This rule can be applied monthly or more sporadically. You could set aside $30 each month to simply take your significant other to a nice dinner. Or you could save $50 each month for a modest getaway once a year.

So Why is this Rule Important?

I used to be a hardcore follower of Dave Ramsey. If you are familiar with Dave’s teachings and teaching style, you know he is pretty adamant about “living like no one now, so you can live like no one later.”

Essentially this means have no fun when you are young, and possibly have fun when you are old.

The problem with this is that it is….well, no fun.

What is the point of living and working if you don’t have some freedom to play? I believe the true path to financial freedom DOES NOT involve depriving yourself of joy for the sake of money. Doing so gives money too much power over you.

A person who is truly in control of money can harness it as a tool to build the life they want, not the life Wall Street tells you to live.

I still like Dave Ramsey and think his overall message is good, but he is a mouthpiece of money myths. The only way he’d ever let you retire early is if you somehow managed to save $2 million.

So What Changed with My Mindset?

I was introduced to the doctrine of conscious spending by Ramit Sethi. He talks a lot about automating your finances and making decisions in advance on how your money is going to fit with your priorities. In a nutshell, it allows you to be miserly in spending on things you hate, while affording you the freedom to spend what you want on your hobbies.

If you are a comic book superfan, who am I to tell you that you shouldn’t put aside $40/month to attend your favorite convention? Doing so would only make you resent your choices and would likely cause you to revert to your old free spending ways.

So How Can this Work?

First off, if you haven’t mastered the previous Rules, don’t even try this.

If you haven’t been consistently spending less than you earn and shrinking your debt each month, you should probably think about depriving yourself of some fun. You are probably having too much fun.

But if you are making great progress, shrinking your debt and generally making big changes in your life, you have your own permission to think about budgeting for fun.

This is exactly what we are doing.

We are not debt free yet, but we are saving for a $5,000 vacation.

Why? Because it is a priority in our life – period. By skipping the vacation we could be debt free 2 months earlier, but would miss the window in which we could take such a trip. That would mean we’d be looking at next year, or even longer.

This was a risk we aren’t willing to take. In a nutshell, I am willing to delay debt freedom by two months to take this trip.

And you can’t tell me I’m wrong because I only answer to me. And you really only have yourself to answer to.

That being said, we are taking this vacation by:

  • Saving in advance
  • Not accruing new debt
  • Maintaining our debt payoff schedule

If you are able to work in fun in a responsible way, go for it. If you choose to delay fun until you are debt free, that is a great choice too. The important thing is that it is YOUR choice, YOUR life, and you must live with your own decisions.

Personal finance is mainly about psychology, not money or math. Getting control of your money is more than a math equation – it is about the role money plays in your life and whether or not you are disciplined enough to make your money work for you.

 

10 Rules to Eliminate Your Debt and Change Your Life

1. Combine Incomes, Finances and Efforts 

2. Spend Less than You Earn

3. Make a Monthly Debt Budget and Live by It 

4Pay Off Debts Smallest to Largest, Regardless of Interest Rates

5. Make Big Changes for Big Results 

6. If You Don’t Need It, Sell It 

7. Save Monthly for Large, Anticipated Expenses

8. Set Aside Some Money for Fun

9. Pay Off Debts Before Investing 

10. The Goal of Work is Retirement 

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32 thoughts on “Set Aside Some Money for Fun: Rule 8

  1. I totally agree with this advice John. Money isn’t so important that it needs to take over our lives and prevent us from actually doing the things we enjoy. Budgeting for some fun is a must, but you’re right that it probably should be limited a bit when dealing with massive debt. You just have to find a healthy balance where you aren’t depriving yourself.
    Modest Money recently posted..My First Childhood Exposure To GamblingMy Profile

    • Thanks MM – replacing extreme behavior with more extreme behavior probably isn’t the way to go – thanks for your comments!

    • Thanks FF! There’s nothing like waiting for the government to tell you they are done squeezing all the productivity out of you and giving you permission to retire. Thanks for your comment.

  2. I agree 100%

    Putting a little bit of money aside for fun while paying off debt helps maintain a sense of balance, which is important to learn. A lot of people didn’t have this balance when going into debt, so learning it while digging out of debt will help prevent them from going back in again.
    Cassie recently posted..Double or NothingMy Profile

    • That’s a great point – lack of balance probably got you in debt, and will make trying to get out miserable as well. Having something to focus on besides money really helps. Thanks Cassie!

  3. No doubt, you gotta have fun! I think it helps to try to avoid getting too attached to fun that’s costly (golf, skiing) and understand that spending money and having fun are two wholly different things, right? Some of the most fun nights I’ve had (okay, maybe I’m a little boring for some of you 🙂 ) were sitting around a table with good friends playing card or other games. Cheap fun!
    Kurt @ Money Counselor recently posted..Beware IRS Form 3949 AMy Profile

    • No, I agree. I always have more fun just having a good time with friends as opposed to going out and spending money. A great point about golf and skiing. Those are rich man’s hobbies, so if you are poor, play soccer or basketball – all you need is a ball. Thanks for reading, Kurt.

  4. There are many instances when people save so much that they compromise on basic needs. I know people who invest so much into real estate that they get cash crunch. They compromise on insurance etc. which is so important.

    Thanks for bringing out such an important topic – the Rich Poor

  5. “All work and no play makes Jack a dull boy” – The Shinning

    Having fun is something people really forget about when they think about their finances. My wife and I make a point to take out $50 per paycheck each week to do whatever we want.

  6. This is the main place where I end up in a verbal fisticuffs with most debt payoff enthusiasts. In our debt repayment plan I still set aside some money for entertainment. It can be used for dinner out or even pooled for a small weekend at the coast. As long as I’m not putting that on credit, it can be a needed break, and the difference between us staying on our repayment schedule or giving up. I think of it as be debt-free insurance.
    Andi @ MealPlanRescue recently posted..Planning Meals When You’re SickMy Profile

  7. I’ve been following Dave Ramsey for some time, and much of his personal finance strategies are sound. However, just like you, I do take issue with his suggestion that you have to give up joy today in order to have it tomorrow. It just seems to be too much to ask people to spend years being miserable just so they can have future financial security.

    Instead, it’s best to save not only for your golden years tomorrow, but also save for enjoyment today. Just my thoughts on the subject.

    I really need to read your previous rules.
    Anthony Thompson recently posted..Self Manager – How to Manage Your Own Anger Without TherapyMy Profile

  8. This idea seems so straight forward but for the life of me i don’t understand why i bought into it for such a long time. It must be because …”Everyone else was doing it” so i just thought it was the right thing to do. Anyways, i love that you are spreading this new way of thinking about time and money. One day it might just be main stream but i doubt it.. the best we can do is keep spreading the word and teach our kids the same things we ‘re preaching.
    Annie Andre recently posted..The Secret To Long Term Travel and a Location Independent Lifestyle pt#1My Profile

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