Budget For "Fun Money"?

GUEST BLOGGER: ELIZABETH DAVIS, USU EXTENSION ASSISTANT PROFESSOR

As part of a parenting experiment, my parents instituted a monthly allowance. As an 8-year-old, I was thrilled to have some money of my own to use however I wanted. I enjoyed the feeling of freedom and endless possibility that came with those dollars. Unfortunately, due to being part of a large family and budgetary limits, it was a short-lived experiment. While actually receiving allowance in my childhood was a short-lived experience, I did learn a lesson that has been valuable to me throughout my adult life and here it is, “having some personal money is important.” ​

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Creating a line item in your budget for an “allowance” or as finance expert Dave Ramsey calls it, “fun money” can help you maintain your financial goals. “When you treat yourself a little, you’re less likely to fall off the goal-crushing wagon completely. It’s like the one cheat meal of the week or the night off from running” (Dave Ramsey)
 
When determining what your allowance should be, make sure that it is a number that is reflective of your financial situation. If you are only able to set aside $10 a month right now, don’t get discouraged; this is temporary, and if you are able to budget $100 a month, that’s great.
 
Regardless of what you are able to allot for personal allowance, remember that just like my childhood allowance when the money is spent, it’s gone. Don’t derail your financial goals by spending money on fun that has not been allotted for that. Instead, enjoy the feelings of freedom and possibility that comes with having money that you can use, however you want! 
  
​Want more on how to manage your personal allowance? Watch this video!

​Elizabeth Davis loves the variety that a career in Extension brings. She particularly enjoys teaching relationship skills, money management, and STEM. She loves spending time in the sunshine and being with family and friends.