How to create an entertainment budget with your finances
Finances often cause a rift in people’s relationships, overall well-being, and mental stability. While this may be true for your personal situation, there are certain things even the stingiest people won’t budge on. One of those things could be having an entertainment budget each month.
An entertainment budget consists of ‘wants’ instead of needs such as:
- Eating out/ordering in
- Date nights with friends or at a family restaurant with kids
- Hosting parties
- The spa, hair salon, or nail salon
- Shopping in person and online
- Attending a play or event
Of course, it’s up to each person to define what they consider ‘entertainment’ but in short it’s everything else you want to do that’s not a necessity (though you may feel it is).
How to create a budget
As you divvy out your money each month, it’s important to keep a household budget so you know where your spending and where you could be saving. For instance, if you’ve created a budget but do not include the monthly gym membership that’s costing you $20 each month, that’s a problem.
The easiest way to create a budget is to list every expense you have for the month and then categorize them. Common categories could be utilities, rent, loans, credit cards, auto, insurance, food, entertainment, pets, or medical.
As you move things into your categories, add up the total amount you have budgeted and make sure it’s less than your money coming in. If it’s not, that may be why you have outstanding debt, a small savings account, or aren’t able to enjoy things you wish you could because you don’t have the funds.
Next, it’s important to find areas where you can cut costs. If you’re hiding your gym membership monthly fee and not using the service, it’s time to cancel it. Are you not using the Netflix account you pay for or do you have another subscription service you haven’t indulged in for at least 30-days? Cancel it.
After you’ve canceled non-used services and cut costs where applicable and still have cash left over, consider moving those funds into a savings account or allocating them to a category you need more funds to cover such as entertainment.