For most people, spending on leisure is an afterthought. They don’t usually make it part of their budgets. Some of them even resort to taking out loans from a money lender Singapore to afford the fun things they want.
Most people have this idea that it’s okay to scrimp on leisure spending because it’s “not that important”. But this has risks. Here are four reasons why it’s better to have a fun fund than scrimp on it.
It helps you avoid overspending
If you have a set budget for doing fun stuff, you would know your limits. In turn, this prevents overspending on leisure activities. You only have a set amount of money per month that you are willing to spend on entertainment, dining out, shopping, going out with friends, and the like.
If you scrimp on leisure activities, you have much higher chances of overspending. For example, let’s say you hold off on leisure spending this month. Fast forward to next month, and you see a flight to one of your dream destinations on sale. Since you didn’t spend anything on leisure last month, you say it’s fine to spend extra this time around, so you buy the ticket.
Then, once you get home and evaluate your finances, you realize that you’ve spent too much on the instant vacation. More than you would have wanted to spend for two months on leisure.
That’s the danger of scrimping. You could overcompensate for ‘lost time’ later on and ruin your budget.
You can plan leisure better
Haphazardly spending on leisure activities is a sure way to financial trouble. Impulse buying and emotional purchasing are often the culprits of overspending. But if you have a fun fund, you know exactly how much you can spend on leisure.
You can then plan leisure activities ahead of time. You would know when you can book a trip to Bali. You would know when you can afford the new iPhone. You would know what restaurants you can afford to dine out this month.
It gives you something to look forward to
When your leisure activities are planned out, you always have something you can look forward to.
Let’s say you’ve determined that the best time to book a Bali trip is three months from now. You’ll then have the motivation to work, earn, and save for that trip. In three months, when you’re already in Bali, you will enjoy the holiday a lot better. And since you’ve planned it, you can also avoid blowing your budget while you’re on holiday.
It allows you to prioritise your mental health
The best part about a fun fund is it’s good for your mental health. As the saying goes, “All work and no play make Jack a dull boy.” The same way, you need ‘play’ or leisure as well. Otherwise, you wouldn’t just become dull by working too much; you will burn yourself out.
A fun fund helps you integrate work-life balance into your budget. By setting aside money for leisure, you can recharge every now and then. In turn, you will have more strength and motivation to fulfill your responsibilities in life. Cutting costs in other areas—like switching to an affordable electric company—can also free up room in your budget to support your mental health and fun fund goals.
Conclusion
Setting up a fun fund definitely helps you a lot. With leisure as part of your budget, you can plan your entertainment, shopping, dining out, trips overseas, and hobbies. You’ll also avoid the trap of impulsively spending too much on leisure.
