I read a lot of personal finance blogs every week. These sites are amazing sources of information and I’ve definitely gleaned some valuable money management ideas from bloggers who are kind enough to share their secrets with others. I particularly love when people post their monthly budgets because I get to see exactly how other people are taking care of their financial goals, each month. From their mortgage payments, car payments, to the amount of money they tuck away in emergency funds and for retirement, it’s all right there for your learning enjoyment. I find it inspiring.
But, the thing I always find amazing, or maybe it’s shocking, is that so few of these people make room in their budgets for ‘fun.’ Nobody said thrifty living is all work and no play, but people often confuse frugality or good money management with deprivation and zero enjoyment. This just isn’t true. Life is short and I plan to maximize my time here on earth. There are a lot of places I want to see and a lot of things I’d like to do, which I think is pretty typical of someone in their late 20’s. But, I refuse to go into debt to have a good time, so how do you find a balance?
Last week,
we talked about Generation X and the Millennials and we introduced you to 
one
young blogger who definitely has her head screwed on when it comes to money. This
week, we’re featuring another young woman who’s already figured out how to
balance the financial demands of everyday living and still afford to get the
best out of life. I know people in their 60’s who still haven’t figured this
one out.
Crystal created Budgeting in the Fun Stuff, as it’s so aptly named, after being introduced to the world of personal finance blogs back in 2009. She developed such a keen interest that she routinely posted comments on up to 30 personal finance blogs a week.
“When my comments started becoming longer than the posts, I started Budgeting in the Fun Stuff (BFS) to cover the balance between savings, spending, and the fun stuff in between,” Crystal says. “I wanted to start an online community and was hoping to draw in the many people who may also be operating a perfectly sane financial life while splurging along the way.”
So, on a combined salary of approximately $82,500, how do Crystal and her husband manage to put money aside for their monthly utility, gas, and maintenance bills, make mortgage payments, pay for insurance and taxes, save for retirement, keep an emergency fund, and still have money leftover for fun?
According
to Crystal, the key is to make sure you set
aside enough money for all of your monthly financia
l obligations first, and
then you can add the ‘fun’ right into your budget. Being highly-organized and
planning out their finances has allowed Crystal and her husband to set aside
individual ‘fun money,’ ‘joint fun money,’ and to put money towards a vacation
fund, each month.
“If you are paying all of your bills on time and saving enough for your future, then I think we all need some fun,” she explains. “I’d suggest creating a monthly entertainment fund. As long as you stay under the budgeted amount, you won’t mess up any of your savings goals.”
The strategy Crystal uses to stay on top of her finances and to make these ‘fun money’ accounts possible is prioritizing their finances:
1) Budget
2) Pay all bills on time
3) Set up an emergency fund for at least 3 months
4) Contribute the maximum matching to your 401k
5) Max out at least one Roth IRA
6) Add small ‘fun money’ allowances to the budget
7) Overpay your mortgage
8) Set up sub goals like our car, home, or vacation fund
Crystal says she and her husband were lucky to have been raised by financially savvy parents and, therefore, have been able to avoid many of the “financial dilemmas” in which so many other young people find themselves. In North America right now, if you weren’t taught how to manage money at home, it’s pretty unlikely that you’re going to learn about it anywhere else unless you take the initiative and teach yourself.
“I don’t think I’ve head of any educational system that teaches money management properly,” Crystal says. “I constantly wish that simple budgets could be taught in junior high and more thorough courses would be offered in high school. I think every child could benefit from knowing how to handle the income they will eventually receive.”
Throughout her blog posts, Crystal emphasizes that to ‘budget in the fun stuff’ you’ve got to have a balance; you can’t skip paying your credit card off one month just because you want to take a trip. Going into debt to have fun, or not taking care of your debt first, aren’t wise financial moves, and Crystal says she thinks a lot of people try to justify splurging by believing there’s such a thing as ‘good’ and ‘bad’ debt.
“I think the biggest misconception is that there is such a thing as ‘good debt,’” Crystal says. “All debt is debt. I agree that mortgage and even car debt may be necessary, but it shouldn’t be welcomed. It should be seen as exactly what it is, another money suck from interest charges.”
One of the things I love about Crystal is she’s not afraid to speak her mind, and especially when it comes to people’s disregard for debt. In one post entitled, Okay, I’m Being Debt Judgemental, Crystal references a Dear Wendy letter from CNN where a young man said he’s afraid to date because he’s $191,000 in debt, the reasons for which he says are “moot,” but he still describes himself as “financially responsible.”
Here’s how Crystal responded:
“Maybe he really has some awesome reasons (for being in debt), but we’ll never know because he deems them moot. So yes, I am being judgy. But, I bet I am not alone. I also bet that he is very right and will have a limited dating pool. Women interested in dating big debt either have no plans on marrying big debt or don’t mind big debt for moot reasons of their own. Either way, I don’t see a lot of security in his future. Am I being too harsh?” (Oct. 21, ‘10.)
Harsh? Heck no. It’s about time we heard more young people speaking out against other young people and their lackadaisical money handling. More people could legitimately ‘budget in the fun stuff’ if they learned to pay for the not-so-fun-stuff first, like Crystal does.
Share this article...
