Fun Spending

[LivingAlmostLarge]

Everyone here is pretty responsible with money or trying to be. Here's an interesting question, how did you know or how do you know when you've hit a reasonable % or $ of savings annually, and can start to increase your lifestyle. Be it jointly or perhaps giving more fun money to each person in the couple to spend on their hobbies. Could be expensive or cheap hobbies, but at what point did you and your partner feel it okay to stop saving and being so conscious about savings and start to enjoy the fruits of your labor?

I was asked that today. Because I was being my usual practical, sensible self and discussing money and kids and savings. I said we have to make sure everything is in order before we can really indulge in ourselves. To me that meant emergency savings, home/mortgage, cars, college, and maybe even a little taxable savings.

I don't know that I could ever justify spending $120/hr flying a plane or renting a boat. But if I had extra money maybe a monthly massage or pampering myself with a mani/pedi.

And yes I know we make a lot of money, but it seems like we are still earmarking our money for stuff be it retirement, college, kids extracurriculars, etc. Right now to mimic dave ramsey every dollar has a name and I don't have any really spare dollars.

I'm not sure how much I would need but I think maybe 50% more income and I would probably hit the point where I felt okay to indulge in my own hobbies or enjoyment and my DH too.

[sarah]

I figured out how much money I wanted saved at retirement plus how much money I need for living expenses and the rest of the money is mine.

I have also decided to experiment with capping my total spending so I will have a rough budget for retirement. I am 9 - 10 years away from that milestone.

[kork13]

I mostly base everything off of my savings goals, which I periodically re-evaluate. Some of them are ongoing percentages of gross (like retirement), others are finite dollar figures that I'm aiming for (like my EF). If I'm meeting all of my savings goals (or already met some), I'll let myself spend a little more. If I'm short of them, or running it close, I pull it back a little.

I currently budget 5% (-ish) of gross for my fun money, and I rarely find that I need (or even want) more than that. Previously, I budgeted 3% of gross, but over the last few years my situation has become more secure and savings are on track, so I elected to bump up my spending money.

What also helps me is saving money specifically for spending....if that makes any sense whatsoever. I have an account that collects spending money when I'm not using it, so in that irregular moment when something bigger comes along that I want to buy/do/pay for, I can pull from that account without hesitation, because it's there to be spent and enjoyed -- even if that means renting a plane at $120/hr.

[disneysteve]

I mostly base everything off of my savings goals, which I periodically re-evaluate. Some of them are ongoing percentages of gross (like retirement), others are finite dollar figures that I'm aiming for (like my EF). If I'm meeting all of my savings goals (or already met some), I'll let myself spend a little more. If I'm short of them, or running it close, I pull it back a little.

This is pretty much what we do. I've posted many times that we do not live on a budget for our spending. I have no idea how much we spend each month on groceries, dining out, clothing, travel, or anything else. But I can tell you exactly how much goes into savings each month and what percentage of income that represents.

As long as we are meeting our savings goals and paying all of our bills in full and on time, I really don't care where the rest of the money goes. One month we may spend more dining out. Another month we'll take a vacation. Another month we'll visit the outlets and stock up on clothes. Whatever. The savings figures are set at an amount that I feel will allow us to reach our goals and we live on what's left.

[snafu]

We've always set spending 'targets' for the various, regular categories that are paid. If paying for flying lessons was important to one or the other we'd modify other categories to make it possible. For sure some 'treats' like theatre tickets, clothes, travel would constrict and likely sell some Mutual Fund units currently parked to pay for replacement appliances should they be necessary.

[phantom]

Like most people who have posted here so far, my husband and I tend to think of goals first and then let spending happen as it will once all our savings goals are met. It is a little tough to decide when we're saving "enough," so we do reevaluate how much goes to retirement, how much goes to paying off the mortgage, and how much goes to mid-term goals often. Ironically, sometimes getting a raise leads to a reevaluation that leads to even less regular monthly spending.

At the moment we leave roughly 8% of our take home pay unbudgetted, and we spend it on eating out, clothes, hobies, sporting events, other entertainment, and gifts. That money can also go towards small, irregular, less fun expenses before we have to tap our emergency fund. If that unbudgetted money doesn't get spent, it turns into extra savings. So, we still try to keep monthly spending on the little things in check in hopes of saving more than we planned. At this point, I can't see spending $120/hour on flying lessons, but if we get a chance to spend $120 on playoff hockey tickets sometime in the next couple of months, we very well might.

For big expenses, we have a savings account that we add a fixed amount of money to each month. Some of the money in that account is our emergency fund. But, anything above what it takes for us to consider the emergency fund fully funded is available for cars, vacations, and big home improvements. Of course, there still has to be some discussion on what is worth spending on. For example, taking a lot out to buy a car might mean delaying putting a patio on the house.

[Gailete]

Knowing we certainly aren't at that point yet, it is interesting how a certain mentality like ours can affect spending. I earned and received a $350 Amazon gift card well over a month ago. I bought a few things, couple weeks later bought a few things, spent some time putting things on my wish list and then realized with Mother's Day coming up my kids might appreciate a wealth of choices to buy me a present from and haven't spent anything since. So here I am with a little over $100 still on a gift card. Those that are shop till you drop folks would have spent every last dollar the day they got it. Me, I know how extremely rare a 'spending' spree is, am savoring and evaluating what I would appreciate the most. I think as long as your attitude towards spending stays like that, you can safely spend a little more now and then without ending up in the poor house.

[disneysteve]

I earned and received a $350 Amazon gift card well over a month ago. I bought a few things, couple weeks later bought a few things, spent some time putting things on my wish list and then realized with Mother's Day coming up my kids might appreciate a wealth of choices to buy me a present from and haven't spent anything since. So here I am with a little over $100 still on a gift card. Those that are shop till you drop folks would have spent every last dollar the day they got it.

I can totally relate. I do some medical surveys that pay me in Amazon credit. At any given time, I have hundreds of dollars on account. We just placed an Amazon order tonight and even after that order, my gift card balance is $700.19. At times, it has crept over $1,000. Most typical Americans would go nuts and buy everything they could, probably spending the whole amount and more. Us? We just leave it there and drop things in the cart from time to time and place an order when we have enough to get free shipping.

[Gailete]

Glad to think I'm not weird about it! It is so easy to buy things on Amazon now that they stock everything. I did get my favorite canned plums which are not available in any form in this part of the country, got two cases of them. Same deal, I always make sure I get the free shipping. I'd rather know I CAN get something than that something I would have really wanted just became available and I just spent all my money on something that I didn't want as much.

[Like2Plan]

... At any given time, I have hundreds of dollars on account...

Wow--that is awesome! (And, I thought I was in hog heaven with a $10.00 Amazon gift card.. ) I did a survey from our insurance company and they sent a code for Amazon back in Feb. I forgot about it until recently... I used part of it to watch an obscure documentary video--still have enough to watch another movie. I figure being able to watch 2 movies is a pretty good payoff.

[bigdaddybus]

Everyone here is pretty responsible with money or trying to be. Here's an interesting question, how did you know or how do you know when you've hit a reasonable % or $ of savings annually, and can start to increase your lifestyle. Be it jointly or perhaps giving more fun money to each person in the couple to spend on their hobbies. Could be expensive or cheap hobbies, but at what point did you and your partner feel it okay to stop saving and being so conscious about savings and start to enjoy the fruits of your labor?

I was asked that today. Because I was being my usual practical, sensible self and discussing money and kids and savings. I said we have to make sure everything is in order before we can really indulge in ourselves. To me that meant emergency savings, home/mortgage, cars, college, and maybe even a little taxable savings.

I don't know that I could ever justify spending $120/hr flying a plane or renting a boat. But if I had extra money maybe a monthly massage or pampering myself with a mani/pedi.

And yes I know we make a lot of money, but it seems like we are still earmarking our money for stuff be it retirement, college, kids extracurriculars, etc. Right now to mimic dave ramsey every dollar has a name and I don't have any really spare dollars.

I'm not sure how much I would need but I think maybe 50% more income and I would probably hit the point where I felt okay to indulge in my own hobbies or enjoyment and my DH too.

Recently (over the last 18 months) my wife and I have adjusted our budget to where we are living off of 50% of our gross income with no other debt than 14.8% of that money going towards housing expenses(tax, mortgage, insurance). Last year our effective tax rate was 4.6% and I assume this year will be the same so that puts us giving/saving 45.4% of our income. It was a lot of work to get here, but right now I am feeling very comfortable financially and I have "the itch" to buy a sports car.

I am trying to fight the urge, or compromise on a cheaper car, but I am feeling weak. With 4 kids, 12 and under I am very proud to hit the 50% mark and I don't want to blow it.

[autoxer]

I was just looking at where all of my money went last year to decide if I want to make any changes. I indulge in my hobbies regularly. I've scaled back during big life decisions, but the spending tends to creep back up over time. Part of my motivation for eliminating wasteful spending, is so that I can spend more on the activities that I really enjoy.

There is no point where we say, 'oh we have saved enough, let's spend more'. The balance between spending and saving is constantly shifting. Our savings rate for last year was approximately 30%, and I am fairly comfortable with that. I'm expecting that to drop this year, because my wife is on a maternity leave from work, but I'm not overly concerned with exactly where that number ends up.

I know I can do much better with saving, but I do love my hobbies.

[LivingAlmostLarge]

I figured out we live on about 1/3 our income. We pay 15% federal, 6% state, 6% SS, 1.5% Medicare, medical all said and done around 33%, and I think we save around 1/3.

I think we'll allow ourselves with any future raises more towards living. I'd really like to buy a house.

[StellarSaver]

I've also struggled with deciding how much "fun money" to spend. I think what it comes down to for me, and probably for many others, is that there is a pretty deeply ingrained personality trait that guides my spending habits regardless of how much I'm earning or saving. In other words, I basically spend what feels right and the rest gets saved by default. In my case, that means I save a lot because my spending "set point" is typically pretty low. I was curious if I could raise my spending set point, so I did an experiment for a few months where I wrote down a bunch of stuff I had been wanting to buy and then made a conscious effort to actually purchase everything on the list within a set time frame. To my surprise, I simply couldn't do it. This more or less proved to me that I am a born saver (or rather, a born "under spender"), so why try to fight it. Since then, I've continued to buy things and spend money as I feel the urge, and that includes things like a couple pricey vacations and a new iPad, etc., so I'm not living like a miser by any means. And I continue to save a fair amount each month even though I've exceeded my overall savings goals by any reasonable measure.

Bottom line, I think if you're not a big spender by nature, you probably won't be able to force yourself to spend more just because you've achieved a certain level of savings or income.

[mrpaseo]

My wife and I started our life together debt free (Thankfully). Through the years with each pay raise we did raise our living but also put some away each month (From the pay raise). As the years went on, our monthly savings went up with each pay raise. We went astray a few times but thankfully, we never let our debt get away from us.

There is no one answer, it's all dependent on your situation, your goals and your time line. I know this doesn't help much.

Best.