It’s more fun to spend money on things we like, rather than on necessary expenses.
It can be difficult to have money left over each month to spend on fun things. And if we do have left over money, we can sometimes feel guilty about spending it on the fun stuff.
And then there’s those unexpected expenses – like a new roof or a trip to the ER. So, is there a way to pay for the necessities, but also have some cash to spend on the fun stuff – and not feel bad about it? Here are a couple ideas to get you thinking towards how a budget could be tailored to your specific situation and goals.
1. Pay necessary expenses first and then spend everything else on the fun stuff.
While this is an option, it might not be the best. Your necessary expenses do get paid, but it might have you creating a lifestyle you can’t really afford. And what happens when you have an emergency, but don’t have the funds to cover that emergency? And where does saving for retirement happen with this option?
2. Pay necessary expenses, save some for retirement, and then spend everything else on the fun stuff.
Well, this is better than the previous option. You’d be saving for retirement and paying necessary expenses. But it still doesn’t address emergency expenses. And that’s a big deal. You might not think it is. Until you have an emergency. And then you’re unprepared.
3. Pay all necessary expenses, save some for retirement, save some for an emergency fund, and then budget some for the fun stuff.
By budgeting some money for the fun stuff, you’ll be able to create an emergency fund. This will make it a less stressful time when unexpected expenses come up. If you had an unexpected medical expense, or you lost your job, your emergency fund could be used until you can get back on your feet. Once you get back on your feet, you can begin building up your emergency fund again.
Enjoying the fruits of your labor is important. However, it’s also just as important that you make the most of what you’ve earned while being responsible.
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About Forman Investment Services
If you are not familiar with us, Forman Investment Services is an independent practice located in Columbus, Indiana focusing on Family Wealth Management and generational planning. We serve clients not just locally, but across the country and globe. In today’s day and age, especially after experiencing COVID, we are very comfortable communicating from any distance whether it be in person, a Zoom call, or by phone. We confidently adapt to our clients lives and unique relationship in the style of communication and complexity.
Our planning encompasses much more than choosing investments, as we must consider tax/estate planning, education funding, insurance, retirement planning, and so much more. We work with a select group of clients who value time, family, and recreation, and need today’s investment, tax, and estate planning complexities coordinated for them. We also provide one-time plans to those that are not in need of an ongoing advisor relationship yet to help get you on the right track.
Reach out to us for an introduction if you are interested in learning more!
Any opinions are those of Forman Investment Services and not necessarily those of Raymond James. Investing involves risk and you may incur a profit or loss regardless of strategy selected. Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional. Prior to making an investment decision, please consult with your financial advisor about your individual situation.