Living on a budget doesn’t mean depriving yourself—we think that travel is very important, both for your mental health and, well, for your fun quotient. LearnVest’s guidelines say that leisure, travel, and miscellaneous spending should account for only 8% of your budget. But, personal finance is ultimately that: personal. It’s okay to rearrange some of the wedges of your personal pie chart, as long as you never exceed your total income.
Rearranging Your Budget To Accommodate Your Passions
Depending on the year, we’ve been known to spend approximately 12% of our budget on travel, alone. Whether you’re passionate about eventually traveling to Antarctica, eating at the newest Mario Batali restaurant, or going to every Arcade Fire show in your area, it’s okay to spend money on the things you love.
1. To Support Higher Expenses In One Area, Reduce In Others
If you want to spend more on travel, make sure to adjust other categories of your spending accordingly. If that Antarctica trip means that travel will take up 25% of your budget, we’re not saying you shouldn’t go. We are saying that you should reduce your expenses by seeking out lower rent, eating out less often, or asking for a raise. Use the LV Budgeting Tool to play around with different scenarios. Whatever you decide, make sure that your total budget doesn’t add up to more than 100% of your income.
2. Assign A Dollar Amount To Your Leisure Goals
If you plan to dedicate more money to going to music festivals, then crunch numbers in order to calculate how much you can afford to spend each year on that pastime. Then, assign a concrete dollar amount. Divide that by 12 to figure out your monthly leisure budget.
3. Follow Your Monthly Leisure Budget, Even Without Concrete Plans
Save for the things you’re passionate about regularly in your monthly budget, even if you don’t have any trips or concerts on the immediate horizon. Consider setting up a separate savings account into which you can contribute your budgeted percentage each month. If you have a specific goal you’re working toward, great. If not, setting aside the cash regularly will give you a head start whenever you settle on your next destination.
4. Actually Go!
We want you to get those front row seats at the Lady Gaga concert, to go on a vacation to Hawaii, or to finally dine at Per Se. Studies have shown that people gain a much greater sense of enjoyment from experiences than from mere objects; doing what we love allows us to recharge and escape our normal routine, which is an essential part of overall happiness and prosperity.
Plan ahead by including these leisure experiences in your overall budget so that you don’t end up missing out—or worse yet, racking up credit card debt—to satisfy the need to get away from it all.