Make Sure You Set Aside Some Money in the Budget for Fun!

PennyGem’s Elizabeth Keatinge tells us why lattes can be a part of a reasonable monthly budget.

Transcript

00:00you may have heard the age-old financial advice that in order to save you need to skip the latte

00:09well we beg to differ budgeting for things that bring you joy is a completely respectable and in

00:15fact important category in your budget so how much should you budget for the lattes or the

00:22vacations fitness classes girls nights out date nights or whatever it is that brings you joy the

00:28Motley Fool explains that the 50 30 20 rule says 50% of your budget goes to needs rent bills while

00:3630% goes to wants and 20% goes to paying off debt and saving easier said than done right nerd wallets

00:43suggest setting aside that fun money in a separate account if the goal is to spend it on things like

00:48vacations a savings account that earns interest is a good idea because you're oftentimes limited to six

00:54withdrawals or transfers a month if it's for a daily splurge like coffee a checking account may

00:59fit your needs or wants better calculate 30% of your income and literally transfer that amount to

01:06the fun money account if you're saving up for a vacation you'll get joy watching that money grow

01:11while you plan your itinerary or if that latte is what brings you joy you'll get caffeinated

01:17without worry because literally you've earned this