Dave Ramsey says: Make a budget line for fun money

Dear Dave,

I finally paid off all my debt except for my house, and I have an emergency fund of six months of expenses saved.

It feels great to be in control of my money, but I am afraid I might lose control again and end up back where I started before I began following your plan.

How can you make sure your leisure spending doesn’t get out of hand?

– Lavell

Dear Lavell,

I get what you’re saying. You don’t want to go back to those days of being scared and out of control where your finances are concerned. You spent a lot of time, made tons of sacrifices, and put in lots of disciplined hard work getting out of debt, changing your behavior, and finally reached a point where you’re winning with money. Most people don’t forget the hardship and sacrifices that go into something like that, and I don’t think you will, either.

There’s a season to be strict, hard-nosed, and deny yourself things. There’s also a time to act like an adult, and forego instant gratification, like during those early Baby Steps. But some self-care and a little fun is important once in a while, too. One way to enjoy life without going financially overboard is to make a budget line for fun money.

Putting fun money in your budget isn’t a green light to forget your money goals, or go on a spending free-for-all. It’s actually part of sticking to your budget. Remember, you want a zero-based budget. That means giving every dollar a job, and having a fun money category helps you focus on all your spending, so you don’t accidently waste money on little things here and there.

When you give yourself a budget line for fun, you can spend that amount on whatever you want. We talk a lot about goals and how they need to be a balance of empowering and realistic. Budgeting fun money helps with the realistic side, because it lets you stick to your goals and have a treat every now and then.

When you think of your budget as permission to spend, you get a new perspective on budgeting. You’re giving your money permission to go where you want it to go. Plus, when you treat yourself once in a while, you’re less likely to fall back in your old, financially-out-of-control ways!

— Dave

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