In the financial context, you might think that money is better used for entertainment rather than investment. In fact, both things can be done if you are smart at managing finances by making a monthly budget.
Making a budget requires you to make a detailed expenditure list. You can make a list of expenses by dividing them into several categories, such as daily necessities, installments, emergency funds, and entertainment.
Ideally, the portion of income that can be allocated to the entertainment budget ranges from 20-30 percent. There are two methods you can try to implement: the management principle of 50-30-20 or 60-20-20.
The 50-20-30 principle provides a sizable portion of 30 percent for the entertainment budget. Meanwhile, the 60-20-20 principle divides your expenses into 60 percent for daily needs, 20 percent for savings or investment, and the remaining 20 percent for entertainment.
This is important in maintaining a healthy cash flow. Why? Because a healthy cash flow is the key to happiness for everyone, both single and married.
Hence, choose the method that best suits your monetary condition and financial plan. After making your decision, it's a good idea to also apply the following three tips for saving up while having fun:
You don’t have to immediately set aside a huge part of your income for savings. Start small and increase the amount gradually once you get used to it.
Once your income has covered the savings and expenses budget categories, then you can allocate funds to the entertainment budget. The goal is to prevent your savings from being used in over-budget expenses.
Plan a vacation
You can enjoy leisure activities within the entertainment budget. Vacationing out of town or abroad is fine as long as the frequency and budget are within your capabilities.
The planning and preparation must also be done in advance so that you can get valuable deals. Airline tickets and accommodations, for instance, will cost more on a short notice. You can also shorten your vacation time to minimize expenses.
In addition, avoid traveling during the holiday season, such as year-end or holidays. Ticket and accommodation prices are usually higher than the regular seasons.
For those of you who love hanging out, gathering at home with your family or friends will save more money compared to going to a mall. You can take turns in hosting these gathering events.
There are a wide variety of activities you can do, including the ritual of private viewing using streaming services, such as Netflix or iFlix. Everyone can pitch in for food and drinks or the current host can cover it.
Apply shopping strategy
There is a special strategy for shopping without draining your wallet. First, make a list of items that you want to buy. Don’t spend money on items that you don’t need. It would be better if you are patient and take the time to compare prices in each store, both online and offline.
Afterwards, you can also take advantage of promotional offers at certain seasons to get the items you want at low prices. But no matter how good the deals seem to be, don't forget to read the terms and conditions. There may be a minimum transaction value and a particular payment method.