One of the bones of contention in my home is the things vs. experiences debate. My husband likes things, and I prefer experiences. (We both have primarily “spender” money personalities but what we like to spend money on differs.) I especially like to travel. I have a habit of converting piles of stuff into plane tickets to some destination. For the most part, I’m happy with a staycation or local trip (read: camping), but sometimes I want to do something else. But, how will I get the money?
The good news is that you can get the money to do what you want — if you plan for it. This usually means allocating money for your goals ahead of time.
Deciding What’s Important to You
Before you can decide what you want your money to do for you, you first need to figure out what’s important to you. Consider your financial priorities. Look at your spending and determine whether your spending reflects your priorities. In my family’s case, we often have to divide up the spending so that my husband and I each get a little bit of what we want. I allocate money that stays in a specific account to add up for travel expenses (especially to blogging conferences, since I can get a tax deduction, since it’s part of my work as a blogger), and I allocate a certain amount to sit in the PayPal account my husband uses to pay for things on eBay.
Other items of importance to us include tithing for our church, charitable donations, contributing to retirement accounts and our HSA, and building the emergency fund. These are all items that have specific amounts attached to them so that we can meet our future financial goals.
Creating a Lifestyle Fund
You can improve the way your money works on your behalf, allowing you to do what you want, by creating a lifestyle fund. I like this idea. While my husband and I have automated some of our contributions so that our future priorities are funded, and we account for monthly obligations like insurance premiums and the mortgage, we don’t usually allocate specific amounts for groceries, entertainment or eating out. We have a very basic spending plan, and when the money’s gone, it’s gone.
A lifestyle fund, though, would help change this a little bit. I like the idea of putting money into a dividend portfolio, or in some other type of high yield account, and then using the proceeds to have a little fun. After all, money should be spent; it’s not just for hoarding. If you build up a “fun” fund that you can draw on later, or make an effort to cultivate some sort of income on the side to help you pay for the fun stuff, it can really go a long way toward increasing your contentment with life. But you have to plan it out, and create a system that works for your personal economy.
If you want to have more money to do what you want, you need to plan for it. Find ways to allocate some of your income toward fun spending objectives, in addition to the more “serious” future goals.
Miranda is freelance journalist. She specializes in topics related to money, especially personal finance, small business, and investing. You can read more of my writing at Planting Money Seeds.