Establish a Budget for Pleasure

[glennds]

Among the straightforward, sensible rules that HB put to paper is Rule #16 which talks about establishing a budget for pleasure. Yes, it's easy to spend too much and in doing so threatening your financial future, but as HB points out,  it can be also be easy to be afraid of spending your hard earned money for fear of impoverishing your future. A budget for pleasure helps avoid both of these pitfalls.

So the question for the group - how many of you have established a budget for pleasure? And if you  have, how did you arrive at it? Percentage of annual income? % of overall assets? Some other methodology?

[ns3]

Sounds kind of odd in a way, like agreeing to spend 20 minutes ,3 days a week making love.

We don't have a specific budget but we like good food and indulge at least once a week and take a nice vacation every year to reward ourselves for our hard work.

[Libertarian666]

Sounds kind of odd in a way, like agreeing to spend 20 minutes ,3 days a week making love.

Ok, wise guy, what is your time budget for that then? 

[Kshartle]

Sounds kind of odd in a way, like agreeing to spend 20 minutes ,3 days a week making love.

Ok, wise guy, what is your time budget for that then? 

3 minutes, 20 times a week.

How's that sound ladies?

[glennds]

I probably did a pretty bad job of explaining the concept. I think it's more clever than odd. I suspect the majority of PP followers are conservative by nature, and most would agree that the PP is a capital preservation strategy if there ever was one. I would consider myself conservative, and probably frugal by nature. This creates a tendency to hoard money for the future in an effort to be as well prepared for the unknown as possible, or at the very least, confine most spending to practical purposes.

So Harry Browne's advice was to feel confident in the "bullet proof" portfolio, and set up a budget for spending some of your money in pleasurable ways that you otherwise might restrain yourself from doing. After all, what good is your hard earned money if you don't enjoy life with it? So his concept was to establish a budget for pleasure and blow it on whatever you want - vacations, cars, expensive restaurants, luxuries that you would enjoy a lot but might otherwise deny yourself. As long as you're within your budget, you can do so with no fear of impoverishing your future.

I felt this advice was insightful. Sometimes those occasional, calculated splurges can really improve your quality of life, and Browne's idea of setting up a methodology potentially helps us frugal types enjoy our money without any guilt or anxiety about it.

If anyone else subscribes to this idea, I wondered how they went about defining their pleasure budget.

[Xan]

glennds, I totally agree.  It's a very freeing way to go.  You can spend for fun without guilt if you've budgeted for it like that.

As far as your question, though, I'm afraid I have no idea.

[Ad Orientem]

Sounds kind of odd in a way, like agreeing to spend 20 minutes ,3 days a week making love.

That's definitely not in my budget.

[mattymcmatt]

I probably did a pretty bad job of explaining the concept. I think it's more clever than odd. I suspect the majority of PP followers are conservative by nature, and most would agree that the PP is a capital preservation strategy if there ever was one. I would consider myself conservative, and probably frugal by nature. This creates a tendency to hoard money for the future in an effort to be as well prepared for the unknown as possible, or at the very least, confine most spending to practical purposes.

So Harry Browne's advice was to feel confident in the "bullet proof" portfolio, and set up a budget for spending some of your money in pleasurable ways that you otherwise might restrain yourself from doing. After all, what good is your hard earned money if you don't enjoy life with it? So his concept was to establish a budget for pleasure and blow it on whatever you want - vacations, cars, expensive restaurants, luxuries that you would enjoy a lot but might otherwise deny yourself. As long as you're within your budget, you can do so with no fear of impoverishing your future.

I felt this advice was insightful. Sometimes those occasional, calculated splurges can really improve your quality of life, and Browne's idea of setting up a methodology potentially helps us frugal types enjoy our money without any guilt or anxiety about it.

If anyone else subscribes to this idea, I wondered how they went about defining their pleasure budget.

Depending on the type of person you are, this can be very important.  I'm definitely more conservative when it comes to spending money.  My wife is more in the middle.  This causes tension when we want to blow money on fun things. Our solution was to put 10% of our income into a fun account.  We can spend this money on whatever we want.  It helps me because I have mentally written off this money.  We can spend it on whatever we want.  It helps her because we have a budget.  Next time we want to take a vacation, we just see how much is in the account and then can spend up to that amount.

I don't know if 10% is too high or too low yet.  We just started implementing this 6 months ago.  It feels like a good amount though.  It's enough to be able to do some more expensive things but not too much that it cuts into daily living.