A Question About Discretionary Spending
Rebecca Fine has a successful coaching practice in Olympia Washington www.FineCoachingCo.Com she asks:
I read somewhere that having a monthly 10% ‘blow it on whatever’ fund not only makes you feel better about 80% of your income paying bills and groceries (10% in savings of course) but initiates the ‘Law of Attraction’ by basically telling the universe I’ve got money to burn. Hence the Universe will gladly feed me more $$. What are your thoughts on this monthly 10% Fuck-it Fund?
I think a Fuck-it Fund is absolutely key to successful budgeting but it’s tricky to put a one-size fits all percentage on anything. For example, we are now being told that ideally we should be saving 20% of our income, but for many that is an unreachable goal and would require giving up food, shelter or selling a child or two. Equally a 10% Discretionary Spending Fund may be wildly out of reach for some but feel draconian and stingy to others. What is important is to find the right number for you, budget for it and stick to it. As well as keeping you on track with your goals, it makes blowing that extra moulah on treats all the more pleasurable as it doesn’t come with a side order of guilt.
The advantage of forward-looking budgeting apps, such as YNAB is that you can test out different scenarios with real numbers: "If I raise my discretionary spending does my budget still balance. If not, can I solve this by attempting to spend less on groceries/contributing less to savings this month etc?".