A Homeschooler’s Question
My wife, Theresa, and I homeschool our three children. We are part of a Co-op to help connect us with a larger body of homeschool families within our community. Not only is it a great resource for networking, but it allows homeschool families to do things they otherwise would not be able to do on their own. As an example, we utilize rooms in local government buildings and churches to bring students together to learn specialized classes and take electives. We also organize group field trips, which are super fun!
Our daughter entered 9th grade this year and had to select some elective classes. One she has decided to take is personal finance with the Co-op group. This is of particular interest to me since I am such a personal finance and money nerd. I am really interested in what she will learn in this class. Is it WWDD (what would dad do)? Is it Destination My FI thinking?
The other day, she was asking her mother and I some questions about money and personal finance (which just warmed my heart). During our discussion, she asked me about my opinions on spending money and what is “Fun Money”?
What is Fun Money?
Fun money is money we use to do the things we really enjoy. It’s usually the frivolous adventures and purchases that are not really needs, but wants. Unfortunately, there are many people who think that when they get a paycheck or some other kind of monetary windfall, it is all just fun money. Money that can be spent, gambled, or burnt without any remorse.
I too enjoy a spontaneous purchase now and again or an adventurous travel experience outside the norm. But how can we do it without impacting our Destination My FI? What if it had a negative effect on our whole financial outlook? If I just spent money with reckless abandon, how could I ensure we would not go broke?
Introducing the Budget
My answer to our daughter that day was the budget. Now Theresa and I consider ourselves to be expert budgeters. I have been budgeting since I was a child and Theresa and I have been budgeting our entire married life.
That day, we explained to our daughter the power and importance of budgeting through this one example. You see, when you budget, you decide how you will deploy the dollars that are at your disposal. You are assigning them to a very specific task. This is Destination My Fi thinking!
We explained to her that without a strategic plan, we would not know if we were negatively impacting our financial outlook. When we assign a specific amount of our budget to “Fun Money”, it does not restrict us. It gives us freedom!
Only by allocating designated dollars to fun are we able to spend money within that category without fear, regret, or risk to impacting our overall plan. This allows us to enjoy our fun money. How much fun money should someone set aside? The answer really depends on your goals. We will explore this deeper, later. For now, it is sufficed to say that you should ensure you can meet your financial obligations (bills, services, and expenses needed to survive) and fund your investments in line with future planning as a priority. Let’s face it, you do not have to have money to have fun.
Ways to Have the Fun without the Money
Earlier in our lives, when our daughter was very young, Theresa stopped traditional work to be home. Initially, she negotiated with her employer to do some part time work at home. He agreed and it was an absolute win-win. We utilized this time to achieve some of our financial goals, which eventually allowed her to leave her employment altogether.
During this time, we had to tighten the reins and almost entirely eliminate our “Fun Money” portion of the budget. That did not mean we had to stop life, or having any fun. We just had to if we were going to stay on our Destination My FI path.
We would play games, go to parks, borrow movies from the library. If you have not borrowed movies from your local library, you are missing out on a very good life hack. The library is funded through tax dollars and has an excellent selection of new movies and books, as well as many other resources.
We also learned to cook meals more at home. Not that we didn’t know how to cook at all, but I am talking about next level cooking. Not only has cooking and entertaining become a favorite pastime of ours, we have gotten quite good at it! It’s kind of funny now. There are times we go out to eat and say to each other, we could have made this same thing at home (and for a fraction of the price)! Today, our three children cook and bake with us. It is a favorite family event!
What is Fun?
You have to think about what truly brings you joy. Is it the stuff, the food, the places, or the experiences and memories? Really think about that! It is easy to just go and spend the cash, but in the long run, it may detour your path to FI. Having a budget plan and solid understanding of what fun is, is Destination My FI thinking!
Disclaimer: The concepts, ideas, and anything else posted within this blog are based on the authors opinion, from personal experience and research. Although they have worked for me/us in the past, they might not be effective in the future. They may not work for you.
The posting author is not a professional investment advisor. Any posted articles or comments made are simply made to expand the conversation and to challenge ideas about the topics within. They are not intended to be investment advice.
destinationmyfi.com makes no representations as to accuracy, completeness, currentness, suitability, or validity of any information on this site and will not be liable for any errors, omissions, or delays in this information or any losses, injuries, or damages arising from its display or use. All information is provided on an as-is basis.
You are solely responsible for your own choices. There are absolutely no guarantees that anything you read here will work for you.