Budget for Some Fun Money

- by Becky Hall

Fun money is an essential part of a budget – for everyone! In this article, learn with Cashfloat how to budget for fun money, why it is so important and what to spend it on.

Learn with Cashfloat what fun money is for.
How much should I spend on fun money every month?

Most financial advisors would recommend having £10 – £20 availble each month to spend on whatever strikes your fancy. You should spend this money on things which you wouldn’t have otherwise bought or done, for example;

  • A manicure
  • Buying new sports equipment
  • Sweet treats from bakery
  • Buying fresh flowers
  • A takeout supper

You’ll find a wealth of information on the internet about budgeting and how to reach your short- and long-term goals. However, have you ever heard of fun money? This article will explain everything you need to know about fun money: what it is, how much it should be; why it’s important and how to tweak your budget so that you’ve hit on the right amount.

What is Fun Money?

Think of fun money as the pocket money that you award yourself once you’ve allocated all the money for your day-to-day living expenses and priority debts. It’s money that you’re free to spend on yourself without feeling guilty. Depending on your interests and hobbies, fun money is used for those luxuries – whether that’s a manicure, junk food or replacing sports equipment.

Fun money shouldn’t be used as a catch-all for any household items you’ve forgotten to buy or to cover any emergency repairs. Instead, it’s money spent on yourself purely as the mood strikes you and on non-essentials.

How Much Should Fun Money Be?

There’s no set formula as to how much fun money should be and the amount depends on your income, your other financial obligations, your debts and your long-term financial goals. Ideally, it should be at least 10% of your income but no more than 30%.

However, if you’re also paying off accumulated debts and/or building up an emergency fund, it should be kept to a minimum until you’ve achieved these two goals. Even £10-£20 will be sufficient at the beginning.

Why Should you Have Fun Money in your Budget?

There are a number of reasons why it’s a good idea to have fun money in your budget.

It’s a Morale-Booster

Keeping to a budget can only be compared to being on a strict diet; at one point you’ll fall off the wagon. Having to account for every penny can leave you feeling demoralised. It might seem as if you’re depriving yourself of all the fun spending which makes life worth living. At least, factoring fun money into your budget will be a pick-me-up and make you feel better about yourself and all the daily sacrifices you make.

It’ll Save you Money

Even if you have no fun money, you know that at one point you’re going to make unwise financial decisions and spend money on something you shouldn’t. At least, allocating a sum for fun money in your budget puts a limit on how much you will spend in this way.

Without fun money, people who upset their careful budget with impulse buys are much more likely to abandon their budget all together saying ‘Budgeting doesn’t work’. Fun money allows you to keep your budget on track, save you money in the long-term, avoid requiring the help of online loans and means you don’t lose sight of your long-term financial objectives.

It Prevents Arguments

If you have a partner and you’ve set yourselves a long-term financial goal, having separate fun money can cut out a lot of the conflict and arguments over money in your relationship. It’ll give you the chance to spend your money on something for yourself without being judged.

All too often in a relationship, one person feels that they’re getting the short end of the stick when it comes to budgeting. This can lead to feelings of resentment or even revenge spending. ‘He blew all that money on x so why shouldn’t I spend money on y?’ This, of course, will have disastrous consequences for your budget.

If you’re both allocated a sum for ‘fun money’, it’ll stop many of your fights as you both have the same sum to spend as you see fit and without asking for permission from the other. It’ll give you a degree of financial independence without jeopardising your future plans.

Tweaking your Budget

No budget will be perfect from the word go. You should always review your budget every month at the beginning and re-adjust the amounts in each category. If you feel stress and your budget seems unsustainable, you could have been too harsh on yourself. Perhaps you should reduce the amount you put by for savings or in your emergency fund, for example. However, if you waltz through the month without feeling some constraints, then you need to put more by.

After your budget has been tried and tested for a couple of months and you can see it’s working, only review your spending again every quarter or whenever your circumstances change such as when you get a pay rise or promotion.

In the same way, you should also review how much you allocate for your fun money. You should increase or decrease the amount according to how the other parts of your budget are working out. Fun money purchases should be taken out of your day-to-day living expenses and should never be put on credit, or financed with payday loans found online.


Despite its misleading name, fun money is an essential part of any budget. It will keep your budget on track, give you a psychological boost when you’re feeling down about all the sacrifices you’re making to achieve your long-term financial goals and save you money. Pampering yourself once a month can make the difference between a working budget and one that becomes derailed after only a few months.

Do you know someone who could benefit from this article?
About The Author
Becky Hall
Becky transitioned from accounting to financial blogging unexpectedly after earning a first-class degree in Business and Accounting. Initially a freelance bookkeeper, Becky’s exposure to frequent cash flow issues among clients sparked her interest in financial education.
We work hard to provide useful and practical information on our website. Read our editorial policy.
Need £300 - £1,500 today?
Try our famous UK Payday Loans

Warning: Late repayment can cause you serious money problems. For help, go to moneyhelper.org.uk

Need money today? Apply now for our fast payday loans.
Blog disclaimer

We do all we can to bring you interesting, practical and valuable information. However, please understand the following:

Information and data on this blog are for information purposes only. While we work hard to ensure it is accurate, we cannot accept responsibility for the accuracy, completeness, suitability or validity of any information provided on the blog. We will not be liable for any errors, omissions, losses, injuries or damages arising from its display or use. All information is provided with no warranties and confers no rights.

If you feel that any of the information published on our blog is not accurate, please notify us via email at compliance@cashfloat.co.uk

Cashfloat is a trading style of Western Circle Limited - Company Registration Number: 7581337. We are fully authorised and regulated by The Financial Conduct Authority. FCA full permission license: 714479. ICO Registration Number: Z3305234

* Cashfloat terms and conditions apply. Applicants must be 18 or over. All loans are subject to affordability, applicant verification and traditional credit checks via various national databases by Cashfloat responsible lending policy. In most cases, loan decisions may take up to 30 minutes during office working hours. If your bank does not support Faster Payments, funds will be sent to your account the same day as approval so long as you’re approved by 16:30.

*Money will be funded to your bank within 1 hour of approval - Mon-Fri during working hours.

Representative example: Borrow £700 for 6 months. 1st monthly repayment of £168.45, 4 monthly repayments of £224.60, last monthly repayment of £112.20. Total repayment £1,179.05. Interest rate p.a. (fixed) 185.39%. Representative APR 611.74% Our APR includes all applicable fees. Daily interest is capped at 0.798%.

Warning: Late repayment can cause you serious money problems. For help, go to moneyhelper.org.uk