How Much Should I Spend on “Fun” Things or Non-Essentials?

Benchmarks and Rules of Thumb for Enjoying Life Responsibly

Managing money well isn’t only about paying bills, saving for retirement, or building an emergency fund. It’s also about giving yourself permission to enjoy what you earn. After all, money is a tool — not a trophy — and a sustainable financial plan includes space for joy, hobbies, and spontaneity.

But how much is too much to spend on “fun” or non-essentials? What’s a healthy balance between living for today and planning for tomorrow? Let’s explore practical frameworks, benchmarks, and mindset shifts to help you answer that question with confidence.

1. Understanding What “Fun Spending” Means

“Fun” or “non-essential” spending refers to discretionary expenses — things you want but don’t need to survive or maintain your core well-being. Examples include:

• Dining out or coffee shops

• Streaming services, games, or entertainment subscriptions

• Travel and vacations

• Hobbies and personal projects

• Fashion, accessories, or home décor

• Events, concerts, and social activities

These costs are different from essential expenses such as housing, groceries, utilities, healthcare, insurance, and transportation. Fun spending sits in the flexible part of your budget — the portion you can adjust as your priorities change.

2. The 50/30/20 Rule — A Simple Starting Point

A widely recommended benchmark comes from U.S. Senator Elizabeth Warren’s budgeting framework:

50/30/20 Rule:

• 50% for needs — essentials like rent, groceries, utilities, and minimum debt payments.

• 30% for wants — your “fun” and lifestyle spending.

• 20% for savings and debt repayment beyond the minimums.

This rule of thumb works because it creates a healthy boundary: you’re dedicating up to 30% of your take-home pay to things that make life enjoyable without sacrificing financial security.

For example, if your after-tax income is $4,000 a month, you could spend around $1,200 on discretionary items — travel, dining out, hobbies, entertainment, and personal treats.

That number can flex depending on your situation:

• If your fixed costs (rent, car, etc.) are high, you might only have room for 10–15%.

• If you live frugally or earn more than you spend, you might comfortably allocate 35–40%.

The key is balance, not perfection.

3. The “60% Solution” and Variations

Another budgeting method — popularized by former Money magazine editor Richard Jenkins — is the 60% Solution. It allocates:

• 60% of gross income for committed expenses (needs and obligations)

• 10% for retirement savings

• 10% for long-term savings or debt repayment

• 10% for short-term savings (vacations, large purchases)

• 10% for fun money

In this model, fun spending equals 10% of gross income, which might translate to roughly 12–15% of take-home pay.

This is more conservative than the 50/30/20 rule — ideal if you’re aggressively saving, paying down debt, or working toward early retirement.

4. The 80/20 “Rule of Joy”

If you prefer something simpler and more mindset-based, use the 80/20 Rule of Joy:

• Save or allocate 80% of your money to responsibilities, security, and goals.

• Use the remaining 20% guilt-free for whatever makes you happiest.

This approach encourages mindful spending — not necessarily fixed categories, but an intentional split between future happiness (savings, stability) and present happiness (experiences, comfort, indulgence).

It’s especially useful if you dislike rigid budgeting but still want a benchmark to prevent overspending.

5. How to Find Your Personal Benchmark

Rules of thumb are helpful, but everyone’s life and values differ. To customize your “fun spending” range, consider these factors:

a. Your Financial Priorities

If you’re in a debt-repayment or savings-growth phase, you might tighten fun spending to 10–15%.
If you’ve built a strong financial foundation, spending 25–35% on discretionary items may be sustainable.

b. Your Cost of Living

Someone living in an expensive city might spend most of their income on housing, leaving less room for leisure. Adjust your percentages to reflect local realities.

c. Your Personality and Habits

Some people genuinely gain happiness from spending on experiences; others find joy in security and minimalism. Your spending should match your values, not someone else’s Instagram feed.

d. Your Financial Safety Nets

If you have a fully funded emergency fund, no high-interest debt, and are meeting retirement contributions, you can afford more flexibility.

6. The “Pay Yourself First, Then Play” Framework

One of the best ways to enjoy non-essentials responsibly is to reverse the typical spending pattern.

Instead of:

Earn → Spend → Save What’s Left

Try:

Earn → Save First → Spend the Rest

Set up automatic transfers for savings, debt payments, and bills immediately after payday. Whatever remains becomes your fun fund. This system prevents guilt and overspending because you’ve already taken care of the essentials.

You can even separate accounts — one for “responsible” spending and one for “fun.” When the fun account runs dry, that’s your built-in limit.

7. Using “Guilt-Free Spending Accounts”

Many modern budgeting apps (like You Need a Budget, Monarch, or Copilot) encourage “envelope”-style systems where you pre-assign money to categories.

Example:

• $150/month → dining out

• $100/month → hobbies

• $75/month → streaming, books, or entertainment

• $100/month → spontaneous fun

This method creates intentionality — you can say “yes” to things you love without worrying about overspending, because the money was already earmarked for that purpose.

8. Fun Spending vs. Lifestyle Inflation

As your income grows, it’s natural to want nicer experiences — better restaurants, upgraded tech, more travel. This isn’t inherently bad, but unchecked lifestyle inflation can crowd out your savings goals.

A good benchmark:

For every raise or bonus, allocate 50% to financial growth (savings, investments, debt) and 50% to lifestyle improvements (fun).

This way, your enjoyment scales with your income — but so does your long-term security.

9. Consider a “Joy ROI” — Return on Enjoyment

Not all fun spending delivers equal happiness. One way to be more intentional is to evaluate your Return on Enjoyment (ROE):

• High ROE: Activities that create memories, connection, or long-term satisfaction (travel, classes, hobbies).

• Low ROE: Impulsive purchases that fade quickly (random online shopping, unused subscriptions).

By spending more on what truly energizes you — and less on what merely fills time — you’ll feel more fulfilled without necessarily spending more money.

Ask yourself:

“Will I still feel good about this purchase next week, or even next year?”

If the answer is yes, it’s probably worth it.

10. Tracking Without Micromanaging

You don’t need to record every latte, but awareness is powerful. Try:

• Reviewing your bank or card statements monthly.

• Categorizing discretionary expenses into “joyful,” “neutral,” or “regret.”

• Adjusting future spending accordingly.

This reflection builds self-awareness and helps align your habits with your values — turning budgeting into a personal growth tool, not a punishment.

11. Couples and Families: Setting Shared Fun Budgets

If you share finances with a partner or family, disagreements often stem from different definitions of “fun.” One person may love travel; the other prefers gadgets or nights out.

A fair solution is the joint-and-individual system:

• Create a shared “fun” fund for activities together.

• Give each person their own monthly discretionary allowance, no questions asked.

This preserves autonomy and prevents resentment. Even a modest personal allowance — say, $100–200 per month — gives each person financial breathing room for guilt-free joy.

12. Adjusting for Financial Seasons

Your “fun” budget isn’t fixed forever. Life evolves — sometimes you tighten, sometimes you loosen.

The goal isn’t to restrict — it’s to adapt. A temporary cutback doesn’t mean deprivation; it means alignment with your bigger goals.

13. What Experts and Research Say

Studies in behavioral economics and happiness science provide useful insights:

• Experiences > Things: Spending on experiences tends to produce more lasting happiness than material goods.

• Social Connection: Money spent on shared experiences or generosity (gifts, charity, hosting friends) has higher well-being returns.

• Moderation Matters: Excessive or impulsive spending often leads to regret, while small, consistent treats create sustainable joy.

This suggests that how you spend fun money may matter more than how much.

14. Example Budgets

Here are a few sample monthly budgets showing different income levels and lifestyles:

These figures aren’t prescriptions — they’re starting points. Your unique goals, debts, and savings needs will guide your adjustments.

15. Building a Guilt-Free Relationship With Money

The purpose of budgeting isn’t to eliminate joy; it’s to create intentional joy. The healthiest financial plans don’t feel like diets — they feel like sustainable lifestyles.

If your spending supports your values, doesn’t jeopardize your goals, and makes you excited about life, you’re doing it right.

A few reminders:

• You don’t need to justify every indulgence.

• Fun isn’t frivolous — it’s part of a balanced life.

• Being mindful doesn’t mean being stingy.

Money well spent is money that aligns with who you are and what you value most.

16. Quick Summary — Practical Rules of Thumb

17. Final Thoughts

So — how much should you spend on fun things?
There’s no single “right” number, but there is a right principle: spend intentionally, joyfully, and within your means.

If you consistently:

• Cover your essentials comfortably,

• Save and invest toward your future, and

• Have money left to spend on what genuinely fulfills you —

then you’ve struck the perfect balance between freedom and responsibility.

Money is only valuable when it enhances your life — not when it restricts it. Set your benchmarks, track your progress, and remember: a little fun isn’t financial failure; it’s the fuel that keeps your motivation alive.