You work hard for your money, and the last thing you want to do is look at your statement at the end of the month and think “where did it all go?”
If you’ve found yourself in that frustrating scenario, you’re not alone. Intuit reported last year that nearly two-thirds of Americans aren’t sure how they spend their money the previous month, and 31% wish they’d spent less.
Building a budget helps, as it allows you to control your spending and carve out room for longer-term financial goals, like growing your savings. But if you’re not also keeping tabs on your recreational spending, you may lose track of where your money is going. As a result, you’re less likely to feel rewarded by your “fun money” — and you may even feel like you wasted it.
To avoid regretful spending, you can take inventory of how you spend your recreational budget, then adjust it to ensure you're spending wisely. This is easier than you think — here’s how to start.
Get Reacquainted With Your Virtual Wallet
Smart spending starts with downloading the PNC Mobile Banking app1. The Spending + Budgets tool in Virtual Wallet® products helps makes it easy to group your spending into categories, like “gas” and “restaurants,” so you know at a glance where your money is going. You can also create a budget for each category and set up notifications to keep your recreational spending in check.
As you look over your transactions from the past few months and analyze your recreational spending, ask yourself:
- Where did I spend more money than I realized?
- Which purchases made me happiest?
- Are there any purchases I regret?
The answers should give you some insight into how rewarding your recreational spending really feels — and where there’s room for improvement. Take note of any areas where you may be over- or under-spending your recreational funds, and make sure the notifications are turned on in your budgets tool to help track your spending.
Compare Your Actual Spending to Your Ideal Spending
Once you know where your recreational funds are going, it’s time to compare that to where you want them to go.
Picture your ideal month. What would you splurge on? Which purchases would make you happiest? How would you feel about your finances?
Now, take note of any differences between your ideal month and your current spending. Maybe you’re buying daily lattes out of convenience, when what you’d really enjoy is one or two luxurious date nights a month. Or maybe you’re browsing Amazon out of boredom, but those impulse buys drain your budget and keep you from purchasing something you really want.
Finally, take note of the similarities. You'll want to keep purchases that feel genuinely rewarding in your recreational budget.
Cut Your Spending — Not Your Happiness
By now, you should see your recreational spending falling into two main categories: Purchases that fit into your ideal month and truly make you happy, and purchases that eat into your budget without much emotional benefit.
The latter group is where you can trim your budget without feeling deprived. So ask yourself what you can cut. If you’re paying for a streaming service out of habit, for example, cancelling might disrupt your schedule for a few days — but after a week, you might not miss it.
Further trim your budget by looking for free or low-cost alternatives to activities you enjoy. A homemade picnic with your family might replace the novelty of ordering in at a fraction of the cost, freeing up more of your recreational budget for what you really want.
Create a Wish List — and Give Yourself Permission to Spend
Once you’ve trimmed your budget, it’s time for the fun part: planning how to spend the funds you just freed up.
Use the ideal month exercise to decide which purchases will make you happiest and make a plan to get them. Highlight purchases you crave the most, that are likely to have a lasting impact on your happiness and fit your current budget. These are great candidates to reward yourself right now.
As long as you can afford it, give yourself permission to splurge on these high-impact purchases. It may seem counterintuitive, but shelling out for what you really want can break the cycle of low-impact spending. Opting for several lower-cost alternatives that offer short-lived satisfaction can sometimes leave you spending way more than you intended, so treat yourself to what you truly want from the start. If you really love it, and it fits your budget, even a pricey purchase is worth it.
Save For Longer-Term Rewards
Chances are, not everything on your wish list fits your budget right now. That’s okay! Make room in your recreational budget for some savings, and you’ll be able to reward yourself soon.
Virtual Wallet helps make it easy. Use the Savings Goals feature to create goals in your Reserve or Growth accounts for longer-term recreational spending. And use Savings Rules to move funds into those accounts on a regular basis, so you can easily stow some recreational funds anytime you get paid.
Consider saving some of your recreational budget, even when you don’t have a specific purchase in mind. It can build up a “fun money” nest egg to cover purchases outside your normal budget when you unexpectedly find something you love.
Finally, remember to savor the moment when you treat yourself. Taking control of your finances means achieving the life you want with no financial regrets, and you deserve to feel great about it.