How Much Should You Spend on Fun Stuff?

Traditional advice follows the 50/30/20 model: 50% on needs, 30% on wants, 20% on savings. But I don't agree-here's the number I landed on instead, and how spending less on the "fun stuff" supercharges your financial freedom timeline.
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Reminder: I am not a licensed financial professional and this is not financial advice.
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I’m Katie, a personal finance content creator on a mission to make everyone else as obsessed with their financial health as I am. With small tweaks and just a little more awareness, you can live a richer, happier life. I started writing about money in 2018.
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00:00 - 50/30/20
00.51 - Optimal Breakdown
01.20 - 12% Breakdown
02.22 - 40% Save Rate
02.52 - Phases of Life
04.23 - Higher Salary Luxury
05.05 - Compound Interest & ROI
05.32 - OUTRO

[@elizabethnance2978]

PLEASE run for office now! I’ll ecstatically donate to your campaign AND vote for you and your Universal Daycare platform!!!🤜🏻🤛🏻

[@thousandstar]

Sharing this with the homies . All my friend admit were afraid to learn about money and it's time to change that

[@CarlosRamos-xr9rj]

I use 50/30/20 as a guideline. Keep my wants under 50. Needs always at 20. And save at least 30. If my wants falls to 45 then my saving jumps to 35. Point is I try to keep overhead low, still get to enjoy the present, and preparing for the future.

[@jacobside2656]

60% is saving/investing, 30% needs, 10% wants, and 10% feels like I spent too much on pointless things.

[@jared_does_hardmoney]

For myself personally as someone who doesn't have W2 income, I find a tiered bracket system to be much more effective. For my first $3,100 of monthly income, 10% goes to tithe, 5% goes to giving, 15% is set aside for taxes, and the rest goes into my 'Essential Expenses' account. For every dollar I make above $3,100 a month, 10% goes to tithe, 5% to giving, 15% set aside for taxes, 35% for lifestyle spending, and the remaining 40% into a business profit/savings account

[@johannamiller527]

The most important part of the 50/30/20 rule is the "50." The rule was designed to maximize your resilience to financial shocks, like job loss, long-term illness, or divorce. All of those things can reduce household income by about 50%. So if you can fit your fixed expenses within 50% of your take-home pay, you can withstand just about anything life throws at you.

[@2FINE4YOUBABYGIRL]

Fun should be relatively free things that give you intrinsic joy like writing, reading, exercising, talking to friends, window shopping.

[@cottonstatesbabe]

Hi Katie!! Love your content! I earn what I would consider a very good income for someone my age and in my city. However, after hearing your thoughts on the 40% save rate, and now in this video, a 12% fun money rate, I’m not so sure I’m your audience when it comes to my income. 12% (including saving for travel and larger purchases) is barely enough for me to leave the house. Can you elaborate on what you mean by “high earners” to whom this advice applies? I want to know if this is advice targeted at ME, or someone with a different income.

[@michelleharris9581]

Love the book in the background.

[@user-lu5dt6jk5z]

I think this is a great rule to live by but it's also important to remember these aren't hard, steadfast numbers. You'll have to adjust according to your lifestyle and obligations just like Katie mentioned! One should strive for financial freedom though!

[@hardy9429]

I swing form all to nothing and back again

[@punisher6659]

Great content. I will be forwarding this.

[@Sindibad007]

New content when !? 😄

[@maggie_noon]

Thoughts on whether you count a 401K in the 38% savings if it comes out of your net instead of gross pay?

[@Sindibad007]

I am already a 11% for fun and I think that is too much 🤣

[@emmablue7669]

Doesn’t this imply that the full 38% is going to investing though? What about mid-term and emergency savings?

[@mikelemay937]

❤❤❤❤❤

[@asergb]

My fun rate is at < 1% i really need to get a life