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One of the first things we learn as adults is that very little income ends up designated for fun. If we use too much of it for pleasure, then there's not enough left for food, rent, electricity, water, and to pay our phone and credit card bills!

This realization can be pretty depressing.

It's time to get past the notion that there's no money for fun. There absolutely is! The key to having enough money to have a good time is to be smart with it in the first place. Using classic and simple-as-pie financial planning tools, you must make fun money a priority in your budget. A bit of planning ahead will ensure that you can pay your bills and still have enough left over for nights out with your friends or for traveling the world.

Here are five easy things you can start doing right away to hit all the right finance notes and set fun right at the top of your priority list!

1. Make a budget and set goals

Budgeting for your monthly expenses is the first step in any good financial plan. If you don't know where your money's going, you'll never be able to make the right choices. Budgeting will help you understand where you can reduce spending to stay on track. What this means is that, truly, you can't have everything. It's not possible to have every new gadget, every up-to-date fashion accessory, a new car, and have money left for vacations and regular party nights. Budgeting means that you need to figure out your priorities and focus on spending money on those things. What's most important to you?

In the case of a Music-Loving Party Animal, a short-term goal might be to save enough money to hit the two best music festivals next summer. For a Foodie Reveler, perhaps you'd want to start diverting more of your money toward checking out the best new restaurants in town. Carmen Sandiegos (aka World Travelers) definitely need some great saving chops to be able to live a little less Hollywood and a little more with savings in mind. Budgeting and personal goal-setting are the two most important weapons in your financial planning arsenal!

To do this right, start a "Fun Money" chequing account and put some of your money in it after every paycheque. Use this account to save up for travel or fun outings. Whenever you go out, take your money out of this account physically and use that instead of your credit card. If you've spent all the money in the account, then you simply can't afford to go out until you refill it. If you want to go out more, you've got to make that a priority. Do you have a gym membership that you're paying for and not really using? More data on your phone than you need? Get rid of all unnecessary spending that doesn't go toward making you happy. Prioritize your spending to match with your goals, whatever they are.

2. Underspend

Overspending (spending more money than you make) is one of the easiest ways to get yourself into money trouble. With access to credit and a thousand ways to spend money, it's very tempting to splurge and splurge until you're in a deep debt hole. But instead of overspending, try underspending. Look at how much money is coming in every month from paycheques and how much is going out to pay for credit bills and basic amenities like your housing and food. If you find that your credit bills seem to only be going up every month, it's time to adjust your spending habits. Ideally you should spend less than you make. This means you will have money left over at the end of the month to divert to your fun money account. Of course, there are two ways to underspend: spend less — or earn more.

3. Start saving for retirement

An older couple and their dog sitting on a park bench looking out at the water
Photo by Nathália Bariani on Unsplash
It seems far away when you're young, but starting to put money aside now, even a bit at a time, will ensure that you not only have fun today and tomorrow, but when you're old and grey

What? Me? Really?

It seems far away when you're young, but starting to put money aside now, even a bit at a time, will ensure that you not only have fun today and tomorrow, but when you're old and grey. If you aren't sure how to start, there are a few simple strategies to get the ball rolling. Many employers will match your retirement contributions up to a certain percentage or amount. The next step is automatic payments into a tax sheltered plan like a 401k, IRA, RRSP, life insurance, or an employer pension plan. The worst thing to do is never start saving or planning for your retirement because you're too busy having fun today. You know what all rich old people who made their own fortunes have in common? They made being rich a priority when they were young. They didn't just focus on having fun today, but actively thought about having fun in the future. Contribute a bit at a time and you'll be reaping major rewards down the road.

4. Start saving your paperwork!

How does paperwork equal more fun money?

Consider this: keeping track of your papers means you can have all your documents ready at tax time, which can help your accountant prepare your tax returns to get the most money back. According to Turbotax, keeping track of moving costs if you move 50 miles for a new job, charitable contributions, business expenses, and many other bills can be written off at tax time if your accountant knows what they're doing. All this neat paperwork means you get more money back from the government.

If you don't have a good filing system for your important financial records, you're risking a whole lot of chicken-headed running around looking for them when you need them the most. For things like employment records, tax filings, investment accounts, legal documents, identity cards, and anything else you need to keep, you should get a safe and organized place to store them all.

For more information, we recommend our article on the subject organizing your financial life. We also recommend making digital backups and at least two physical copies of anything you consider important. Keeping your papers in order will help you get and make the most of your money.

5. Start an emergency fund

Accidents happen, and financial emergencies are an unpleasant reality of life. Whether it's a new bumper for your car or a filling for a cavity, there are times when you need to dip into an emergency fund. Without emergency savings, you can be forced to use your fun money (NOT THAT!!!) or worse, have to use credit to cover it. This is one way that people get into ugly debt cycles. Having an emergency fund is the best way to protect yourself against accidents and keep your Fun Money account dedicated to good times, all the time.

As an adult, having enough money for fun does take some sober planning, it's true. But the more you plan, the more fun you can have! Isn't that worth the effort?

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