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Many times when people first create a budget (especially if the goal is to get out of debt) there is a tendency to be too restrictive. If someone makes $2000 per month, and has $1500 per month in bills, they might allot the remaining $500 to debt reduction. While I believe in a zero-based budget, I also believe in building what most people think of as fun money or blow money into that zero-based budget. For example, if I were trying to pay off debt (which I am), I wouldn’t put every single extra penny toward my debt. I might be tempted to, but in the past the result was that I ended up even deeper in debt as a result — especially if I was also cutting back in other areas at the same time.

Why? Because when things are too restrictive, there isn’t any room for error. And once you’ve blown the budget, you may feel like “oh, what the heck, I’ve already blown things for this month, I may as well buy ____ too.” You may vow to do better next month instead, only to find yourself even more behind the following month. But I’ve found that what works best is starting over today. Don’t wait for next month, and don’t feel like a failure if you’ve gone over on a portion of the budget. Building a little flexibility and fun money into the budget can help with this.

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