3 Tips for Budgeting Impulse Spending

Making a budget. The idea usually conjures up visions of austere living and no fun. Too many so-called experts have given us cookie cutter formulas for budgeting. When you sit down to do a budget, what you must remember is to make it realistic to your needs and wants. If impulse spending is one of your wants, then you must budget for it. If a budget is too strict, you most likely won't stick to it anyway and if you are someone who enjoys impulse spending, you may rebel by spending beyond your means. With a little fine tuning and careful examination of your income and expenses, you can budget for your impulse spending.

First make an accurate list of all of your monthly income and fixed expenses. For many people the income will be solely from a paycheck at a consistent interval. Fixed expenses are: rent or mortgage payment, utilities, telephone, insurance, cable TV, child care, any bill that is paid every month for the same amount and essential for your basic living expenses. Variable expenses are those which we must pay but the amount and necessity varies. Food is essential but the amount varies. Income minus expenses is your net income. Once you know your net income, you know how much you have left over for savings and budgeting for impulse spending.

Second, decide what you want to spend your money on. What really makes you happy. Do you want to eat out every month. Do you want to take a dance class. Do you want to travel. You can have anything you want you just can't have everything you want. Put a percentage of your net income aside each month to spend as you wish. Make sure all your bills are paid first and don't incur any debt. If your net income is $100 and you set the percentage at 10% for your budget for impulse spending that gives you $10 to spend as you wish.

Third, look at where you can increase your net income. One way is to cut your variable spending. For most people the biggest category in variable spending is groceries and the easiest to cut back on. I'm not suggesting you starve yourself but look for items you buy that you really don't need, could get cheaper or could make yourself for less money. $50 saved off the grocery budget could go into your budget for impulse spending and make you happier.

The most important thing to remember when budgeting for impulse spending is to allow yourself to relax about the spending. As long as you are not going into debt, you need to live a little and enjoy life.