Many of us acknowledge that it would be fun to travel more, eat out a little more, or be able to splurge on occasion. However, these are items that don’t easily fit into the budget. If you want to be able to enjoy more of the fun things in life, you can create a lifestyle fund designed to help you out. Even better: Get the money for your lifestyle fund with the help of supplemental income.
How to Create a Fun Fund Today for Tomorrow
One of the basics of personal finances is building an emergency fund. You know that you should save up money for a rainy day. However, few of us think of creating a fun fund. This is fund that grows so that you can use it to enjoy things like taking a trip, splurging a little when you go out, or buying a new outfit when you want one. A fun fund is money that’s there, waiting for you, when you want it.
If you are going to create a fun fund, though, you can’t have it detract from your other financial goals. You still need a solid emergency fund, and you need to have little debt. It is also important to save for retirement. With all these demands on your pocketbook, where will you find the money for your fun fund?
The answer: Supplemental income. There are a number of things you can do to help fund your lifestyle. You can start a side business, work a part-time job or monetize a web site. Use your income from a side hustle to build up your fun fund. Once you get a regular stream of income going into your fun fund, you can begin to dip into.
Put Together Your Own Lifestyle Dividend Portfolio
Another idea for creating your lifestyle fund is to put together a dividend portfolio that provides you with regular passive income that can go toward your lifestyle expenses. Look for dividend stocks that offer solid yields of between 3% and 6%, and look for companies that have a history of maintaining “ or even raising “ dividends. You will receive regular payouts that can be applied toward your lifestyle.
If you have the option, arrange to have your payouts directly deposited into a high-yield account. If you are paid by check, deposit those dividends into the high-yield account as soon as possible. When you create a lifestyle dividend portfolio, all of the money should go right into your fun fund. That way, it grows at a relatively high yield (for cash), and is liquid so that you have easy access to it when you are ready for it.
You really can live the lifestyle you want without breaking your budget. However, it takes planning. Rather than cut back on expenses, you can use supplemental income to create a lifestyle fund that allows you to do what you want, when you want to do it. You may need to do a little extra work to get things started, but once you are in the habit, and once your supplemental income is steady, you will have a fairly reliable income stream that can be used on fun.