When it comes to budgeting for indulgences (shopping, entertainment), is it better to get the average spending and set that aside, or set a reasonable amount and try to stick to that budget?

Hi Anon,

Personally, setting aside a reasonable amount and trying to stick to that budget works better for me. This allows me to pace myself throughout the month. For example, if I've spent more than half of my monthly budget set out by the first half of the month, I would know that I need to spend less in the remaining half of the month or risk overspending.

But I would also say a budget is a gauge. There are months where I will exceed the budgeted amount, and also some others where I will underspend.​​​

Keep the spending as a percentage of your income (e.g. 10%).

The potential issue with the former method is that you have been consistently been over-spending on indulgences and using an average of that amount would still promote buying.