McKee Financial

6-8-2020 Newsletter: Why You Need Some Fun Money in Your Budget

Do not undervalue the NEED for some fun money in your budget. 

Make sure you don’t skip over the history section of the newsletter this week.  We always find fun things to share, but this week might just surprise you. 


Why You Need Some Fun Money in Your Budget


You work hard for your money. You’ve got money goals—and you’re knocking them out one monthly budget at a time. On top of it all, when your friends ask you to join them for dinner and concerts every weekend, you’re now a pro at knowing when to say, “It’s not in the budget.”

Listen—there’s a time and a season to deny tons of extra costs. Like when you’ve got focused intensity on those early Baby Steps. But some self-care is also important, and you still need to treat yourself—at least a little. Sometimes it’s only very little until you hit that next big goal, but that’s okay!

One way to enjoy life without going financially overboard is to make a budget line for fun money. Yes, really! Here’s how:


What Fun Money Is and Isn’t


First of all, putting fun money in your budget isn’t a green light to drop your money goals or go on a spending free-for-all. Fun money isn’t an excuse to be wasteful—it’s another way to stick to your budget. Remember, you want a zero-based budget, so you should give every single dollar a job. And a fun money line makes you focus all your spending—even the fun stuff—so you don’t accidently waste money on little things here and there.


When you give yourself a budget line for fun, you can spend that amount on whatever you want. This is the money you’ve set aside to use on that fancy cappuccino or the new shoes you don’t need but really want. Also, if you’re married, make sure you and your spouse each have your own fun money lines.

And when the fun money budget line is gone, it’s gone. We repeat: When the fun money budget line is gone—it’s gone.


Why You Need to Plan for Fun Money


We talk a lot about goals and how they need to be the perfect balance of empowering and realistic. Fun money helps you with the realistic side because it lets you stick to your goals and have a treat every now and then.

Fun money also helps you remember a budget isn’t all about restrictions. Money expert and bestselling author Rachel Cruze puts it like this: “A budget doesn’t limit your freedom. It gives you freedom.” To be honest, you’ve got the freedom to put anything you want in your budget. Use it wisely. Hit your needs and goals hard. Once those are covered, then you can have a little fun.

A budget is deciding up front and on purpose what every dollar will do that month. That kind of planning ahead keeps you from feeling guilty when you do spend. When you think of your budget as permission to spend, you get a new perspective on budgeting. You’re giving your money permission to go where you want it to go. But again—use that power wisely!

And that brings us to the best benefit of having some fun money in the budget: When you treat yourself a little, you’re less likely to fall off the goal-crushing wagon completely. It’s like the one cheat meal of the week or the night off from running. That space makes all the hard work seem more doable.


How Much Fun Money Should You Budget?


How much you budget for fun each month depends on several things—like your income, debts and savings goals. You might have room for $100, or maybe just $10 right now.

If you’re just starting on the Baby Steps, keep that fun money to a bare minimum. And get super creative to stretch those dollars! Learn some hacks for your next Starbucks run to get the most caffeine for your money. Get thrifty at the thrift store instead of buying everything new. (Actually—no matter your income or money goals, savings hacks and thrift stores are always a great idea.)

To make it all easier, get yourself our free, on-the-go budgeting tool, EveryDollar. You can add in all those budget lines quickly and easily keep up with your spending.

And remember, if you’re at a place in life where you’ve got only $10 budgeted for fun money, don’t let that get you down. It’s a just season. You’re working on something greater, and it will be worth it!



Interesting Economic Facts


NOT BUYING IT- 39% of investors surveyed as of last Thursday 6/04/20 are “bearish” on US stocks for the upcoming 6 months (source: American Association of Individual Investors).


SO LOW - As of the close of trading on 6/05/20, the yield on the 10-year Treasury note (0.91%) has been below 2%for 212 consecutive trading days, i.e., since 8/01/19, the longest stretch below 2%in US history.  The highest closing yield for the 10-year Treasury note in history was 15.84% on 9/30/81 (source: Treasury Department).


OIL - The price of West Texas Intermediate (WTI) crude oil rose from $18.84 a barrel as of 4/30/20 to $35.49 a barrel by 5/31/20 (up $16.65 a barrel), an +88.4% increase.  Both monthly gains (by dollar and by percentage) are all-time records for WTI crude.  The oil benchmark closed at $39.55 a barrel last Friday 6/05/20 (source: NYMEX).


BEING CAREFUL - Spending by Americans in April 2020 dropped a record 13.6%on a month-over-month basis, i.e., $13.90 trillion of “seasonally adjusted annual spending” in March 2020 free-falling to $12.01 trillion in April 2020, a drop of $1.89 trillion.  If this level of decline continued for 12 consecutive months, that would mathematically be equal to every American household (there are 124.4 million households in the country) reducing their out-of-pocket spending by $15,200over the course of a year (source: Commerce Department).


HIGHEST EVER - As of the end of April 2020, 43 US states reported their highest unemployment rate in history.  US states have measured monthly jobless rates since January 1976 (source: Department of Labor).


LESS MONEY - There were 155.8 million Americans who had jobs as of mid-March 2020.  77% of those workers (119.2 million) have “experienced loss of employment income” since 3/13/20, the date of President Trump’s declaration of a national emergency (source: US Census Bureau Household Pulse Survey: May 21-26).


JUST WAITING - 23% of millennials surveyed indicate they will not be buying a home “anytime soon” as a result of the COVID-19 pandemic.  Millennials were born between 1981-97 and are ages 23-39 in 2020.  The survey was compiled from data gathered from 1,300 American adults in April 2020 (source:


GREAT TIME TO BUY - The average interest rate nationwide on a 30-year fixed rate mortgage fell to 3.15%on Thursday 5/28/20, the lowest ever recorded in US history.  That means home buyers would pay just $430 per month in “principal and interest” payments for every $100,000 borrowed (source: Freddie Mac).


GETTING SMALLER - The median size of 903,000 new single-family homes completed in America during 2019 was 2,301 square feet.  A decade earlier, the median size of 520,000 new single-family homes completed during 2009 was 2,417 square feet (source: Census Bureau).


PLEASE REMAIN SEATED - The 3/27/20 CARES Act allocated $25 billion to the US airline industry to be used for payroll and benefits of individual airline companies.  The $25 billion was allocated to only 11 airlines, with 82% of the money allocated to just 4 airlines (source: CARES Act).


PANDEMIC DEATHS – 6,799 Americans died from the COVID-19 pandemic in the 1-week ending last Friday 6/05/20 at 9am ET, bringing the national total to 108,840.  The 6,799 deaths were up from 6,539 deaths the prior week, breaking a streak of 6 consecutive weeks of declining deaths (source: Meet the Press –First Read).


HARD HIT - Just 2 states –New York and New Jersey– account for 35% of the nation’s COVID-19 deaths as of last Friday morning 6/05/20 at noon ET (source:


SAVING MONEY - Brown University of the Ivy League began the 2019-2020 school year with 38 varsity athletic teams.  On 5/28/20, Brown eliminated 11 of the 38 varsity teams in a cost-cutting effort (source: Golf Digest).


...and for the History Lovers... This Week in History


June 8, 1904

U.S. Marines land in Tangiers, Morocco, to protect U.S. citizens.


June 9, 1931

Robert H. Goddard patents a rocket-fueled aircraft design.


June 10, 1776

The Continental Congress appoints a committee to write a Declaration of Independence.


June 11, 1930

William Beebe, of the New York Zoological Society, dives to a record-setting depth of 1,426 feet off the coast of Bermuda, in a diving chamber called a bathysphere.


June 12, 1931

Gangster Al Capone and 68 of his henchmen are indicted for violating Prohibition laws.


June 13, 1920

The U.S. Post Office Department rules that children may not be sent by parcel post.


June 14, 1951

UNIVAC, the first computer built for commercial purposes, is demonstrated in Philadelphia by Dr. John W. Mauchly and J. Presper Eckert, Jr.


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Ph 812-477-8522 / Fx 812-477-8521



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McKee Financial Resources Inc.

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Securities offered through Registered Representatives of Cambridge Investment Research Inc., a Broker/Dealer, Member FINRA/SIPC. Advisory Services offered through Cambridge Investment Research Advisors, Inc., a Registered Investment Adviser. McKee Financial Resources Inc. and Cambridge are not affiliated.


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