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Create An Entertainment (at Home) Budget And The Rest is Gravy

January 13, 2012

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If you ask people how often they entertain friends and family at home, you will get a variety of responses ranging from never to all the time. If you asked them why or why not, the answers are just as numerous.

People who entertain at home often will tell you that they love to be around their friends, love to cook and try out new recipes, see it as a way to de-stress after a long workday or week, or love to treat their friends to a good time. People who rarely or never entertain at home will tell you that they are too busy, their home is too small, they suffer from performance anxiety, or they cannot afford to do so.

Entertaining at home does cost money and depending on the style and frequency can add up to some major bucks. But that does not mean you should not do it. Spending time with people you like and who like you has great value. Even without research telling us so, we all know how good we feel after a pleasant evening with friends. So how do you get the benefits of an entertaining life without destroying your savings?

Create an annual entertainment at home budget. An entertainment at home budget is not the same as entertaining at home on a budget, although that is a wise idea; it is a snapshot of how you spend (or want to spend) some of your entertainment dollars. When creating your budget, remember to keep it simple.
  1. Divide your entertainment at home budget into three categories: special occasions (birthdays, graduations, anniversaries), holidays, and all other days.
  2. Estimate how much you plan to spend for each category. Use a budgeting app to track your spending and improve your estimates.
  3. Open an online savings account for each entertainment category, or set the money aside in jars. This idea is similar to creating a vacation or holiday fund with the goal being to use cash you have, not credit. To learn more about available online savings accounts, log onto the web site.
Most people would be surprised to learn how much they spend each year entertaining family and friends at home, and not just during the holidays. However, it is easy to overspend when entertaining at home because who wants to put a price tag on showing family and friends a good time. But if you want to maintain adequate savings, you need to have an idea of what you are spending your money on. Creating a budget for entertaining at home is a great savings technique that will allow you to maintain control of your spending.

If you love entertaining at home and it is just one of the things you would never give up for any amount of money, by all means keep doing it. Just do not do it blindly. Take a few minutes every year to create your entertainment at home budget.
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