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Denying yourself any pleasure with your money will only serve to frustrate you, and eventually sour you on the whole concept of a budget. This is where your entertainment fund comes into play.

The entertainment fund is money that MUST be spent every month. As well, it is money that must be spent in whatever frivolous and unnecessary manner you wish. A great massage, a fancy dinner out, or a day trip to the ski hill, all are an acceptable use of entertainment money. Aim to have about 10% of your monthly income in this fund as well. Any less, and the satisfaction of spending without guilt will be too minimal to keep you motivated to stick to your budget.

If possible, an education fund is an excellent division of your income as well. Whether you save your education fund for a child's future use, or use it to further your own knowledge of investments and money management, ensuring an increase in your learning is always a good investment. Put your next 10% away for educational uses. As any biologist will tell you, "If you're not growing, you're dying." Give your mind the funds it needs to ensure its continuing growth.

If you've been following along, you've realized that this plan has left 60% of your net monthly income for your necessities. If you cannot manage on 60%, obviously you can adjust the percentages. However, you should make sure all of your funds are having some percentage of your income added to them monthly.

T. Harv Eker, the C.E.O. of Peak Potentials, the fastest growing self-improvement company in North America, has examined and conducted numerous studies of the habits, education, I.Q. and upbringing of thousands of North America's millionaires. A full 100% of the millionaires studied had only ONE thing in common. Their age, intelligence and education had no parallels. Their one similarity was that they were all excellent money managers.

Budgeting is the essence of money management. By starting now, you will be amazed how your life will move from a "check to check" lifestyle to one in which you have money to satisfy every need, as well as a healthy nest egg for the future. At first, it's as simple as putting your money into a labeled jar. If that's all it takes to earn your freedom from the daily grind, isn't it worth a bit of time?

Learn more about this author, Kathryn Lavallee.
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