What Is a Normal Entertainment Expense in Budgeting?

When creating a family budget, it is important to consider more than just your mortgage payment, utilities, auto insurance and student loans. You'll also want to create a category for entertainment so you have a little money to make some memories with the ones you love. Of course, entertainment expenses will vary among households, but by taking a look at the norm, you'll be better prepared to come up with a figure that suits your family.

TL;DR (Too Long; Didn't Read)

When budgeting, it's good practice to keep the entertainment category around 5 percent of your monthly take-home pay.

What's Included

The first thing you'll need to do in order to come up with an entertainment budget is to list what you want to include in this category. Typically, it includes any expenses related to movies, music, books, trips to a museum and non-educational classes you'd like to take, such as salsa dancing or pottery. This category includes streaming services, but you may have cable listed separately in your budget, especially if you have a bundle for phone, internet and cable. Additionally, some families opt to place vacations within their entertainment budget, while others list it separately.

Stay Around 5 Percent

Quicken lists 5 percent as the norm for an entertainment budget in America. If we use CNBC's reported median household income of $71,781 for middle-class families in Alabama as an example, we'd have $3,589.05 to use toward entertainment expenses for the year. This equals $299.09 per month. Depending on your income and how many family members you have, you may wish to slightly increase or decrease this percentage. In fact, CreditLoan.com suggests 5.1 percent for this category, which would increase your entertainment expenses to $3,660.83 per year or $305.07 per month.

Stretch Your Entertainment Budget

Anyone who is living paycheck to paycheck or working toward paying off debt doesn't have to give up leisure and a little fun once in a while. Instead, with a little creativity, the entertainment budget can be stretched. Look for free programs held at your local library in which you can take part, and instead of dining out at a fancy restaurant, pick up some finger foods and have a picnic at the park. Sometimes, simply getting out of the house and doing something in a different surrounding is enough to get you out of the day-to-day routines that can seem so mundane.

Increase the Expense Over Time

Young adults who are just starting out may not have 5 percent of their income to dedicate toward entertainment expenses. This is often due to having student loans to repay and the fact that they are just starting out at entry-level positions in their chosen fields. As the loans are paid off and promotions are awarded, the entertainment expenses can increase until they reach the normal rate.

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