I love doing fun things! Who doesn’t? Living in Europe provides me with a new playground of opportunities, and after being in France for more than a year I can look back and see how much money I have spent on that fun. My budget is not unlimited, so for the next year I am taking a more structured approach to determining what kind of fun my family values most.
Carl Richards, one of my favorites in the financial planning world, blogged about calculating the price of fun. I like calculations. It makes something that seems abstract measurable. Here is how you calculate the price of fun:
Step 1: Calculate the total amount you spend on a fun activity or item. We’ll call this the cost of fun.
Step 2: Make a guess at how many units of fun you will get from that activity or item on a scale from 1 (least fun) to 10 (most fun).
Step 3: Divide the cost of fun by the units of fun. This is your cost per unit of fun (CPUF).
Step 4: Compare the CPUF for various fun activities or items to determine which you value more. You should be spending your money on the ones that are the most valuable to you.
For me, I love to travel. In the travel category, I wanted to see the CPUF of different kinds of travel. I broke our travel into three groups: 1) 3-4-day weekend trips flying somewhere direct, 2) 7-9 day trips further away, 3) 3-5 day road trips with the dog. It surprised me to figure out which one has the most value (i.e. lower CPUF).
|Type of Travel||Cost of Fun||Units of Fun||CPUF|
|3-4-day weekend trips||$2,000||10||$200 per unit of fun|
|7-9 day trips further away||$4,400||8||$550 per unit of fun|
|3-5 day road trips with the dog||$1,500||8||$188 per unit of fun|
Wind blowing stuff, right!? I have already started putting this information to work for 2019. My kids get two weeks of vacation every six weeks plus a ton of catholic and World War II related holidays, and summer vacation. That is approximately 156 days off each year or 43% of the year, and lots of potential for travel. Instead of the big trips, we are going to focus on the shorter ones, which keep our CPUF down and maximize our FUN.
Try this with your family and see how you can maximize your fun.