How to Create a Flexible Budget That Doesn’t Shame Your Netflix Indulgence

Luxuries like Netflix and Tidal Music belong in my budget because I value the entertainment. At this point, they are not a “want”, they are a need for my sanity. This war on luxuries invented for millennials like brunch and Netflix is crazy. Why can’t I just add little $14.99 luxuries to my budget without being shamed? Traditional restrictive budgeting is a hassle. Budgeting is only effective when it is created to be flexible enough to handle life’s unexpected curveballs, strict enough to help you hit your goals, and forgiving enough for fun and happiness.

Your money is meant to provide you with freedom. Most budgeting advice comes from a strict, scarcity mindset. That’s exactly why most people cannot stick to a budget, because the advice forces you to strip your life of everything fun and it is unrealistic. Traditional budgeting suggests the 50/30/20 rule to guide you. Here’s the problem with this method; it is vague and saves no space for investing your money. Here’s how you should allocate your budget to allow for little millennial luxuries and flexibility.

40% Survival

We need money for basic survival. According to Maslow’s Hierarchy, basic needs are food, water, warmth, rest, security, and safety. The majority of your budget will be dedicated to your survival because you need to survive before you can thrive. Rent, groceries, utilities, and required medical needs are examples. Once basic needs are met you can focus on living your best life.

25% Non-negotiables

Non-negotiables are expenses that you do not need to survive but you need to thrive. These are the luxuries that traditionally could be a want or need. Your money is not only for your survival, but it is also meant to help you thrive. Wi-Fi, transportation, debt payment, and cellphone service would be considered a non-negotiable. Yes, I absolutely consider Netflix and Tidal Music a non-negotiable. Can you truly believe some people consider cell phones and Wi-Fi a want?!

15% Saving

Can you live off 85% of your monthly income? Per the traditional allocations, 20% of your budget was dedicated to saving, debt payment, and financial goals. While dedicating 15% of your income may seem like a decrease from the traditional method, it is an increase. The 20% towards financial goals is vague and is not dedicated to saving. Preparing for the unexpected is necessary because the unexpected will always happen. Saving is a crucial part of financial freedom and deserves its own category.

10% Investing

If you are not investing money you are losing money. Inflation can range anywhere from 1.5%-3% a year, and the best high yield savings accounts earn between 1.5%-2.5% a year. This means your money is either not working for you or decreasing in value sitting in your bank account. Making an investment that earns at least 5% a year will be the key to growing your money faster. Allocating a small portion of your income to investing now will help the future you become even richer later. You will not invest if you do not make it part of your budget.

10% Negotiables 

The last 10% of your budget is dedicated to whatever it is that makes you happy! Negotiables are purchases that you don’t necessarily need but they make life more enjoyable and may even enhance your quality of life. Clothes shopping, traveling, or fine dining could be part of your negotiables. You can even consider upgrades to your non-negotiables in this category. An example would be a nail salon visit as a non-negotiable, but the frequency or type of appointment can be negotiable. Maybe when money is low you opt-in for just a gel manicure, and hold off on the pedicure or vice versa.

It is more than possible to live the life you love right now while saving for your best life you will be living in the future. This is the most effective way to still afford all of life’s luxuries while still being responsible for your money and budget. Your budget is the well-oiled machine that keeps you surviving, thriving, and happy.