Reader Molly has an interesting approach to budgeting: instead of just setting aside money for recreation, she only allows herself that money after she accomplishes other goals and chores -- not unlike the allowance you got when you were a kid.
Molly explains how it works for her:
I have some expensive hobbies (photography, bicycles, etc.) with essentially no limit on what one could spend. Before I figured this out, I'd agonise over when exactly it was OK to pull the trigger on that new lens/bike/camera bag. And probably spend too much overall.
So I set a budget for what's reasonable: for me it's around $US60 a week that I think is reasonable to spend on hobbies.
But I don't just save $US60 a week. I use it to incentivise other things I should be doing. If I work out, I can put $US10 in the jar. Completing a Rosetta Stone Spanish lesson is $US1 (max two per day). If I meditate every day all week, I can have $US10 at the end of the week (trying to encourage consistency). If I were a smoker, I'd totally contribute the price of every usual pack of cigarettes I didn't buy.
There are bonuses possible, too: If I sell old crap, half goes to the hobby fund and half to savings. Unless I sold a hobby item (say, a lens), in which case 100% goes back into the fund to discourage hoarding.
This has lots of benefits. it sets a cap on my spending, makes me absolutely anxious to do things that are good for me (so I can put more cash in the jar), and allows me to relax when there is something new I'm coveting... it just goes on the list and I can wait for it. Or I head to the basement to see what else I can sell to speed up the process.
It seems complicated at first, but you can start simply, adding in other incentives or tweaks to fit your own goals and budgetary needs. If you've been having trouble getting things done -- or trouble spending too much money -- this is a pretty interesting approach.