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A budget is much more effective if you include a savings plan for fun things. It gives you motivation to stick to a budget and give you something to look forward to throughout the year.

Collette Zeller and her husband are saving for a trip to Italy for their fifth anniversary. The trip is two years out, but their new year’s budget includes a monthly savings plan.

The new year is a time for newly turned leaves. For most people, the Zellers excluded, it’s another opportunity to try, and likely fail by February, to diet and budget.

“The human brain has a lot psychological resistance to the entire idea of budgeting and dieting,” said financial psychologist Brad Klontz. To purposely cut out enjoyable things creates a sense of deprivation and it leads to overspending and overeating.

In the dieting world, scheduling periodic “cheat days” when one can splurge on calories solves that sense of deprivation.

In the personal finance world, budgeting for a reward purchase can generate similar motivation. Klontz recommends that one’s “spending plan” — he’s opposed to using the word budget — should be “entirely focused on fun things.” Though, that doesn’t mean to spend irresponsibly. Everyone’s first priority should be getting out of debt, but financial planners agree that building in a fun fund can motivate one to stick to a restrictive budget.

When people get really excited about a certain goal, like a vacation or a new TV, "saving is almost effortless. It becomes fun to do it," said Klontz.

Reward spending is good for your budget

Budgets should include short-term rewards, said Klontz. A savings plan “shouldn’t be strictly for something that’s 40 years down the road, like your retirement.”

Having a concrete, short-term goal in mind encourages smart everyday spending. With a tangible goal, like tickets to a bowl game or a backpacking trip on the Pacific Crest Trail, it becomes easier to forgo that expensive latte or a trip to the movies. And those choices can improve overall spending behavior for the long-term.

Although, while “it’s nice to have a carrot to look forward to, it shouldn’t be a substitute for getting out of debt,” said Eric Brotman, president and managing principal for Brotman Financial Group.

Collette, a 28-year-old wife of three years and mother of two, and her husband, David, paid their debts first. When first married, they made a plan to pay them off a little bit each month. But as their debt disappeared, they continued to put money aside, this time for fun things. They saved for a robot vacuum, a Vitamix blender and a trip to Vegas. It was easy to save since they were already living on a percentage of their income, Collette Zeller said. They made saving a lifelong commitment.

Financial advisers commend the Zeller method of lifelong saving. “Budgeting can sound painful, it should be about lifestyle changes,” said Brotman. And a lifestyle that involves periodic saving and responsible spending is a healthy one.

Putting the fun into savings funds

The first thing individuals and couples should do is sit down and make a list of current spending habits and goals.

“Write down everything you spend in two weeks or a month,” recommended Melissa Larson, an accounting professor at Brigham Young University. Seeing expenses on paper will reveal frivolous spending and show where to scrimp and save.

Next, do what the Zellers do and “write down areas where you want to spend your money” in order of priority, said Klontz.

“When we were married, we both had lists in our heads of things that we liked to get, so we listed all of those things out and then we prioritized them together," said Collette Zeller.

For the first item on the list, figure out how much it will cost, divide that cost by a number of months, and then put aside that amount each month, suggested Brotman.

Then set up a goal-specific savings fund. For long-term saving, use a high-yielding savings account that cannot be easily tapped. For short-term savings and easy access, use a savings account that is attached to a checking account. And for an in-between account that allows higher interest and fairly easy access, Brotman suggested a money market account.

And instead of generically naming the account “savings fund,” specifically name it “Italy fund," said Klontz. The name creates an emotional attachment to the money and "will increase your savings at a radical rate."

“It (also) helps to have pictures around the house of your goal. The more you can get excited about images, the easier it is to curb our impulsive, carnal desires for irresponsible spending,” he said.

To make saving less painful, it's recommended to set up an automatic transfer of a portion from every paycheck to savings.

“You just get used to living on 70 percent on your income,” said Brotman.

For a trip, Brotman suggested paying for everything with a rewards credit card. Then, on returning home, use savings to immediately pay off the credit card.

A smart budgeting plan “is the hardest thing to start,” admitted Larson. But incoporating rewards can make a budget “enabling rather than restricting.”

“We would be worse off if we didn’t save for fun things,” she said. “What else are we living for?”

dsutton@deseretnews.com | Twitter: @debylene