$1,000 Challenge, Part 7: Spending Smarter on Entertainment

Alamy When you're trying to save money, the first piece of advice any financial expert will offer is, "Cut back on your entertainment spending." Movies, dinners out, drinks before the theater -- they all seem extravagant when you're trying to stretch every dollar. If you're carrying credit card debt, aren't saving enough for retirement, or don't have an adequate emergency fund, you probably need to cut back on the good times now to avoid bad times later. And if you've seen your income drop or if you've lost your job, it's even more important. But first, you need to be having some fun you can cut back on. So far in The $1,000 Challenge, I've shown you how I cut more than $600 from six of my family's Top 10 spending categories. (If you missed any of the previous sections here on DailyFinance.com, check out the series so far.) But when I got to entertainment spending, I didn't want to spend less –- I wanted to spend more. Sure, we were spending a decent amount in this category. The problem was that we weren't getting a whole lot of fun for our funds. Scanning our list of entertainment spending, a few things were missing: limos, fine restaurants, concerts, plays, nightclubs and -- vitally -- babysitters. Instead were the local sports pub, the diner and, seventh on the list, McDonald's (MCD). All exceedingly family-friendly, and all places we regularly take my boy, Funny Money Jr. or, as I call him, Lil' Money ('cuz that's all he leaves us.) But entertaining Lil' Money was leaving his parents with Lil' Fun. Less than one-sixth of our entertainment spending was on real date nights. Instead of whispering sweet nothings into my money honey's ear on the dance floor, I'd been shouting above the din of the Burger King (BKW) playground. A good spending plan isn't just about cutting back –- it's also about getting the best value for the money you do spend. In the first installments of this budget-cutting challenge, we looked at eliminating the sorts of spending you won't miss -– unused gym memberships, subscriptions, cable channels you don't watch, old email accounts, and so on. Now it's time to do the same with entertainment. Cut loose the low-value stuff that you do without thinking: pizzas and carryout you pick up because you don't plan for dinner. Hitting the bar because you didn't plan your weekend. Dropping $60 or more at a casual restaurant for food you could make better at home, just to get out of the house. Instead, start doing that planning -- and saving. Throw a potluck with friends, save some of the money you'd spend on a mediocre restaurant, and then next time, go someplace really nice with your partner. Plan your menus and grocery shopping (which we'll discuss in a later installment) and eat budget-friendly, home-cooked meals more often (or -– even easier -– leftovers) so you can save the takeout money for a really great concert or weekend activity. The point isn't to cut out all your fun in some kind of crazy crash-spending-diet that you'll never be able to sustain. Leave some room to spend on fun. Just make sure you're getting your money's worth. Substitute experiences, which can be cheap or even free, for mindless spending just to have something to do. Once you weigh value against what you're spending and get a little creative, you can find lots of cheap fun. If you want more details, check out the book "The $1,000 Challenge: How One Family Slashed Its Budget Without Moving Under a Bridge or Living on Government Cheese." Here are a few more ideas on stretching your entertainment bucks: Movies: We go to earlier shows, which can be cheaper, and joined the local movie theater's customer loyalty program, which rewards us with free sodas and popcorn every so often, plus discounts on tickets. Also, try saving some movies for home. Mrs. Funny Money and I make it a point to see only "big-screen worthy" films in a theater, and to save the flimsy rom-coms and other mediocrities for cable or DVDs brought home from the library. I don't regret spending to see "Gravity" in 3-D with Dolby surround sound, but I'd sure hate to pay $40 to see "Scary Movie 5." Dining out: Once again, going early can save. Try hitting the early bird special, look for prix fixe meals, and watch your local newspaper's entertainment sections for specials. One of my friends joined a secret shopper club where he's reimbursed for dining out if he sends in a detailed report on the service, quality and other aspects of the meal. (Check out the details from the Mystery Shopping Providers Association North America.) Another way to save on dining out is to pre-game: Have those expensive drinks and shrimp cocktails at home before you hit the restaurant, or save the coffee and dessert for when you get back. Also don't neglect deal services, such as Groupon (GRPN) and LivingSocial or DealChicken, which is tied to various local newspapers. Also, check with your credit card issuers for discounts and deals. If you've got kids that need tending while you're out on the town, consider trading dinners for lunches. You can drop the kids at an activity, then hit the restaurant when it's less crowded; lunch specials are cheaper, and you're less prone to order an entire bottle of wine. We scored cheap sitting, thanks to the parents night out sponsored by our local gym, or you can just arrange a sitter exchange with a neighbor: You take their kids this Saturday night, and they watch yours next weekend. The quest to save can become all about spending less, but you also need to weigh how much you get for your money. In our case, it wasn't enough. And since we couldn't add a couple hundred bucks a month for visits to restaurants that don't hand out crayons when they seat you, we not only needed to spend less, but we also needed to think more about where we did that spending. With entertainment averaging $85 a week, Mrs. Funny Money and I decided we could trim $25 week by cutting out low-value spending, which, at 4.3 weeks per month, gave us savings of $108 a month. Since money conversations can be sticky, I decided we should celebrate our new approach to fun at the Funny Money house and planned a sophisticated night of grown-up amusement. It would be just the kind of adults-only bonding that holds a marriage together. "Honey," I said to Mrs. Funny Money, "let's go out and have some fun tonight." "You bet!" she replied, heading for the door. "But if you get home before I do, leave the porch light on."