Most of us have a checking account. Usually savings. But an account for “fun money”? What even is that? If you’ve never heard of a “fun money” account, then you need to keep reading.
Sticking to a budget can be tough, especially when there’s no wiggle room. When you spend all your money paying bill after bill and never do anything for yourself, it’s easy to fall off the wagon. A fun money account not only helps you stick to your plan but makes it enjoyable. Here’s how:
What is a fun money account?
When setting a family budget, the first thing that you have to do is determine fixed monthly expenses, like rent or mortgage, utilities, and car payments. Anything that’s left over can go towards discretionary expenses, like cable and internet or clothing–and it’s important to set aside some money for yourself, too.
There are lots of different ways you can set aside your “fun money”, though many people like to open an entirely new bank account. That way, you can just set up an automatic transfer each month and keep that money totally separate. From there, you can either let the money add up and save it for something big, or spend it all as soon as you get it. It’s fun money! It’s entirely up to you!
Where can you spend fun money?
Short answer: anywhere you want. Slightly longer answer: on anything that is exclusively for your enjoyment, but doesn’t really serve a practical purpose. Some common examples include:
- Specialty hair care services, like color or straightening treatments
- Magazines and books
- Hobby supplies, like camping equipment or crafting supplies
- Concert or museum tickets
Benefits of using fun money
Working fun money into your budget simply helps make things easier. Rather than spending more money than you have and going into the red every month, or allowing yourself no treats and going crazy, fun money allows you to splurge . . . within reason.
As an added benefit, you may find that allowing yourself some spending cash actually makes you more frugal. How you may ask? Well, when you have a little bit of money just for you, you might find yourself really weighing your purchasing decisions and being more thoughtful about your spending habits. After all . . . is that mocha latte really worth $5 when it’s coming out of your personal money? Nah. Probably not.