Remember when we were kids and the most exciting part of the week was getting those few dollars of pocket-money? We’d eagerly wait for the sweet cash to touch our paws and then BAM! We were off down the street to the nearest candy or ice cream store.
Ahh… those were the days…
Seriously though, what happened to us? When did we decide that we don’t need pocket-money anymore? Was it when we grew up and were burdened with the responsibilities of paying bills on time? What a drag. I want candy, damn it! Don’t you?
Over the last 18 months or so I’ve been running a little experiment with Mrs. Cloud Productivity regarding our finances. Using an awesome personal money management tool called You Need A Budget, or YNAB for short, the experiment is this… fun money. Also, I highly recommend trying YNAB. If you like it, it’s only $60 (no subscription). I don’t make any money of this referral, I just find a lot of value in using it.
With YNAB, or any kind of budget, you essentially need to allocate portions of money that’s incoming to expenses you anticipate will be upcoming. The sad thing about all this is that rarely does a budget scream “fun.”
We have an expenses category in YNAB simply called “Fun Money”. Fun money is our grown-ups name for pocket-money. Exactly the same concept though, with basic rules.
Fun Money Rules
- The fun money you are allocated is yours
- There is absolutely no obligation to spend fun money on grown-up stuff (such as bills etc.)
- There is no obligation to spend fun money at all
- There is no obligation to save fun money
- Have fun with your fun money
I think you can see where I’m going with this. Each week we get $40 each to spend however we want and on whatever we want. No need to ask anyone for permission and there’s no need to worry about how spending your fun money will affect the rest of the budget.
$40 isn’t a lot of money, and that’s ok. The idea is that this money is for things like coffees, snacks and other odds and ends that you want to get for yourself. All the big stuff like mortgage payments, student loans and groceries is already budgeted for, so this $40 is all yours.
Some weeks we may not even spend $40. In fact, if I take my lunch to work through the week I can end up saving the whole lot. That means that after just a few short weeks I’ve effectively saved my fun money and can go out and spoil myself with a PlayStation 4 (soon… real soon).
So you see, even though we’re all grown up now, that doesn’t mean money has to be all boring and burdensome. Give yourself some wiggle room. I guarantee that you’ll love the freedom of not feeling guilty about spending the collective money and you’ll be able to run down the street, like your old self, to buy that Mars or enjoy coffee and cake whenever you like.
Do you have another way of handling small personal incidental expenses? I’d love to hear your thoughts in the comments below!