The Fun Money System

Fun and money. Two happy things that, when combined, equal out to fantastical amounts of joy for everyone in our family.

USCurrency_Federal_ReserveI wrote in my last money post about our budgeting scheme in an effort to clue everyone into how we use money to create a bit more of a stress-free and happy life. As you can see by the handy chart I made in that post, part of our budget is dedicated specifically to addressing our “Wants”–the frivolous items and luxuries that we want but don’t need to survive. For example and in no particular order: video games, fancy Starbucks drinks, cute scarves, books, movie dates, dinners at restaurants, clothes, manicures, hair cuts, booze, Magic tournaments, birthday gifts, Christmas gifts, gifts for family and friends, flowers “just because”, and so on and on forever.

Having money set aside in our budget for these things was initially a super helpful way to make sure that we didn’t go insane buying stuff we didn’t need. But what our initial budget failed to address is the delicate and complicated inter-workings of a married couple trying to decide what exactly is a want and how much want spending each person should get.

In our relationship, I am usually a conservative spender. I don’t mind denying myself the pleasures of a dinner at a restaurant or a new pair of shoes if I can put that same $30 in a piggy bank. Zach, on the other hand, likes to have a healthy amount of fun even if it means doling out the dough. He likes to keep things interesting and help us have a good time within our budget without feeling deprived.

Typically, we are able to maintain a balance between saving and spending as a couple. However, when we first developed our budget, we had a really tough time partitioning off our fun money appropriately. Sure, we had a lump sum to spend, but we each had different ideas on what to do with it. Zach wanted to get whatever he wanted whenever, and I wanted to hoard it all and secretly save it up for something or use it to buy decoration for the house. Since I was the Keeper of the Budget, I monitored our joint account and followed up and logged every. single. transaction. Each of Zach’s fun purchases came under my microscope, and since I wasn’t spending much on fun things for myself, I gave him a hard time about a lot of his purchases and tried to guilt him into spending less.

This completely contradicted everything we have agreed on with our original budget. We were supposed to have wants, and we were supposed to spend that money on wants and fun things. But the issue was that things Zach saw as his fun wants, I saw as unnecessary altogether. This created a bit on tension, as I was always following up on debits and he was wondering why the heck I was on him about spending $7 at WalMart.

Then one day, I stumbled across this series of blog posts on PocketMint called the Conflict-Free Family Budget.  The Conflict-Free Family Budget system is simple and elegant and wonderful in every way:

Each family member has a set amount of money that they can use to spend in whatever way they please–no questions asked, no bank accounts monitored.

Cue the choirs of angels in heaven, we finally had a solution.

Zach and I decided that we wanted to have entirely separate bank accounts just for our fun money. That way I wouldn’t even have to see what he was buying, and we would never run the risk of using too much fun money and cutting into our mutual Needs money or not using enough of our fun money and losing it. We decided on an online bank, opened up two completely separate accounts, and set up transfers with our main, joint household account.

We’ve been using this system for almost a year now, and we’ve loved every second of it. Initially, we had $200 each per month to spend as our fun money. Recently we realized that $200 was a little bit excessive because neither of us have that much stuff we want. Usually we just end up blowing all our money on stuff that isn’t really necessary. I think this is because we’ve both developed an aversion to shopping in general and wasting money on stuff isn’t something we do now, at least not as often as we did a year ago. We’ve adjusted our budget to half that amount for now and are using the extra to go towards paying off debt so we can be closer to our goal.

Some of the things we spend our fun money on include:

  • Dining expenses beyond what we’d normally buy, including eating out at restaurants, ‘splurge’ foods like desserts, and alcohol
  • Clothing, shoes, and accessories
  • Entertainment related-spending, including Redbox rentals, video games, movie and event tickets, campsite fees, travel-related expenses, etc.
  • Home decor
  • Gifts for birthdays, Christmas, holidays, and whatever reason both for ourselves and our loved ones
  • Gym memberships or yoga classes or workout-related accessories like running shoes
  • Non-essential beauty/health stuff like haircuts, eye brow waxing, massages, etc.
  • Any and pretty much all “stuff” purchases for ourselves or our house

It’s great to finally have a system that works for us and allows us to spend money on fun things and little luxuries while still having money to keep to cover our other Wants (our smart phone data plan and home Internet service) and the things that we Need (groceries, utilities, and a place to live).

We’ve found that a few things have changed because of our Fun Money system. For example, I like to try to buy something for Zach or something we can both enjoy every month, and he usually does the same. Getting gifts (even little things) and experiences that come from the other person’s Fun Money is really a meaningful gesture now. It feels like we’re actually making sacrifices to do nice things for each other, rather than just spending out of our regular account–it seems more special and thoughtful this way.

At the same time, we also spend a lot less than we used to. Mostly because we don’t want to buy lots of crap anymore, and also because we’ve prioritized our personal spending to include more shared experiences. I’ve elected to only get my hair cut once a year because I’d rather spend my money on eating out for a meal or two. Zach doesn’t buy new video games so that he has more money to spend on other things like taking me to the movies or playing in a Magic tournament with his brother. Overall, the Fun Money system makes us much more thoughtful and deliberate with our Wants spending, which keeps us from over-consuming and over spending. It’s the icing on the cake to our budget success (so far).

How do you budget family spending? Do you have a Fun Money System in your house? What budget tricks or tips do you recommend? Leave a comment so we can chat!

JD of  More Than Money posted a link to this post on Get Rich Slowly, which caused my blog to have a spike in visitors. I wanted to say “hi” to those of you who have stopped by because of his link. Thanks for reading! If you like this post, feel free to subscribe to receive my blog updates via email by hitting the gray “Subscribe” button over on the sidebar or bookmark the RSS feed of my posts by clicking the gray RSS icon OR add my blog to your preferred blog reader. Thanks again for visiting!

7 thoughts on “The Fun Money System

  1. Pingback: Best Self Improvement Blog

  2. My husband and I follow the same practice when it comes to fun money and it works so well for us! Our friends make fun of us when we go out because we pay separately, but it totally works! Plus, if we don’t spend all of our money during a given month we get to keep the extra and save it for the future. For example, I have been careful not to spend all of my monthly fun money ($150) so I can save up for a trip to Las Vegas with my sister. It requires some budgeting on my part but in the end it will be completely worth it because I won’t have to pull any money from our joint account. I think it’s also a great compromise for couples who want some of their finances to be separate and others to be shared.

    • It’s a great system! Having to budget your fun money for future expenses is kind of tough, but you’re right, it will be so worth it to go to Vegas on “your own” dime. We went to Vegas for our honeymoon and loved it!!

      When we go shopping and make separate purchases with our fun money, we like to pretend like we’re total strangers who just decided to share a buggy or a bag. Haha. It’s the little things in life. :)

  3. Haircuts are fun money? !??? Everything else makes sense, but not the haircuts. If you have a job, you probably have to stay somewhat groomed, I’m thinking?

    • Haha! Yep, haircuts are paid for with fun money!
      My husband buzzes his own hair every month. I trim my bangs once a week, but I haven’t had a professional haircut in almost 10 months. I’m planning to get one on my birthday this summer. My co-workers haven’t complained about my grooming……yet :)

  4. This sounds like a great system! I love how it gives both partners a little autonomy and decreases looking over each other’s shoulder. Good job finding a nice balance for you two. Anyhow, I wanted to say “hi,” as I’m one of the visitors from GRS and am bookmarking your blog now :-)

    • Hey! Welcome to my blog! Thanks for reading! :) The fun money system has been great so far. The autonomy is great. I love that I don’t have to worry about or track what my husband does. It seems to help us both feel independent even though we are still sharing our income.

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