Fun Money

My first run-in with the concept was while reading the "Smart Cookies' Guide to Making More Dough." They suggested including "Fun Money" in your budget to provide flexibility with your money. The idea is to allocate a certain amount of money for the week to be used at your discretion for whatever you want. I have already implemented this into my spending plan and so far I absolutely love it!

In my opinion, you get the best of both worlds: you get to stick to your budget and monetary goals while still being able to "splurge" or indulge in a want without getting your finances off track. The idea is to only use the cash that you pull from the ATM once a week that you place in an envelope or your wallet. Once that money is gone, you are not allowed to get any more until the following week. If there is money left over from the week, you can choose to roll it over and add to your next week's Fun Money. Some people even save up their Fun Money to save up for major purchases that they don't want to include into their spending plan.

For the spending plan to work for me, this concept is imperative! I'm used to being able to spend money without much accountability (not good!) and to go from that to not spending any money at all is going to cause me to fall off the bandwagon once again. Using this method I get to still spend money on the things I want while still being a responsible financial adult!

What are your thoughts on Fun Money? Do you or would you include this into your budget or spending plan? If you do already incorporate this, what do you use this money for?