Perhaps you launched into 2020 with a fastidiously prepared, immaculate new budget to set you up for financial success. You figured out a few ways to save on your monthly bills, or maybe how to stash away a little extra cash for a rainy day.
So, uh, what did you budget for fun stuff? You know, the stuff that doesn’t really belong in any reasonable budgeting category, but that winds up in your shopping cart anyway?
If you’re not planning for the slightest bit of frivolity, you could be setting your budget up to fail.
It’s the common bond that trips up so many budgets: you make it so restrictive that any deviation from the plan feels like a failure. That’s why you have to build in a bit of a slush fund. For what? Honestly, it doesn’t matter.
Here’s how Anna Marquardt put it in a recent tweet explaining that she set a monthly cap of $US200 ($288) for whatever the heck she wants.
In 2020 I am going to actually set a monthly budget of $200 for Online Nonsense. This thread will serve as my record of both things I did buy, and things I wanted to buy, but didn't.
— lady in red (@ajlobster) January 3, 2020
In her thread, she defines “Online Nonsense” as “clothes, accessories, superfluous beauty products, and really anything I don’t actually need.” She provides the example of buying new moisturiser, which she probably uses daily, versus buying a new eyeshadow, which would not be quite as useful. Only the latter would count as nonsense.
If you think $280 is too much for a “random fun” budget line, rest assured that you can choose whatever amount works for your budget. Maybe money is tight, but you can find $15 or $30 in your budget for something that makes you happy.
And this rule also doesn’t mean that you have carte blanche to spend on a whim as long as you stick to the amount that works for you. That’s not the case at all. You should still take time to consider every purchase before you make it, especially those online add-ons that can tally up quickly in your cart.
What the slush fund really does is take away the guilt of a strict budget and give you some freedom. At its best, it helps you solidify where your budgeting priorities are. And at the very least, it keeps you in check from going overboard and wondering later where you went wrong.