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Why You Need a Slush Fund? Four Rules to Spend Fun Money

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For many people, budgeting can be really tedious, and feel like it traps their freedom and spirit. While there are plenty of advantages of budgeting, it is nice to have one area of free-spending with money.

That is where a slush fund comes in.

A place to spend money with freedom and not worry about ruining your budget and the inability of not being able to reach your money goals.

When you work hard for your money, it is hard to be disciplined with your money every single step of the way.

You want to reward yourself and treat yourself! Specifically with no questions asked.

That is where the slush fund comes into play.

If you want fun spending and freedom in your budget, then learn how to create a slush fund account. This is a perfect compliment to help reach money goals.

What is a Slush Fund?

The definition of slush money or pocket money is simple – money set aside to spend as you see fit.

A reserve of money set aside for an unknown and undetermined purpose.

Everyone will have their own meaning for their personal slush fund. That is because we all have ways we want to spend our little reserve of fun money.

And this one thing can save a marriage and many, many arguments!

Slush Fund Examples

Picture of cash showing slush fund examples

Each person will have their own purposes for spending their fun money. Here are some slush fund examples:

  • Spa Treatments
  • Car Accessories
  • Lunch Dates
  • Helping others
  • Music or cable subscription
  • Golf outings
  • Happy hour fun
  • Crafting

Honestly, the best slush fund example is something both people do not want to include in their budget. It could be something they do not agree with, or the cost, or the need.

Did you know all of the names for the slush fund?!?! Call it what you want… the purpose is still the same:

  • Pocket Money
  • Spending Cash
  • Pocket Change
  • Allowance
  • Petty Cash
  • Kitty Fund
  • Chump change

Just pick your favorite name for it and understand it is money set aside to spend how you choose.

Regardless of what you call slush fund money, one meaning holds true.

It is a small amount of money earmarked for one person to spend as they choose.

How to Create a Slush Fund?

Picture of how to create a slush fund account for the first time.

These are the four rules of slush fund money. It is not hard or difficult to create a slush fund.

You just need to decide in advance how a few line items we will cover shortly.

Nothing complicated. Pretty simple. You just need to follow them.

1. Agree on amount Given to Slush Fund

Every month or week a predetermined amount is given out for each person’s slush money. Remember, the slush fund meaning is their reserve of cash to spend or save as they deem fit.

In the Money Bliss Cents Plan, there are 3 lines dedicated to Slush Fund Money – His, Hers, and Kids.

Slush fund money is just as important for adults – probably more important than any age group.

Everyone in the household can have a little chump change to spend as they see fit. So many times, we hear of using pocket money for kids. However, very few people use it as adults.

2. Fun Spending Your Way – No Questions Asked

The biggest ground rule is no questions can be asked about how or why you spent your slush fund money in this or that way. Period.

Don’t test the boundaries. Respect the rule of no questions asked.

It is hard for a couple not to argue on every single line when they make a budget. So, agree on a slush fund amount and stop pestering the other party on how they spend their money.

3. Cash Only (Or Seperate Cashless Account)

Spending must be in cash. And cash only. At the very minimum, that chump change account is only used for your fun spending.

The temptation to overspend is way too great especially when it is spent on ourselves. Staying away from credit cards is necessary. Especially because it helps with #2 rule of no questions asked.

Here are great options to help you succeed:

4. No Judging

Human nature is quick to judge. Someone spent their money in a way you don’t agree with and you want to speak up to say something.

Not up to you to judge.

Slush money is meant for whatever you want to spend money on. This is not the time or place to be judging how to spend under $20-100 per month.

Plus – Don’t Be an Idiot

This isn’t the time or place to be sneaking behind your significant other’s back. If you are unable to honestly say how you spent the money, then you are on a slippery slope.

Honest and open communication is the key to success.

This isn’t an opportunity to start hiding your actions.

Bonus Tip for Kids –

***A side note on the Kid’s Slush Fund Money…this is how we introduce paying commissions to our kids for jobs done around the house.

That in itself is another post for another day. But, the same rule holds true, we can’t judge how they use their “spend” money.

Advantages of Slush Fund Money

Picture of someone counting their slush money, pocket money, or chump change.

There are many benefits of using a slush account when you are budgeting money. This is especially true at the beginning of your proper money management and budget journey.

You need freedom in your life if not you will be so constricted that you will not meet the smart financial goals you planned for yourself.

1. Agreed Upon Amount

First of all, the amount of money designated to each person’s slush fund money is set at the beginning of the month (or week). Everyone agreed to the budget, so no changing money in the funds.

Sit down and discuss what amount is doable based on your situation. This is based on your budget.

The key is to stick to the agreed amount of money. Use cash to stick to the agreed-upon amount.

2. No Arguments

Remember, no questions can be asked!

No judgments can be made!

A very simple way to steer clear of arguing. One person spends their money before the first week of the month is up – more power to them! Another person saves their slush fund money for a bigger purchase – high five!

There are bigger things to discuss in the journey to financial freedom than how someone spends their slush money.

Pick your battles.

Money is one of the leading causes of divorce. Save your marriage and use a slush fund account. That right there is one of the huge advantages of pocket money.

Related Post: How to Talk about Money with your Spouse

3. Breath of Fresh Air / Freedom

Many people find living in a budget or Cents Plan very constricting and overbearing.

This is why slush fund money is SO very important. It provides a breath of fresh air. A moment to spend money and not worry about the money spent.

Freedom to savor life’s little moments. Enjoy!

Especially if you are struggling to make ends meet, this is a big advantage of pocket money.

4. No Guilt

The last advantage of slush money is not carrying guilt. Regardless of how an adult decides to spend their pocket money, there is no guilty feeling about buying x, y, or z.

Remember rule #3 – no judging, you are free to purchase whatever your heart desires and not be overwhelmed by guilt.

Disadvantage of Slush Fund Money

After listing out all of the advantages of pocket money, you may be thinking there have to be disadvantages, right?

Honestly, the only disadvantage is it is one more category to track and separate out money.

However, that is menial given the advantages of slush money.

Related Post: Complete Guide to Sinking Funds; Why They are So Important?

Ready for Your Slush Account?

Picture of someone writing down the meaning of their slush fund

This is a key point to remember…

Regardless of where you are on your journey to Financial Freedom, slush fund money is utterly important.

The key to money is to build a strong foundation. That includes how you spend money, how you save money, and how you discuss money.

Even if you start at $5 or $10, you will begin to reap the benefits and advantages of pocket money. The small amount of money will change your perspective and how you relate to money.

As you get further in your journey, you can increase your slush amount to $100+ of fun money!

Just remember the rules of slush fund money in order to see the advantages in your household!

Further reading:

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This section may contain affiliate links, which helps us to continue providing relevant content and we receive a small commission at no cost to you. Please read the full disclosure below. Empower Personal Wealth, LLC (“EPW”) compensates Money Bliss  for new leads. Money Bliss  is not an investment client of Personal Capital Advisors Corporation or Empower Advisory Group, LLC.
If you want fun spending and freedom in your budget, then learn how to create a slush fund account. This is a perfect compliment to help reach money goals.

Know someone else that needs this, too? Then, please share!!

Did the post resonate with you?

More importantly, did I answer the questions you have about this topic? Let me know in the comments if I can help in some other way!

Your comments are not just welcomed; they’re an integral part of our community. Let’s continue the conversation and explore how these ideas align with your journey towards Money Bliss.


  1. This is a really great idea. It would be so nice to plan in some wiggle room. It seems like we do great with our budget until it just gets too restrictive. Then I overdo it and wind up kicking myself. This would be such a helpful bit of breathing room for all of us! Thanks for the great tips!

    1. Yes, slush money provides that freedom you need with a budget! It is lovely to have a little bit of cash for this and that. No questions asked on spending!

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