This post may contains affiliate links, which means I receive a small commission at no cost to you. Please read the full disclosure here.One of the categories in the Cents Plan is called Slush Fund. There are many names for Slush Fund – Pocket Money, Spending Cash, Pocket Change, Allowance (I’m totally against that one), petty cash, or cump change. Just pick your favorite name for it and let's understand the rules and advantages.
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.
The definition of slush money or pocket money is simple – money set aside to spend as you see fit.
In the Cents Plan, there are 3 lines dedicated to Slush Fund Money – His, Hers, and Kids. Everyone in the household can have a little cump 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. Slush fund money is just as important for adults – probably more important than any age group.
Four Rules of Slush Fund Money
1. No Questions Asked
First of all, 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.
2. Cash Only
Spending must be in cash. And cash only. The temptation to overspend it way too great especially when it is spent on ourselves. Use cash period.
3. No Judging
Human nature is quick to judge. Someone spend their money in a way you don’t agree. Not up to you to judge.
4. 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.
***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.
Four Advantages of Slush Fund Money
1. Agreed Upon Amount
First of all, the amount of money designed to each person’s slush fund money is set at the beginning of the month. Everyone agreed to the Cents Plan, so no changing money in the funds.
2. No Arguments
Remember, no questions can be asked! No judgements can be made! 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!
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!
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.
After listing out all of the advantages of slush fund money, you may be thinking there has 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.
Regardless of the Money Bliss Step to Financial Freedom, slush fund money is utterly important. Even if you start at $5 or $10, you will begin to reap the benefits and advantages of pocket money. Just remember the rules of slush fund money in order to see the advantages in your household!
Understand: Cents Plan Formula
Join the Community!
Learn how to budget, save money, get out of debt while living life to the fullest.
Enter your email address to get our Money Tips straight to your inbox. Plus lots of info to help your money situation!