Simplify Your Budget with Fun Money Accounts

15 years ago when Mr. Montana and I first married, we struggled to figure out money. How do we pay off the debt? What do we spend money on? Do we give money away even though we are broke and in debt? And a big one, especially when we were in debt and the first few years after: How do we balance enjoying life now (aka buying fun stuff) and paying down debt or starting to invest? It was a big question that we struggled to answer. As in… we argued about it a LOT.

how to set up personal accounts in marriage

We just never seemed to be on the same page at the same time. I wanted to try to max out our Roth IRA’s when he wanted to buy skiis. I wanted to buy some new clothes when he was hoping to go out to lunch for a going away party. So in an effort to save our sanity and our budget, we set up “fun money” accounts.

How to set up a Fun Money Account

We added a separate checking account for each of us at the same bank as our joint account. Each month we auto draft from our joint checking into our own separate checking accounts. They have debit cards and everything.

We use our debit cards for personal purchases so those transactions are pulled straight from our individual Fun Money accounts. We each have 100% say on what we spend that money on. Right now we each get $75 a month. If we don’t spend it all, it just continues to build up. Or we can choose to spend it ALL that month.

I have $1650 in my account right now. Mr. Montana has $37. He is clearly more fun than I am.

Where it gets spent

When we first learned to budget, we had LOTS of categories. Too many, actually. We had separate categories for clothes, hobbies, books/magazines, eating out, small trips, house hold items, personal items ect.

Now anything that we want that 1. is really just for us and 2. not a true need, comes out of fun money. The list is crazy long of things that qualify.

  • Haircuts
  • Special face creams
  • Magazines
  • Movies (in person, rental or buying a dvd)
  • Music
  • All hobby supplies or gear
  • Clothes, shoes, seasonal gear
  • Fun personal trips like a concert or hot springs with a friend or Vegas
  • Household items the other doesn’t think we need, ie bigger TV, speakers, decor
  • Coffee shops, eating out (fast food or sit down), treats like pastry or beer

If it’s not a core agreed upon expense, it comes out of Fun Money.

Benefits of Fun Money

  1. It really simplifies the budget. We just track the monthly auto draft amount, and all the purchases from that account stay off the books.
  2. We can each spend money on what add the most value to us. When we want, without hashing out the details or convincing the other person. He doesn’t have to try to talk me into why we need new TV speakers. He just uses his Fun Money and I don’t care. One day I spent $400 on new shoes. For realz. That actually happened. My husband almost fell over from shock! But it was Fun Money, so it was no big deal. (7 years later, those 7 pair of shoes are still almost the only ones I wear.)
  3. It rolls over. All by itself. If we are too busy with other free fun stuff to spend our fun money, it just means there will be even more in the account next month. I never feel like I am missing out by not spending it all that month.
  4. We each get a fair share. I don’t generally want a lot. Mr. Montana finds more things that catch his eye. When we had multiple budget line items that we shared, I always felt like I was getting the short end of the stick. He ended up “using up” the budget line item before I saw something I wanted. And I often felt like I was trying to reign him in, so there would be a little piece of the pie left for me. Not a fun dynamic to have in a new marriage. =(
  5. We are rewarded for our individual frugality. If I find a great deal on something I want, I get to keep that savings. When I started cutting my own hair 6 years ago, I got to keep the $35 I use to spend a few times a year on hair cuts. Those savings don’t roll over into our bigger pot of money, they stay nice and safe in my personal account. Every place I become more frugal directly benefits me.
  6. We became more frugal (mindful and creative). Saving $5 doesn’t always feel big in a $3000-$4000 a month budget, but if the Fun Money account only has $37, then it really matters. We each become more thoughtful and creative with our Fun Money. Because it was a smaller scale, we were more mindful with the small amounts.

Pro Tips

  1. One person might need a “bonus” occasionally. That’s allowed. When Mr. Montana left the military and went to work in a civilian job, he had NO business casual clothes. We gave him a few hundred dollar Fun Money bonus to help him get started. Same when I was pregnant for maternity clothes.
  2. Decide what will be included, and what won’t be. We don’t include family trips or any related expenses from those like dinning out on the trip. Those are a core, essential expense to us. Alcohol consumed at home use to be personal money, but then we decided that was a hassle and now add it to grocery.
  3. Don’t nag or judge. If something doesn’t effect the family, it’s nice to have some freedom to spend wastefully. If one of us wants to blow all our money on coffee, so be it.
  4. Birthday or holiday gift money can be used to fill up the Fun Money account.Β The $50 I get for my birthday goes straight into my Fun Money checking account.
  5. Find the right amount. There is always a tension between our big goals, and immediate wants. Take some time to really talk about this and hash it out.
  6. You might lower the amount over time.Β For a lot of years ago ours was $125 a month, but the last 2 years we have switched to $75 each. We can often find we need less stuff as time goes by. We find low cost or free ways to have fun. We gain appreciation for small things, and feel less need to spend money to fill a gap. In this season of life, I don’t care if my friends and I meet up for $1 tacos, I’m just so happy all my mom friends made it out of the house without kids! That is a small miracle I am overwhelmingly thankful for. I don’t need an expensive cocktail, it’s a win if I am wearing a clean pair of pants without small child goo on them.

For Conversation

  1. Do you use personal accounts? Why? Why not?
  2. What kinds of things do you have that fall into those accounts?
  3. How do you decide on a “want” if both people aren’t on the same page?


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52 thoughts on “Simplify Your Budget with Fun Money Accounts

  1. Love this! I was going to write a post outlining this very thing on Friday, in fact.

    We are doing something very similar. Having that fun money seems to just make things easier. I’ll probably us most of mine to invest in P2P lending or something else just for the heck of it! That and whiskey and video games.

    • It does make it SO much easier! Whiskey and video games are perfect fun money additions. There is no way I would want to “budget” those into another category. =)

      Just the phrase “fun money” is the answer to so many spending conversions now. As in, Me: “I really love that wall hanging, it would look great in a our book room.” Him: “Fun money?” Me: “Of course.” Him: “Yeah, it looks great.”

      Or Him: “These classic door handle would be great in the classic. Aren’t they amazing?” Me: “Fun money?” Him: “Yeah, naturally.” Me: “Those are great door handles. Have fun.”

  2. I reserve the right to decide whether Mr. Montana is more fun than you. I doubt it.

    Fun money accounts is a great idea! Your 2nd tip can make or break the whole deal. You need to be in agreement about what constitutes fun and what is a necessity or just part of your regular budgeting.

    We don’t have fun money accounts although we’ve been keeping a vague mental accounting of Mr. G’s fun spending vs mine. He’s taken several trips with his buddies to sporting events that have added up. So technically I get to spend an equal amount but I haven’t found much I’ve wanted that’s been outside of our regular spending. That may change today if I decide to join Amazon Prime and get a new phone.

    • Just the benefit of the accounting is a huge reason to do it. I find our memory starts to get fuzzy after about 6 months. =) And he is totally more fun than me. Well, if fun it just counted in pure silliness and corny jokes. =)

    • YES! The no bad feelings or judgement is huge! Because we both spend our fun money on silly things. My mentoring trip to Vegas. He spend $450 getting an old (ugly) tattoo redone. Things I would feel really icky having to negotiate putting into our real budget, like a kid begging their parents for an extra scoop of ice cream.

  3. We have always had fun money accounts, but it used to be a line item in the spreadsheet b/c I hated the idea of too many accounts to keep track of and then…then I changed. And we each have a separate account with debit card and do this exact thing. Mind blown. I can actually have so much more fun now with my fun money!
    The other thing we do is any “extra” money that comes our way (such as when either of us gets a bonus at work) is we share the joy. He gets 10%, I get 10%, and 80% goes to long term plans. This makes us happy!

    • That’s a really cool idea about the “extra” money. We seem to come across extra money every so often and are never really sure what to do with it. Mr. Montana would be THRILLED to get a 10% bite of that. =) Like we sold our hot tub last year for $1500. Normally when we sell stuff (like kids clothes) we just recycle it towards the same purpose (new kids clothes) but we don’t need any big house stuff so weren’t really sure where to put that in the budget. Love that idea. =)

  4. I’m a big fan of a separate fun money account as it lets you splurge now and again without the guilt. We did this for summer spending. Our expenses in the summer always go up because we do more…there’s always more concerts, festivals, day-trips, etc. In the winter we tend to hibernate and spend less. To counteract the increased summer spending we started saving into a summer slush fund all winter.

    • It’s one of the reason I like to use actual checking accounts, it just stores up the money and tracks it. I have money in there from years ago. =) Like last year, I didn’t spend hardly any money due to having a baby. I was bf and it was hard to get out of the house with friends. Plus I didn’t want to buy any new clothes until I lost all the baby weight. So this year I’m flush with cash. =) All that to say, we not only seasonally save/spend but also each year is different. =) I’m sure once all our kids are in school, we will eat out for lunch like ALL the time. =)

  5. I suspect we need one of these. I always feel weird about the fact that I spend more on “fun” than Jon, between books, trips out for coffee with friends, etc. But Jon has big toys he rarely uses. If Jon was able to accumulate his fun money, then he’d probably feel freer to do things like replace the mast on his sailboat or fix up his old cars without really worrying, and I’d be able to buy fun stuff without worrying about equaling things out.

    • It’s great for bigger items! Mr. Montana tends to spend more on small stuff, coffee, lunch out, a new tee shirt ect. I like to save mine up. Then drop $900 on a trip to Vegas. =) Spending that money isn’t a stress, or conversation because it’s already come out of our budget for the last 2 years. =)

  6. I love this – especially the difference in account balances. I’d probably be on the higher side, but who knows – I’d probably count my trip to FinCon this year as being just for me and not a necessity πŸ™‚

    As we get through our nothing new year, I’m hoping to re-examine how we budget and I can see this being a really nice addition to what we’ve got. I bet this makes a huge impact on the number (and severity) of money arguments!

    • Yes! It basically took away 95% of our heated “conversations” about money. Now we just get to talk about the fun side of money, the planning, dreaming and scheming. Not if we “need” some new clothes or a dinner out. We feel much more freedom to spend money on silly or risky things. Like I plopped $125 down to do a diet bet to help me lose the baby weight. No need to run that by him or get him on board with the idea. It’s my money to gamble with. =) Finding the right amount per month takes some conversation. If it’s $25 each or $200. As long as it’s an amount that is OK to be wasted on fun.

  7. Yes! We have a fun fund to cover items, little trips or just the date night sans kiddo. It is so nice to be able to indulge in these small luxuries without taking a budget hit or wondering what else will need to give.

    • Yes, having it as part of the budget is so important. Enough for there to be some fun/luxury but not so much that is steals from other long term goals. Plus because it has already come out of our budget and family checking account, even if one of us drops a bunch of fun money cash, it has no impact on our other numbers. So there is no pain of a budget hit associated with this fun. Just pure fun. =)

  8. My husband and I keep a little “kick around cash” each paycheck. If he wants to grab drinks with his coworkers on payday, he can do it. If I want to meet a friend for brunch, I’ll do it. Most of our finances are combined, but it is still nice to have a little bit of your own money to spend however you’d like.

    • We keep everything but our fun money combined. I like the term kick around cash. =) It’s really nice when I want to spend money on someone else, for no good budget reason. If I buy a friend coffee, or a book or pay for a small trip, I don’t have to feel bad about spending “our” money on someone else. I feel a lot of freedom spending my money. =) For example, all the books I’m buy to give away for the Summer Reading Party are coming out of my fun money. =)

  9. Awesome idea! We’re very frugal at our house, but this idea could be helpful for us. I just spent $35 on a sleeping mat for a backpacking trip I’m taking this fall and felt guilty as all get-out for doing it. Having a “fun” account could probably help remove that layer of guilt for us. πŸ™‚

    — Jim

    • I love it that our fun purchases are separated from the guilt of “wasting” money or buying something fun. That money has already come out of the budget. So the “pain” of spending/budgeting it was already paid. Now you just get to enjoy it! It doesn’t have to be a lot, I know some folks who do $20 a month each. By setting up a checking account for it, you can automatically auto transfer and squirrel it away and let it grow till the right thing comes along. =)

  10. Love this. My SO and I just started doing something like this because I always felt like I was getting the short end of the stick, and she always felt like I was judging her. We are still ironing it out a little, but it has made it much easier for us to spend where we want without feeling judged.

    • Those dynamics are a real thing! We were totally there for a the first few years. The fun money accounts helped resolve 95% of that stress. =) Keep it up! It’s a great tool.

  11. Lovvvvveeee this. We did this a few months into our marriage and good grief it helped so much.

    We actually just track it in YNAB and don’t have physically separate accounts. But it works the same.

    As far as differences, we actually have a monthly line item for clothes, haircuts, and some face creams that we both agree are “necessary” they’re small amounts that also build up over time when one of us “needs” clothes.

    Other than that, we use ours almost identical to y’alls

    Oh, and we’re both going to get a raise from $45 to $60 in 2 months, because we’ve finally hit some major combined goals that we were working towards, and don’t need to save quite as much.

    We’re excited πŸ™‚

    • Congrats on the fun money raise! It’s a great way to celebrate making progress and hitting goals. Every once in a while, we would give ourselves a “bonus” if we hit a big goal. Fun money is like 10x more significant than real money, so it was a great reward. So if we hit a big benchmark, we would each get $50. =) It’s so important to celebrate those milestones and all the hard work that went into it. =) Went went out to dinner when we hit our first $100k. We did a weekend away trip for $500k. Now that I think about it, we should have done a $100 and $500 fun money bonus. That would have been perfect. Maybe we will do a $1000 bonus when we hit 1 million. =)

      • Oooo love that idea. We haven’t really done a bonus like that! But I like it.

        Think I’ll mention that to Hanna πŸ™‚

        Looking forward to hearing what you spend it on when you hit the big M!

        • If it’s to celebrate I prefer bonuses rather than a monthly increase. Even if it’s the amount the increase would have been for 12 months.

          The big M will have to be a heck of celebration. Mostly because that would have been a crazy, impossible dream when we got married! When you hit the crazy, impossible dreams, it’s time to go BIG. =) A cubic ton of confetti big.

  12. We have a slightly opposite but similar approach at the moment in that all of our income is separate until it ends up in a joint account. That means that everything except the household budget is personal, be it spending, savings, or investments. We’ve been doing a bunch of adjusting what is personal vs household spending this year. It’s really nice having a part of my spending only be accountable to me, just like it was before we got married. Well, mostly I like to not see my husband’s personal spending as he is much less frugal than me πŸ˜‰

    • Yeah, it’s important to take the time to hash out what comes out of what bucket. It’s much easier to talk about when it’s hypothetical instead of an actual item being considered that one person is already emotionally invested in. AKA While standing in TJ Max looking at a new large mirror for the bathroom because you never really liked the color on the old one. =) That’s a purely hypothetical conversation. πŸ˜‰

      • I hear you on the hypothetical versus actual – I wish we had known that one earlier πŸ™‚ Heh we had been buying my husband’s cheap shampoo out of the grocery budget and then when he decided he wanted fancier no fragrance shampoo and still bought it with grocery money, I went “Well if you get expensive shampoo out of household money, why don’t I?!?!” That conversation was way more emotional than it should have been πŸ˜‰ Or similarly, “My tax volunteer shift is from 11-3 and there is nowhere I can eat food at the library, so the best thing to do is eat food immediately beforehand = fast food and why is that coming out of my personal money when it really is a need at that point?”

        Most people we know with fun money count fast food in their fun money, so it took a bunch of talking to realize that that just wasn’t our thing and it should come out of the household budget. Hair cuts are still personal though because he spends wayyy more than I do.

        • Yup, yup and yup. =) But keep up the good work and having those conversations! Because while they aren’t super fun, it’s WAY better to put in the work and figure it out rather than be slightly pissed about a spending habit for 20 years. Long term bitterness is a poison to a happy marriage. Better to dig up it and sort it out early. =)

  13. We do this as well. My husband always seems to have more saved up than I do (I order from Sephora almost every month!). We have a set amount and since we $0.00 budget, at the end of the month, any leftover gets split between us as well. Last month we each got an extra $20! The only difference for us is that we still use our every day credit card but I transfer the payment from our fun money accounts instead of from our checking account.

    • Sometimes I’ll do that with larger purchases just for the credit card points. But not small stuff. πŸ™‚ OR if it’s a place I frequently go to, I might buy a gift card once with a points card and do a transfer instead of for every $3 drink.

  14. Way cool! I really like this idea and will be sharing your post. Way cool stuff.

    Keith “Shin” Schindler

  15. We do this too! Our Fun Money is just a separate Goal (like a sub-account) within our main checking account, but it works the exact same way. It prevents so many arguments and hard feelings because we don’t even ask what the other is spending from that part of our income.

    • I think not having to get permission/negotiate it is huge. Especially when we were trying to pay down debt and just get started. It was a more tense time anyway, so having that little bit of freedom was huge for us.

  16. We do the same and have for almost our entire marriage so far. We both knew other couples that had done that and it worked well, so when friction started coming up about little spends or overspends, here there and wherever, we implemented the “allowance/fun money” sort of system. It covers pretty much everything on your list, and mainly is described like your rules – Is it pretty much solely for one person, then it’s allowance. Usually Mrs. SSC has way more in her account than mine.

    It squashed that money friction though and even more it led to more openness about money, because no judgement if I want to buy another banjo, or video game or something she’d maybe question if it was from general funds, but with the allowance system. Whatever, no worries. I have had to get a loan before, so we keep it fairly flexible, but overall it has done wonders for us.

    • Ha, loans. =) Yes. I actually took pity on Mr. Montana a few months back and donated $100 to his account. =) And you’re right that there are a lot of things that would be weird to pull from the general fund, but whatever, as long as it comes from fun money.

  17. Love the idea of “Fun Money” accounts. In our family we call them “Sunny Day Funds,” you know, since everyone always advises saving for rainy day. We think you should save for sunny days, too!

    The hardest thing about these funds for us is funding them and then spending the money with no emotional strings attached, especially when we are working to pay off debt or save for a big goal. But the key is discipline to fund them and discipline to spend the money, guilt free.

    • It’s it super tough when you are working multiple goals (debt, saving) but I think that’s why it’s great to set up a monthly amount that fits into your overall plan and keep the money separate. Life is short and things change quickly, we can’t plan for all the fun to happen at the end. And I love the name Sunny Day Funds. =)

  18. My husband and I do the same thing! Although, not sure if this is CA but we each get $75/week. $75/month is really low in my opinion. a haircut alone can be $75. I swear by this allowance process. I also have over a thousand in the bank and hubby has -$75.

    • Yeah, I think each person/couple has to figure out the amount that works for them. It’s a balance of long term goals, current priority and fun stuff. I know some couples who do $20 a month, which would drive my husband crazy. So there is a happy balance. πŸ™‚

  19. My husband and I do this too! Except my fun money account is called the “travel fund,” because the only thing I spend money on (apart from my writing business, which I operate out of a separate account) is travel. And most of that money goes towards long-term goals, such as the trip to Africa we’re currently saving for and a longer 4-month Asia trip we’re hoping to do in the next couple years. But we can also go on weekend getaways with that money and not feel guilty about splurging.

    My husband’s fun money account is called his “stuff fund,” because he does a million crafts and is constantly accumulating “stuff.” It’s taken me a while to get to the point where I’m okay with contributing $150 a week to his “stuff fund” so he doesn’t get grumpy about not being able to spend money, but having the dedicated account for his stuff makes a huge difference.

    I’m a big-time saver (to the extent that I stress out about spending money on almost anything), so for a long time I was simply agonizing over everything he spent. This system has saved us both a lot of heartache!

    • We totally had a travel fund, for years! It was nice knowing that that money had been set aside and was just waiting. When we lived in Europe there was a good chunk of change that went towards travel each month!

      And I totally get not wanting to agonize over purchases! The fun money is kind of like ripping off a bandaid fast. Figure out the amount once, and no looking back! =) Plus for me, because I’m the natural saver, it gives me a reassuring permission to spend my money when I want with out guilt. I tend to spend a lot of mine on other people. Because that is an awful lot of fun for me. =)

      • Yes, the bandaid is a good analogy! And I know what you mean about being able to spend without guilt–I don’t actually have that at the moment, and it might be a good thing if I did. I borrow from my husband’s fun money account when I need spending money. But it happens very rarely, so he doesn’t get too upset πŸ™‚

  20. Ooh, what shoes are those that have lasted 7 years? Women’s shoes seem to be a combination of uncomfortable and poor quality! I’ve been trying to distinguish between shoes that are pricey because of name recognition, and those that are pricey due to the artisian time put in and quality materials, but it’s hard to do (particularly when I live in a small town and I would be buying online, even with a good return policy it seems sketchy)!

    • They are Josef Seibel. I bought them when I lived in Europe. Crazy comfortable and really well made. I bought so many pairs because they are such a great shoe and they were clearanced. You can find them some places in the US although I’m not sure it’s thier hand stitched line. Other brands I like are Keen, Dansko, Clark are pretty good. I think $100 or $150 for boots is the sweet spot, high quality but not so fancy of a brand that they actually become less comfortable. REI usually has a good selection of high quality brands. Although I do live in Montana, so REI is high fashion here!

  21. We did this for a while, and had to tweak it somewhat, as I typically had all 5 kids with me, and he was at work. If we decided to stop for an ice cream cone, our splurge cost a lot more than his. We agreed to increase mine due to that, and now it works much better. We both have an amount that we are comfortable with, and it feels more equal, even though the amounts are not!

    • We actually have a Fun Money account for our kids! It pays for all their treats, clothes, school stuff, or any fun stuff that is mostly for them. But I totally agree that sometimes the amounts have to be different to be more equal. =)

  22. This is so good I can’t stand it! I just told Mrs. Prairie FIRE and she thinks it is a great idea. So simple but very impactful. I appreciate small things like this that allows us to splurge a little on ourselves and not going overboard. I am a natural money hoarder, while my wife likes to live a little. This might benefit me the most, because I am not used to treating myself once in a while.

    • Simple but impactful is right! I’m also one who has an easier time just not spending. I still avoid most small purchases but it’s given me permission to allow myself to invest in a big way in things that matter. I do more retreats, trips with friends and take classes. All things I really love, but might have felt bad dropping $500 or $1000 on before. Despite the fact, I didn’t eat out or buy new clothes. =)