Each payday, my husband and I make all of our transfers to our different checking, savings, and investment accounts, and only leave ourselves a little bit of “kick around cash” for fun money. This money is supposed to last us the two weeks until our next paycheck, and it can be spent on whatever we like, no questions asked. So how much fun money is enough?
The Importance of Kick Around Cash
When you are aggressively saving towards something or paying down debt, it’s easy to get burnt out on budgeting. Sometimes you just want to go out for a drink or go to the movies, and not have to worry about how that is going to impact your savings for the month.
This is where kick around cash comes in. It’s a little extra money that you haven’t assigned a job to, that you can spend on anything you’d like.
What We Don’t Budget For
Right now, we pay for rent, bills, and groceries from our joint checking account. We each have personal escrow accounts to pay for my car payment, car insurance, maintenance, life insurance, and a few other recurring expenses. We have savings accounts for our house downpayment, vacation, gifts, and an emergency fund.
It seems like we have everything covered, right?
After continually dipping into our vacation fund to pay for drinks or dinners out, we have put a stop to that to be able to beef up the account for a bigger trip next summer. Right now, if we want to buy a bottle of wine or go out to eat, one of us pays for it with our kick around cash.
We do not budget for clothes, so we pay for those with our kick around cash.
Larger vacations aside, any entertainment (such as going to the movies or a concert) is also paid for with our kick around cash.
We also pay for our hobbies (running races, snowboarding, biking, etc.) with our kick around cash.
The Amount of Kick Around Cash We Keep
Each paycheck, I keep about $60 (it’s really $59 and some change, but let’s round up) and Mr. Farmhouse Finance keeps about the same. We get paid twice a month, so that’s $240 or $120 each in a typical month.
$120 seems like a lot of money, but when you think about all the different things that money pays for, it goes really fast.
If we go out to a nice dinner, $100 is gone. When we buy a few bottles of wine, $40 is gone. If I buy a new pair of sneakers, POOF I’ve used up my kick around cash for the month.
Sometimes I buy something, and need the next paycheck’s kick around cash to pay for it (don’t worry, my credit card gets paid off every month).
And so the cycle never ends.
Is More Kick Around Cash the Answer?
It never seems like we have enough money for everything we want to do, so is leaving ourselves more kick around cash the answer?
If we leave ourselves more fun money, we will have less money to put towards one of our other goals.
Should we save less for vacation?
No, then we won’t be able to go on a trip next summer.
Should we save less for our house?
No, it’s already much more expensive than we had originally planned for, so we need as much money as we can save for the downpayment and closing costs.
Should we save less for our emergency fund?
No, we haven’t saved up six months of expenses yet.
Tough decisions have to be made when you’re saving for goals, so it might just come down to prioritizing spending our fun money on the things that we really want to do, and not doing everything.
Our Hobbies Are Expensive
Running is free, but registering for races can get pricey. Lift tickets are expensive. Concert tickets can really add up. The things we like to do for fun are not cheap. If I spend all my kick around cash on clothes and other things, I’ll never have any money for the things that I really enjoy doing.
I’ve decided to make my hobbies a priority, and created another savings account dedicated to them. The money that I put into this account still comes out of my kick around cash, so it might only be $40 here or $20 there, but at least it’s not all getting spent mindlessly.
I want to attend a snowboarding clinic this winter, and booked an Airbnb near the mountain. I used money from my hobbies account to pay for that.
I’m eyeing a spring marathon, so I’ll use money from my hobbies account to register for that race, as well.
It doesn’t seem like a lot of money, but every little bit helps when it comes to saving. If I want to make my hobbies a priority, I have to set aside money for them, or I will never have enough money for the things I love to do.
So How Much Fun Money is Enough?
When you’re only leaving yourself a small bit per paycheck, the money runs out really fast, and decisions have to be made about what you can and can’t do. Sometimes we look at all the things that our friends do, and we feel a little deprived. That’s when we remind ourselves that they are not saving as much as we are, and are probably spending every cent of their paychecks.
As we start to earn more money, we’d like to increase the amount of kick around cash we leave ourselves with each paycheck. We don’t want to only be saving for the future, and not enjoying the present.
It’s hard to find a balance between saving for goals and enjoying your life, but I feel like I’ve almost found the sweet spot. A little bit more fun money would make it even better, but I have to be careful because no matter how much money I leave myself, it will get spent, and I don’t want to sacrifice our longterm goals.
How much kick around cash or fun money do you leave yourself each month?
Illusion of Scarcity Worksheet (PDF)
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- Budget for financial obligations and recurring expenses
- Prioritize your financial goals
- Make all your transfers on payday