How Budgeting for Fun Money Changed My Life

When we first merged our finances (which was very early in our relationship) I noticed that I spent a lot less than hubby did.  At the time we had no concept of what we were spending or how to align our spending with our values.  But then we started budgeting for fun money and everything changed.

In the past, money was something that we earned and spent at will. Fun money was never a category in our budget. I had no problem saving up for larger ticket items, for example, vacations. Yet, in my opinion, hubby had an addiction to coffee.  He would stop all the time and pick up a coffee when he was out.  It wasn’t that he necessarily enjoyed the coffee, it was just something he did, a habit.

Eventually, we did include a fun money category in our budget and its effects on our relationship have been long-lasting.   This budget category truly changed my life.

Expense Tracking Workbook opt in graphic

What is Fun Money?

Fun money is a budget category that is often forgotten.  

Most people will include some form of entertainment or eating out.  But the fun money budget category encompasses anything that brings you the little (or big) joys in life.  This could be coffee, chewing gum, or a new book.

This budget category is best used in cash as it is easily controlled.  Because you are using it as cash, that is the only tracking that needs to be done.  The point of this budget category is to come up with fun things to spend money on, not to overly try to control or track it.

You can spend your fun money guilt free because it has already been accounted for somewhere in your budget or spending plan.

How Much Fun Money to Budget?

The first step in determining how much fun money to budget is to look at your expenses for the past few months.  You will want to get a handle on how much money you are currently spending in this category, and how much you can afford to spend.

When we looked at our budget, we decided to budget $200 each a month for fun money.  This was an amount that we were comfortable with.  Two-hundred dollars was enough money to have a little fun every month while not feeling deprived while we optimized everything else to hit our savings goals.  

Each of us would receive that money in cash and could do whatever we wanted to with it. There was no tracking of this money, no judgment and it could be spent without consulting the other person.

This no tracking, no judgment zone is important. Each person has their own fun money budget. The other person cannot tell them what to spend money on.

How We Spent Our Fun Money

I have often identified as a natural saver.  At the time it was very rare for me to burn through my $200 in a month.  I began to stockpile my fun money.

There was no thought given to what should I spend money on – all I wanted to do was save it.

Sure, it felt good to save, but that wasn’t the point of this money.  What I didn’t realize at the time was that I wasn’t doing anything for myself. I was valuing saving money over anything else.  My fun budget was not adding any fun to my life. It became something else for me to control.

On the other hand, hubby religiously spent his cash every month.  What he spent it on, I have no idea, that was the point of having cash fun money. What I do know is that he was finding fun ways to spend money.

Not only did he spend his money every month, he often wanted to spend more.  So I did what any enterprising person did and I loaned him some of my fun budget money.  And of course, I charged him interest.

This was a terrible idea.

How was he ever going to catch up?  Every month I hoped that he would “learn his lesson,” but most months he still ran out of cash before the end of the month.  I wasn’t acting like a partner, I was a dictator.

And had taken on the role of a payday loan provider, even though my interest rates were not nearly as high.

Now, not only was I controlling our budget and my fun money I had somehow found a way to control hubby’s fun budget too; which was exactly the opposite intent of the cash.

We continued with this system, which hubby called an allowance, for the 5 years it took us to pay off our mortgage.  And then the damn broke.

After the Mortgage Was Paid Off

Once our mortgage was paid off, hubby had goals of relaxing our spending and “living a little.”  I wanted to keep our routine and accelerate our timeline to financial independence.  If we had survived like this for the past 5 years, surely we could keep doing it.

But that was the keyword, we had survived.  

I was so obsessed with the bottom line and saving as much as we could that I didn’t realize that hubby had felt deprived and restricted during that time.  

That he had put on hold a lot of things that he wanted to do. He was fine with it while we were working towards our goal.  But now that we had achieved that goal of paying off our mortgage, he wanted to re-evaluate our budget.

He had never told me this which lead to many, many discussions once the mortgage was paid off. I really should have realized it though, while I called it fun money, hubby called it an allowance.  

The connotations of the two are very different. For us, one was about freedom, the other, control.

Relationship Issues

We were caught in an endless cycle: I would try to restrict how much hubby would spend, hubby would spend more than I wanted him to, I would get frustrated and angry.  And this happened over and over again.

I remember being so frustrated that hubby was not doing exactly what I wanted. Surely he could compromise and comply, I mean I had relaxed a bit and we each had $200 a month in fun money.

Never did I think of things from his perspective.

What I didn’t realize is that my need to restrict spending was about control and trust.  I had this deep-rooted need to control money.  I felt that if I controlled my money then nobody could take it away from me.  Unfortunately, even though we had joint finances at the time I was still thinking of it as my money, not our money.

I also didn’t trust my husband.  I didn’t trust that we had the same goals and that he could be in control of his own spending.

Reflecting back, this was a low point in our relationship.

The Fun Money Experiment

After many disagreements and tears, I decided to let hubby have his way for a change.  For a few months, we stopped restricting fun money.  We were both free to spend however we saw fit.

Our fun money budget was no longer constrained to cash, we could use our credit cards as long as we paid them off in full every month.  This was in order to try and accumulate travel points which you cannot do with cash.

With this new free-spending I, of course, didn’t spend my money any differently.

The funny thing was, hubby, didn’t go that crazy either.  When I went over all the expenses I noticed that he only spent money on things that he valued. Yes, the things he valued cost money.  But he wasn’t wasting money.  

Over time, this little experiment taught me that maybe we could still reach our financial goals and have fun along the way.  I started to realize that maybe I was depriving myself.  

I had never given any thought to what to spend money on, just that money was meant to be saved (and obviously not enjoyed).

Hubby gave me the opportunity and permission to think about what I wanted to spend money on.  At times he even forced me to think about myself and spend on myself guilt-free. Now don’t get me wrong, I still didn’t go crazy.  But I enrolled in some courses that I had wanted to take and it felt great.

This was a huge turning point. We were no longer sprinting towards financial independence.  Our goal shifted to adopting a financial freedom mindset and enjoying the journey. 

Fun money and how it changed my life. If you don't have fun money as a category in your budget then you need to read this.  Learn how fun money can change your life. #funmoney #handfulothoughts #lifechanging #budget

Final Thoughts

Who would have thought that a few hundred dollars of a fun money budget every month could have such a huge impact on my life?

Through our evolution with our money, I learned to trust my husband.  He has never given me a reason to not trust him, but I always felt like I had to exert control over him and his money decisions.

Now reflecting back on our fun money experience years later I can see that it was about control and trust.  I have since learned to let go and our relationship is stronger than it has ever been.  

What is one thing you spend your fun money on?

16 thoughts on “How Budgeting for Fun Money Changed My Life”

  1. Wow, you and I are so similar, Maria! And your hubby is like mine! He’s not necessarily spendy, but he spends more than I do. However, left to his own devices, mine, like yours , spends quite practically and according to his values.

    I can also be a little bit militant about our spending, and it can create some hard feelings! That’s when I know it’s time to talk about things—as you have with your hubby. It has also been a journey for us, and one that we continue to tweak. But on the whole, we’ve also come to a place where, like you, I’ve stopped ‘policing’ so much and he’s felt less deprived.

    Finding that balance between two different spending styles can be hard, but you each make the other more balanced when you work on finding a healthy middle ground!

    1. Wow, Chrissy, it sounds like we are very similar.

      At the beginning of our relationship, I thought that everyone else was just like us. Then as I learned more about personal finance I realized how different everyone’s finances are. Communication really is the key. As long as you keep the communication channels open then dealing with fun money or any other part of your budget becomes much easier.

      I will have to tell my husband that he isn’t the only one who feel deprived by his wife;)

  2. My husband and me also have very different approaches to money and how to spend or save it or what to do with it.
    I also like to save, I am frugal and I like controll, just like you state in your articel.
    To me it has been extremely important (and still is) to be independent and free.
    So with this background the best solution for me was always to keep finances strictly separated. This makes it very easy to let him handle it his way, which is so different than my way. No conflicts about money ever, it´s just perfect. He even owns his flat just by himself, I own my flat just by myself. We do not even have a shared account. Groceries and such are bought by both of us and we feel we contribute roughly the same amount, so it feels fair and we do not track exactly who spend how much on commonly used stuff, because it just feels right the way it is. Vacations however we do keep track and split all expenses at the end.
    Each couple is different, but for us this is the ideal way.
    And without any preaching or fighting, hubby came a long way to reflect on his spending habbits and got way more frugal himself, too. He is even upset at how foolish he wasted so much money before he observed me. I am happy for him and I am happy we found our way to handle finances entirely conflict free in our marriage.

    1. Coco, it sounds like you and your hubby have found a great system that works for the two of you. At the end of the day, that’s all the matters, not whether you call it an allowance or fun money haha.

      It’s also amazing how behaviour evolves over time. My hubby is like yours in that years ago he would have spent much more freely but now is more conscious of his spending. Now that being said, I’m not stressing over saving every penny anymore either. We have both somewhat shifted to the other person’s side and we are in a happy medium.

  3. This is how I was about money when I got married too! I was very controlling because I needed that control to feel secure. Luckily, I spent a ton of time thinking about and blogging about money and thinking about the ideal relationship we’d have with it in our marriage as we were dating so we talked a LOT about it. By the time we married, we still weren’t on the same page but we were traveling in parallel paths because we both wanted to understand the other person and figure out how to take a step closer to middle ground. I had already fought this same fight with members of my nuclear family and learned the hard way that if I insisted only on my way, it would all go to pieces. I never thought about those fights as a good thing but now I’m glad I had them with family that didn’t respect me so I learned to do better with family that did.

    Thanks for sharing, I’m not sure I ever would have thought about my past experiences in that light!

    1. Thank you for sharing Revanche. Although it wasn’t easy opening up about this, or even coming to this realization (it took me years), I’m learning that many other people have been in similar situations in the past. It’s nice to know that I was not alone in my need to control our fun money. Thankfully I’m now on the other side of that control (as it sounds you are too) and my relationship with my husband is that much stronger now.

  4. This is an awesome post Maria! Loved reading it – I related to so much of the content.

    During my first marriage, this was a critical problem for me. I was thrifty, packed me lunches, rarely spent on stuff, meanwhile my ex could blow $50 a day with breakfast at work, two coffee’s, lunch etc. It drove me bonkers. It was also a great lesson on the important of having “fun money”.

    There were a lot of other problems, so it was destined for failure, BUT, I did take that lesson with me moving forward! When Mike and I joined financed (which was also really early) we instituted an individual monthly “allowance” (also of $200, although we upped it to $300 post-retirement lol).

    It allowed both of us to have that “fun money” without having to be accountable to someone else on how we spent it. I agree that it was so incredibly freeing, and alleviated SO many potential area’s for argument.

    As it turns out, in comparison to Mike, I am now the “spendy” one, and he stock piles more than I do! Honestly, I believe this approach to finances is the perfect blend of joining finances while retaining just the right amount of independence and autonomy, and would be helpful for SO, SO many relationships.

    Wonderful post!

    1. Thanks for the kind words Phia. I agree with you, if a couple is looking to combine finances then having some individual fun money is key. It really does take a lot of the stress off. Well, it did for me after I worked through some of my own personal issues around money. Without having a fun money budget category I think we would have had many more money fights.

      1. Hi Maria – your writing includes great content combined with personal experiences which makes it so relatable and down to earth – thank you for sharing.
        As we married a bit later in life we have always kept our finances seperate (we had established careers when we met). My husband is more of a spender and does not worry about money, while I have always seen things through the lens of “scarcity” due to childhood influences, and thus had great anxiety that there was “not enough”. It took me a long time to unravel my complicated relationship to money. Brent Kessel’s Its Not About the Money was an eye opener for me, as was Your Money or Your Life. Navigating your own money mindset is difficult enough…with a partner, even moreso at times! I think the only way to move forward financially is by understanding what has influenced the beliefs and habits of each other. It is so crucial in a partnership, as it is in any business. As to our fun money budget? Definitely travel – we travel cheaply so blow the budget on supporting good, local restaurants. We’re saving a bit of money this year…fun money is now sadly spent on kn95 masks ?

        1. Thank you for the kind words Karen. There is no right or wrong way to deal with finances as a couple. The biggest thing is making sure that there is open communication and that both you and your partner are on the same page. Sounds like you have found a system that works for both of you.

          And you are right, money mindsets play a huge role. Things always get more complicated when there is more than one mindset involved.

          Sounds like our fun money spending is very similar.

  5. Thanks for being so candid about your experience. I have been controlling about money too, and it wasn’t even my money (haha!!) I dated a guy who said he valued money and freedom etc (yada yada yada) but he would spend like $1000 a month on his car and he was in HELOC debt and said he would pay off his HELOC debt. I would ask him each month if he paid off his HELOC debt (it was only like $2K) and he hadn’t… and there was always something new with his car he needed to pay off. So I realized his actions spoke louder than his words and I didn’t like myself being a nag.

    My husband and I have similar values so I don’t feel the need to control his spending at all- we are opposite we have a joint pot of money and the majority is our own money to spend as we please (which is not really much spending).

    1. GYM – actions really do speak louder than words. In my case, I said that I trusted my husband yet all I wanted to do was control all the money – which did not show trust. Coming up with the fun money system in our budget really helped. Now years later we are in a much better place and my actions reflect my words, and our spending aligns with our values.

  6. This was a great post. My significant other and I have not combined finances yet, so reading this was like a little “case study” for us. Everyone is different, of course, but this was a great look inside how you both, as a couple, handled your money. Thank you for sharing!

    One thing that I took away was that since it is truly a lifelong journey, things can change, and there is no harm reevaluating your circumstances and then altering your plan slightly. I will be keeping that in mind as we get closer to combining finances!

    1. Thanks for stopping by Nick. You’re absolutely right, things can always change and it’s important to adapt to the siutation. I don’t know how many times our plans and money actions have changed over the years.

      We have always combined finances but our goals are always adapting. There are so many ways to deal with your money as a couple, the important thing is to find what works for you and to communicate. That’s why fun money works so well for us.

  7. Hi Maria,
    Thank you for sharing your story. Communication is key!
    I have a relatable story, except I’m the spendy one who is trying to cut back and my wife doesn’t spend anything on herself! However, she does buy lots for the rest of the family which she budgets but doesn’t worry much about cutting back.
    When I started down the FI rabbit-hold, I was talking to her about all the ways I wanted to cut spending. I realized, after a long while. that she already felt deprived. That she already felt guilty about buying things for herself and now I was trying to take away fancy diners and cutting our cable. She was miserable whenever I brought it up.
    I’ve since eased off and and realized I should just work on my own things and support her to spend on herself every once in awhile. I try to treat her too. It took awhile but are able to talk about our finances again with the focus on value and intent instead of cutting.

    1. Sterling – I can totally relate to going down the FI rabbit hole and wanting to cut out everything. I do think that it is a good experiment though because you really determine what is important to you and what isn’t. When working with a partnership it is always important to make sure that both people are on the same page – or at least reading the same book – haha.

      Budgeting for fun money was that little action we needed so that hubby and I could both stay sane with our spending plan. I’m happy to hear that you and your wife have found what works for you too.

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