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What is a slush fund?
Wikipedia defines a slush fund as "a colloquial term which has come to mean an auxiliary monetary account or reserve fund."

For me, my slush fund is kind of like an emergency savings account but for the fun stuff. Some people set aside
separate savings account for vacations, cars or other occasional expenses. I am a big technology geek and buying the latest electronic gadget was one of the ways I wound up with a mountain of credit card debt.

These days, I still buy the occasional electronic gadget on a whim. Although, now the guilt is not there because I've already set aside money to cover the purchase. I just pull the cash from my slush fund.

Each month, I set aside $100 a month for the slush fund. A couple of weeks ago, I had the opportunity to take a last minute trip to the beach. The lodging was free and I only had to pay for food and drinks. I spent about $200 and I didn't have to pull the money from my regular budget and I didn't have to touch my emergency fund or regular savings. It was also nice to not have to worry about whether or not I could afford it. As long as I have money in the slush fund to cover the purchase, I can afford it. After all, that's what it's there for.

Do you have a slush fund? How much do you keep in the account?

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  1. Chris // June 1, 2009 at 10:42 AM  

    I keep a slush fund, but mine is for any opportunities that only come up once in a while. This could be stock opportunities, business opportunities, or maybe someone is getting rid of something real cheap. Either way keeping 10K to the side to jump on rare opportunities is the way to go.

  2. Bank Gal // June 1, 2009 at 10:52 AM  

    I have not been keeping a slush fund as of late because I'm concentrating on paying down my debt. I keep very minimal in my emergency fund as well because I'm not in danger of losing my job, my car is pretty much brand new, etc.

    I'm curious as to how many accounts you have set up, what their purposes are, and the balances you typically keep. It seems a lot of PF bloggers have multiple accounts to keep organized. I do the same (checking account, emergency savings, Christmas savings, Vegas account for a trip to Vegas I'm taking next summer). I'd really like it if you could give your readers a breakdown of the different types of accounts you have set up. =)

  3. Amy // June 2, 2009 at 1:00 AM  

    I have a slush fund for all things that can't be categorized as monthly "fun money." This covers gifts, medical expenses, travel, insurance premiums, automobile maintenance, clothing and hair, etc. It's all actually in one account at the credit union, but I use a spreadsheet to tell me how much for each category. In the event that a sudden expense comes up--such as new tires for my car--then I just use that money and juggle things around on the spreadsheet. I put approximately $300 in there every month.

  4. Amy // June 2, 2009 at 8:55 AM  

    I have a little over $1,000 in my slush fund; my husband has about $900 in his. We get spending money of $70 a week and most of it goes into our respective slush funds. He uses his to help his daughters out and I use mine, well, mostly I hoard mine but I also get massages, buy DVDs that I want, etc.

  5. Matt @ My Financial Recovery // June 2, 2009 at 11:16 AM  

    I plan on having a slush fund at some point but right now I am paying down debt and working on emergency savings.
    Once I have a decent sized emergency savings in place and debt paid down I will build up a slush fund for pretty much the exact reason you have one!

  6. Anonymous // June 2, 2009 at 8:00 PM  

    I have a slush fund that I call my Attitude Adjustment fund--basically its a different way of saying retail therapy:) I put about $100 in each month. This money is used for large and small fun purchases.
    I keep it in my ING account. Within that main ING account is my Emergency fund, my KUE (known upcoming expenses, ie: car repairs, membership dues, etc)and bills. I keep a spreadsheet of the account with running totals of all the different sub accounts.

  7. sen and qi // June 2, 2009 at 8:42 PM  

    I had one but it all went when Hubby was jobless for 9 months. I am now starting it up again. But see? It came in useful. Now he has a job I can start saving and putting aside again. I would prefer though to have a slush fund that can earn me some roi though as keeping it just to one side without offsetting it against inflation isn't a good idea for the long term.troaryso

  8. tom // June 2, 2009 at 9:17 PM  

    I have a slush fund but it is always completely empty :) I need to re-evaluate it.

    Bank Gal asked about the number of accounts (well she didn't ask me, but I will share anyway!). We have savings accounts at ING Direct and Emigrant direct. At ING we have two separate accounts. But while we are concentrating on paying off debt, we tend to only use the two ING sub-accounts, one for emergency fund and one for debt payoff savings (for when we need to accumulate money to pay off a debt).


  9. SingleGuyMoney // June 3, 2009 at 5:35 PM  

    @Bank Gal: Currently, I have my main checking account, a regular savings account, an E-Fund and a slush fund.

  10. J. Money // June 6, 2009 at 12:28 PM  

    Yup! although i don't have it separate or anything, i just have it budgeted into my monthly numbers. and if i never use it (which is very likely) it just rolls over into my savings account. might not be the best to track for some people, but it works nicely for me :)

  11. Funny about Money // June 11, 2009 at 10:38 PM  

    Sure! I put $200 a month into savings, for clothing purchases and surprise expenses. Right now it's doubling as an emergency fund and to get a bunch of pricey home repair & improvements done before I get laid off in December.

  12. Jerry // February 19, 2010 at 4:33 PM  

    I think everybody needs something like this as insurance for their sanity. What a great thing that you could afford to take off for the beach because of this money saved. Good for you. Knowing that you are going to use the money for fun may lead you to save even more.