Budget How-To: The Blow Fund

This week we covered a sinking fund. Basically, it’ just a section of the budget for setting aside a certain amount of money per month in preparation for a predictable expense. A couple examples we used were anything from Christmas savings to saving for a house or car. Today, we’re going to look at a type of sinking fund: The Blow Fund.

Here’s the video version for those less inclined to blog posts!

The Blow Fund

What is the blow fund? I actually took this term from our pastor when he mentioned off hand how he and his wife budget fun money. Each month, he and his wife get the same amount of money put into their blow fund. And each is allowed to blow their money on anything they want without having to talk to the other.

I liked that idea a lot when Bailey and I were engaged so we implemented it into our first budget.

$30 a month.

Not a lot but hey, one of us was in college. We had other expenses!

Since Bailey graduated, we splurged and upped our monthly blow fund money to $50 each. Okay, maybe it’s still not a lot.

Unlike a sinking fund for tires where you reach a goal and stop saving (like $600), the blow fund doesn’t leave the budget. Every month the same money is set aside for this. It can continue to grow. Last October I had $400 in my blow fund!

What about monetary gifts for birthdays and Christmas?

We actually put these in our blow funds as well. I know some people who don’t but my opinion is that, if someone gives Bailey a gift for graduating from college, it’s a reward for pushing through. I’m fine with her getting to spend that on something she likes. And if we get money for birthdays or Christmas, we put that in our blow funds too.

Some people handle that differently. This has worked well for us though.

Why a Blow Fund is Important

I assume you don’t need me to lecture you on why a blow fund is important.

“I’m just glad you are telling me to spend money on frivolous purchases!”

Yeah, pretty much. But there’s a lot more depth to a blow fund than that.

A blow fund gives you some space in the budget for buying something you couldn’t justify otherwise. It gives you permission to be a little irresponsible.

That permission is important because it’ll help curb those frivolous desires otherwise. Instead of thinking “Ugh, I can’t buy that because we have to be ‘responsible'” it’s more like “Oh, I could buy that with my blow fund. But if I do, I’ll have less blow fund for something else so maybe I shouldn’t.”

If you give yourself no space in your budget for fun money, chances are you will actually spend far more on frivolous purchases than if you budgeted for it.

Don’t Go Overboard!

This is where you have to be careful. Don’t. Go. Overboard.

You go overboard and you could drown. Financial drowning is no fun.

Bailey and I kept our blow funds at a minimum while we were on one income and she was in school. $30 each, that’s it.

Now, we’re up to $50 each. Overall, that’s not a lot. It’s a small percentage of our budget but it does give us just enough space to spend money on some fun things we couldn’t justify otherwise.

A friend of mine tends to go overboard with his blow fund. He budgets out every month for the necessities and he also budgets a blow fund. But if that particular month brings the desire to purchase a radio for his motorcycle helmet and there isn’t enough money in the fund, he shifts money around so he can put more in the fund. It happens every month pretty predictably.

I want you to understand a blow fund is a great tool but you have to control it. Keep it consistent, don’t throw more in your blow fund just because you have money. Every time that happens, it takes away from your other goals like retirement (or another sinking fund!).

What do we spend our blow funds on?

Recently, Bailey has been obsessed with Happy Planners. She got one and now has an addiction to purchasing stickers for it. Like, all the stickers. She has used her blow fund to purchase 20 books of stickers.

She has over 16,000 stickers.

But she has a blow fund. That many stickers wouldn’t fly if it were coming out of our normal budget. But she can spend it how she wants!

I, on the other hand tend to save up for technology or larger things in general. Last year, I bought a used iPad and a used Apple Watch. I haven’t regretted either purchase!

Financial Coaching Designed for You

As always, if you find you are in need of help, set up a time with me for free and we’ll talk your money and your goals. I’m a Ramsey trained financial coach and I love talking money and providing hope. Just set up a 30-minute call with me and I’ll listen to your situation and help you determine what needs to happen. My guarantee is if you don’t make progress, you get your money back. I promise the investment in coaching will give you payback many times over. And the first session is free.


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