At the beginning of our journey towards financial freedom, we took the extreme route to budgeting. That meant, if it wasn’t essential, we weren’t paying for it. Needless to say, that didn’t work out so well and we eventually discovered a secret: Blow Money.

Blow money (often referred to as fun money or pocket-money) is cash that you include in your budget that you can spend with no remorse. If used correctly, this category can be exactly what you need to stay on track with your budget.

Here’s what I mean:

People create budgets because they help you follow a plan for your money. Dannie and I initially thought that your budget should only contain what’s necessary. We didn’t put aside any money that we could use to spend on ourselves.

Can you guess what happened next?

We found ways to spend the money anyway!

I know that I definitely had a hard time adjusting to the budget because there were always little things here and there that I would find myself ‘needing’ throughout the month. I would then spend money that wasn’t in the budget and that would lead to problems at our monthly budget meeting!

After a few times of this happening, we realized that we needed to do something different or else I was going to get in trouble every month.

Why Do You Need Blow Money?

Blow money helps keep you sane as you make your journey towards financial freedom. When your sole focus is on paying off debt or saving as much as you can, you can start to come apart at the seams pretty easily.

For most people, adding some blow money to their budget alleviates the intense pressure they might experience during the month. This actually works because you don’t have to feel any shame or guilt for spending money on yourself.

It also leads to a more honest relationship with money because you won’t feel the need to hide or deny anything you’ve spent money on from yourself (or your partner).

This is important because budgets can only work when you actually follow them. By adding blow money into the mix, you’ll significantly reduce the chance that you’ll blow your budget!

How Much Blow Money Do You Need?

The amount of blow money you’ll need during the month is going to be different based on your current situation. Remember, personal finance is personal. If you’re still deeply in debt and just starting to work on the basics, a smaller amount ($20 – $50) will probably be your best bet.

For instance, when we finally added blow money to our budget, we only allowed ourselves to have $50 each per month. However, once we paid off a considerable amount of debt and started to have more room in our budget, we increased our blow money to $100.

Decide what will work for you, but be realistic.

Most likely, you won’t NEED a $500 fun money fund. Just like everything else in your budget, your blow money needs to be reasonable and proportionate to your income and other responsibilities. You should never wind up in a situation where you have more money budgeted for ‘fun’ than you do for things like groceries and utilities.

Make It Work For You

The beauty of personal finance is that you can pick what advice works for you and what doesn’t. If you don’t have blow money in your budget at the moment, add it for a month or two and see if you feel a difference.

Getting out of debt is serious business but it’s still important to have a bit of fun along the way!

$tay wealthy friends,

— Dj

Is blow money already in your budget? If so, how much?

If not, will you be adding some after reading this?

Let us know in the comments below!!