• I love having systems for my money and used to direct all my savings into accounts for specific goals.
  • Now, though, I have a general “splurge” and “buffer” fund that I can dip into whenever I want to make a frivolous purchase or need some extra cash.
  • Having the splurge fund frees me from the guilt of spending money on stuff that’s not technically in my budget, and keeps me focused on reaching my other savings goals.
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As a self-proclaimed money nerd, I thrive on systems and structure to plan out my finances. In the past, I’ve meticulously plotted out money goals, set up savings accounts for each goal, and turned on auto-save to make steady progress. 

Besides assigning a separate savings account for each goal, I would neatly title each account with the goal in mind  — new car, laptop fund, Vancouver Vacation, etc. — along with exactly how much I wanted to have saved and by what date. 

If you’re into systems like me, you might be nodding your head in agreement. Otherwise, you might be thinking to yourself, where’s the fun in that? While this type of savings system certainly helped me hit my goals, these days I’m taking a different tack — and it’s helping me save more than ever. 

Now, I have a combination of specific savings goals and more general ones. While I do set aside a specific amount every month for things like a new laptop or bike, I also like to have unspecified savings that act as a buffer fund to tide me over, and for splurging. 

Here’s why I’ve decided that a mix of general savings and specific accounts has helped me save more money.

It fences in my splurges 

It’s not hard to find something I want to buy but don’t necessarily need, which is why I love having a splurge/buffer fund. I don’t feel like I always have to restrict myself from buying things I don’t need because my splurge fund is there. Especially during quarantine, when I’ve found myself browsing virtual craft fairs and online sticker auctions to stave away boredom,  having a pool of money to spend on small splurges prevented me from going overboard. 

As someone who tends to be analytical about her money and has trouble spending for pure enjoyment, having a designated splurge fund helps set parameters that allow me to spend on the fun stuff. I don’t have to fret about wrecking my other financial goals because spending money frivolously is baked into my budget.

It helps provide a cushion during slower income-earning months

Because I freelance full-time and I’m vulnerable to gaps in cash flow, having a small buffer fund helps tide me over during those lulls in work. I like to keep at least a few hundred dollars in my buffer fund, and use the Digit app to auto-save. Digit uses an algorithm to figure out how much you can reasonably afford to tuck away, and automatically pulls out small amounts at a time from your bank account. 

I don’t feel bad about tapping into my buffer fund during these lulls. That’s because I have a separate emergency fund for “true” emergencies. My buffer fund is a more fluid account that I top off on the regular.

It offers room for fun and spontaneity

Because I have a general “splurge” or “fun” fund, I don’t have to be riddled with guilt when I purchase something on the fly. For instance, during Thanksgiving weekend, I wanted to roast Cornish game hens, but I realized I didn’t have a proper roasting pan. I checked my splurge account, saw that I had enough to get a fancy kitchen gadget, and went for it.

My splurge fund also comes in handy if I go a little overboard on something I already saved up for. For instance, in the past when I traveled, if I went over the allocated amount for that trip, I could pull money from my splurge fund to cover myself.

It helps me stay on track with my other savings goals

If I didn’t have a fun fund for these types of purchases, it could potentially slow down my progress on my other money goals. That’s because I would feel deprived or, conversely, guilty any time I made a “frivolous” purchase.

But because I have a pool of money for general spending, I can stay on track with my other goals, such as stashing away $5,000 cash for an emergency fund, $10,000 on a down payment for a new car, or potentially saving for a down payment on a house, without quibbling. 

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