What Is Blow Money?

We talk budgets a lot over here. And you may have seen us use the term blow money from time to time and wondered exactly what it means. First, let's define what blow money is NOT. Contrary to what it sounds like...it's not your drug addiction line item. That goes on another line...just kidding...hugs not drugs, people!

blow money

>> Before we go further into all that is blow money, it's important that you have a budget. This post can help you get started. If you're anti-budget, keep reading! A blow money category might help you to not feel as restricted.

Blow Money Defined

Blow money is like a safety net for your monthly budget. Wiggle room if you need it. I like to think of it as a super small mini-emergency fund. The "Oops, we forgot to budget for..." item. It's the reservoir you pull from when another item actually costs more than you budgeted for, or when something unexpected comes up.

Examples: A birthday dinner with friends that you don't want to miss, Girl Scout cookie season, or a spontaneous trip to our parents' for the weekend (gas money).

How We Use Blow Money

We typically have $10 set aside in our budget as blow money every week. I think that might be pretty low, but we've also gotten pretty good at budgeting over the years. If you're just starting out, you might need $50 or $100.

The goal of the blow money category is to use it when something comes up that you were not expecting.

However, it can be tempting to allow yourself $50 at the bottom of your budget just in case, but end up wasting that money on things that aren't necessary.

I'm not sure we are the best examples of this, because we often give ourselves a little reward for not using the blow money. If we have reached our savings goal and haven't used the $10 extra or gone over budget in any category at the end of the week, we get to claim the money for our personal account. We pay ourselves for sticking to our budget in other categories. We are OK with this because of how low our personal spending/clothing budget is already (2% of our budget).

The key to minimizing the blow money category is the ability to anticipate. When we are creating our budget for the upcoming month, we look at a calendar and think very hard about anything special that might come up that we will need to budget for - events that are not within our normal, every week routine.

If your blow money category is a bit heftier than ours, and you skate through your budget without having to use it, I would suggest tacking the remainder onto whatever baby step you are currently on (getting out of debt, saving for emergencies, saving for retirement, saving for college, paying off your house), to take full advantage of your unused dollars.

What's your take on blow money? How do you use it?