Skip to main content
FDIC-Insured - Backed by the full faith and credit of the U.S. Government
Blog
Money Management
What Are Splurge Funds and How Can They Improve Your Life?

What Are Splurge Funds and How Can They Improve Your Life?

Jenius Bank Team
Updated 7/10/2025
• Originally Published 8/11/2023
Money ManagementSaving & Checking
Man in headphones playing an illustration of a guitar.
A splurge fund could help you handle impromptu purchases without knocking your other financial plans off track.We all have those purchases that just make our day better. Maybe it’s going out to a nice meal or buying that latest gadget. Or maybe it’s even deciding to go away for the weekend because there’s a sale on flights.It’s natural to want to treat yourself to the things you love. And it may be better for your bottom line if you’re intentional with these purchases. When it comes to managing your finances, finding a balance between saving, spending, and happiness is key.Setting aside money for those spontaneous purchases may allow you to enjoy important moments and experiences in life while still allowing you to improve your overall financial wellness. That’s where splurge funds could help.

Key Takeaways

  • Setting money aside for spur-of-the-moment purchases could help you avoid feeling guilty about these purchases.
  • Splurge money allows you to make purchases today while helping keep your financial goals on track.
  • Having a separate splurge fund may help you make more intentional purchase decisions and avoid going overboard.

What Is a Splurge Fund?

A splurge fund is a pool of money that helps you cover impromptu and fun expenses. It’s separate from your regular savings and serves as a guilt-free way to treat yourself to something special while still staying within your normal monthly budget. Some examples of splurges could be indulging at an expensive restaurant, buying a new outfit, going to a spa to relax, etc. Really, a splurge is whatever you define it to be.You can set cash aside for splurges or set up a dedicated savings account to help you keep track of the money more easily.

How Is a Splurge Fund Different from an Emergency Fund?

Splurge funds and emergency funds effectively sit at two ends of the spectrum of savings. Emergency funds are for covering unexpected financial hardships like losing your job. That’s why experts recommend having enough money set aside to cover between 3-6 months’ worth of living expenses. You can even save more if you want to be extra prepared. Splurge funds, on the other hand, are for impulse purchases, not emergencies. So, what does this look like in practice? Let’s break it down:
  • If you were to lose your job but still needed to cover rent, that money would come out of your emergency fund savings.
  • If you were to decide to buy concert tickets on a whim for this weekend, your splurge fund would cover that.
Of course, during a period of financial hardship, you may choose to curb non-essential purchases or redirect splurge funds toward essentials.

How Much Should You Keep in Your Splurge Fund?

The amount you keep in your splurge account depends on your personal preferences, spending habits, and disposable income.Consider the typical cost of your impulse purchases and aim to maintain a balance that aligns with these tendencies. You may also consider tracking your spending and adding up any purchases that weren’t part of your budget to give you an idea of how much you should keep in this fund.For example, if you enjoy occasional shopping sprees that amount to around $500, consider keeping a little more than that in your splurge fund to cover those expenses and provide a buffer.

Benefits of Splurge Money

Does the idea of a splurge fund intrigue you? Let’s summarize some potential benefits.
  • Indulge in the Moment: Sometimes life’s pleasures are spontaneous, and you don’t have the opportunity to budget for them in advance. A splurge fund could help you be ready!
  • But Avoid Going Overboard: While you get to indulge in spontaneous spending, you also have an opportunity to do so within clear boundaries by sticking to the funds you’ve set aside.
  • Spend Guilt-Free: Since you have already allocated the money for discretionary spending, you may experience less guilt associated with impulse buys.1
  • And Keep Other Goals on Track: If you use your rainy day savings for impulse purchases, then what happens when it actually rains? Having funds just for splurges could help you still stay on track with your other financial goals.
So, if you’re ready to move forward, let’s explore a possible next step.Jenius Bank Savings. Start saving on every dollar you deposit. It's not smart, It's Jenius. Start Today. Jenius Bank TM is a division of SMBC MANUBANK. Member FDIC.

Setting up a Splurge Account

If you think a splurge account could be useful for managing your money, it may be helpful to set up a dedicated savings account.Consider how much money you want to keep in this account and how you plan to add to it. It may be beneficial to add this fund as a line item in your budget to help keep this fund on track.Choosing to open a separate savings accountsolely dedicated to your splurge fund provides a clear separation between other savings and fun money, making it easier to keep track of how much you have available for splurges. Some people choose to have multiple accounts for savings goals, like a savings account for a wedding or a vacation fund!By making it a part of your financial plan, it could help you balance the discipline of saving and the occasional fun of splurge spending.

Final Thoughts

A splurge fund may be a valuable tool in your financial journey. It helps you to enjoy life's indulgences without derailing your long-term financial goals.By setting aside money specifically for spontaneous purchases, you help create a healthy balance between saving and spending.Remember, building a healthy financial life is about finding equilibrium—and a splurge fund may be a great way to achieve that balance. By embracing the concept of splurge money, you may still be able to treat yourself on occasion and continue on your path to financial success.