Creating a slush fund for splurge expenses: the PayPal solution


Now and then, I sell stuff on eBay. Lots of us do. It gets rid of clutter, and I'm always surprised (and sometimes a little distressed) to learn that there always seems to be someone out there who's willing to pay money for my junk. But eBay, it must be said, can be a pain. For one, it forces common joes like me to get paid using either PayPal or a credit card. So despite the stupid fees that PayPal charges, I use it for its convenience, and when I sell little knick-knacks, people pay me by sending money to that account.

Pretty soon, I found a small balance was building up in my PayPal account, and I was wondering what I should do with it when I realized that these days, lots of online stores accept it. Pretty soon, a financial system developed that keeps my household budget on track: When it comes to impulse items, I only allow myself to spend what I have earned on eBay. To keep my expenses trim, I try to keep sundry purchases from mounting on my credit card by taking them out of PayPal instead.

It's a pretty simple idea, and it goes to the fundamental rule of good budgeting: Only spend what you have, and don't dip into your savings. Now PayPal is my petty cash drawer, and when it needs replenishing, I just do what I need to do anyway and get rid of some extra stuff.