Why You Should Build A FOMO Fund

Have you ever seen a pricey dress you couldn’t bear to walk away from? Or a new television deeply discounted before the big game? What about a $99 round-trip flight to your hometown? Or that once-in-a-lifetime $300 flight abroad? Have you ever considering picking up more gear for your hobbies, taking a last-minute trip, or buying a years’ worth of chocolate just because, but thought better of it due to the cost? I’ve been there.

We all know the importance of an Emergency Fund. Whether your car breaks down, you receive an unexpected medical bill, or lose your job, your emergency fund can reduce stress and financial stain when these these negative things happen.

Just in the last year, our air conditining unit, water heater, and refrigerator all died and had to be replaced. And, two years after a major (and expensive) mold remediation project, we discovered more mold (requiring further remediation). Thanks to our Emergency Fund, we were able to pay cash for all of these necessities, though you better believe it still stung.

What Is A FOMO Fund?

A Fear of Missing Out (FOMO) Fund is an account or allocation of money dedicated not to emergencies, but to those once-in-a-lifetime experiences and deals that you couldn’t have planned for. It’s the opposite of an emergency fund–it’s an opportunity fund, providing the financial potential to quickly act on exciting opportunities that aren’t already factored into your budget.

Just last year, I purchased an ultra-light sleeping bag, bought several All Clad D5 stainless steel pots and pans, spent several hundred on better sewing tools and lovely fabrics, bought pricey artwork, upgraded from a Dyson upright to a stick, and bought an ergonomic Aeron chair for my working-from-home setup. Most of these items were discounted, limited in quantity, or cash-only purchases, and effectively limited-time offers. In the year prior, we embarked on a two-week tour de Pacific Northwest to visit old friends that exceeded our vacation budget and tossed some cash into Bitcoin for the lulz.

None of these expenses were necessary, but each and every one improved my quality of life or brought me joy. None of these experiences or acquisitions would have been possible without my FOMO Fund.

Unless you can see the future, there is no way of knowing what opportunities might excite you a month or a year from now. Building a FOMO fund allows you to prepare of those unplanned positive opportunities before they arrive.

Maintaining Your FOMO Fund

Similar to an Emergency Fund, it’s a good idea to keep your FOMO Fund easily accessible to take advantage of opportunities quickly. I personally use Ally Bank and have my savings account allocated into separate “buckets” representing different goals. For distant goals, such down payment on a house or post-pandemic vacation, I transfer the bucket funds into CDs to garner a slightly higher interest rate.

I make regular deposits to my FOMO Fund with each paycheck, contributing $100 per month plus any gifts or bonuses across the year. The $2,000 or so annually goes a long way. On top of that, knowing that there is a limited amount of funding available means that I am especially discerning when considering whether or not to make that special purchase.

Tapping Into Your FOMO Fund

Perhaps the best part of a FOMO Fund is that you get to choose how to use it. It’s helpful to consider your values, priorities, and favorite past experiences or purchases because this may give you a better idea of circumstances under which you would tap into your fun-fun-fun fund.

I personally tend to prioritize travel, discounted gear for my favorite skill-building hobbies (cooking, backpacking, sewing, etc.), unique artwork (I’m fascinated by crypto-art via non-fungible tokens), artesian chocolate, and speculation in blockchain technologies. Your dream opportunity may be an exotic vacation, a music festival, or a conference; a luxury handbag, a used guitar, or an out-of-print book from your childhood. There are no limits!

I keep a working wish list of items and experiences that fall outside of my set budget and watch for these items to go on sale. For both opportunities on my wish list and those that are now, I typically spend a day or two considering whether it truly is something I want to spend the limited funds on. I’ve found that the thoughtfulness around the decision often solidifies my confidence in the expenditure and creates a sense of excitement. No more fear of missing out.

How about you?

Do you set aside money for unknown future fun? If not, is that something you would ever consider doing? Finally, and perhaps most importantly, what kinds of products or experiences would you spend you FOMO fund on?