We have a slush fund. Not sure where I got that term. Maybe Dave Ramsey.
For us a slush fund is stash of cash in our second account that is a bit seperate from our emergency fund. We don't touch the emergency fund, unless it is an emergency (or we can pay ourselves back in like 12 seconds)!
My husband is paid twice per month. Each paycheck is allocated to bills, investments, $900 cash for groceries, gas and miscellaneous. Left over cash gets put towards our goal...which is the truck now! It basically comes down to a zero based budget...every dollar goes somewhere.
However, I don't track every budget category known to man. It's too much work! So sometimes we do spend more than our paycheck, or more than that $900 that I allocate to variable expenses for the pay period.
Where does that extra money come from? The slush fund. I just transfer what money I need from there from time to time. Sometimes it's less than $20, sometimes it is more. The slush fund only have a few hundred dollars in it. If it gets down to zero or close to it, then I add some funds from a paycheck. Right now that would mean a little less to send into the truck loan.
We do pretty well keeping our spending within the limit we have given ourselves, but is nice to have a slush fund to dip into for those expenses that one doesn't always forsee.
Do you have a slush fund? Do you keep it in cash, another account, or right with your other funds?