Why you should build a ‘me fund’

“Who better to invest in yourself than you?” Cheng says. “Investing in yourself may look like self-care and wellness or could be getting new skills needed for a new job.”

Say you want to make a career change that would require additional training, such as a specific certification. It can cost hundreds, or thousands, of dollars to complete the education, training and exams required to gain professional credentials, depending on the industry.

That’s where your “me fund” comes in. If you’ve set aside money ahead of time, you’ll be able to use it to develop your professional skills without disrupting the rest of your finances, Cheng says.

Cheng has used this strategy in her own life. Before she became a certified financial planner 20 years ago, she evaluated the associated costs and how she would be able to cover those expenses while still taking care of her two young children at the time.

Her solution was to create a “me fund,” which she allocated money toward after taking care of other financial priorities. She later used it to cover her classes and exam fees.

Another perk: No matter what you use your “me fund” for, it can help you avoid expensive credit card debt from overreliance on your card for discretionary purchases, Cheng says.

Before setting aside money for your “me fund,” make sure you’ve taken care of your financial priorities, like housing and food.

Even if you’re not able to stick to those allocations exactly, it’s OK to start small when beginning to build your “me fund,” Cheng says.

“Don’t focus on the amount,” Cheng says. “Even if you take a little from every paycheck, you’ll see how that grows.”

And remember, as you build up your “me fund,” don’t be afraid to actually spend it.

“I don’t want people to feel like they’ve worked so hard to accumulate this money and now it’s stressful to see it go down,” Cheng says. “Your ‘me fund’ is a judgement-free zone.”