What is a Slush Fund?

If you’re feeling pinched in these difficult economic times, you may be thinking that you need to do more in terms of savings. As yourself the some questions and see if you can answer them. Do you have a healthy savings account? Is there cash stored away in case of an emergency? If you do, you have what’s sometimes referred to as a “slush fund.” A slush fund is a fund for loose, unallocated money that can be used for various situations as they arise.

The term “slush fund” has a fascinating origin in nautical history. Back in the olden days, the men on the sailing boats of long ago would boil their salted meat on long journeys. Fat and other material would boil off, and it was called “slush.” When their ship arrived on port, they would sell the slush and make some extra money for whatever the men wanted buy. So, these sums of money became known as the slush fund.

These days, a slush fund has become associated with being a very negative connotation. Generally speaking, a slush fund is used by powerful people to engage in nefarious activities, such as bribery. Companies will often keep secret slush funds to do things they don’t want the public to know about. They can also disguise their slush funds with various names to hide their true intent.

Of course, not all slush funds are for nefarious purposes. Anyone who has a loose amount of unallocated money they keep on hand for unforeseen purposes can be said to have a slush fund. Its primary connotation is money that’s not earmarked for any specific purpose, other than random contingencies.

Having a slush fund is a very good idea. Everyone needs to be prepared for the unknown, and a slush fund is one way to do it. Why not create a special savings account for it, and earn interest on it along the way?