I normally run Fudge diceless, so my take will be a bit different than most. A FP can exist in one of 3 states in my game: banked, committed, or spent. Banked FPs are just sitting there, but deliberately not used for the purpose of gaining a greater advancement than simply using the FP as is. Committed FPs are used for the scene/encounter and can't be used again until it ends. Committing over a threshold may result in losing FP or health levels (over-exerting, fatigue, exhaustion) - but the FP not lost will be returned. Spent FP set up world-changing Facts that apply to all characters from that point on, limited only by table consensus and prior Facts.
Each character has their FP divided up in categories that are tied to Traits (my usual division is Action, Reasoning, Influence). A Committed FP raises or lowers a Trait by 1, capping at Legendary/Abysmal (yes, this means a player could buff themselves and nerf their opponent/obstacle with the same action). Spending in the same context would change the Trait permanently, in accord with other issues (FP as XP costs, etc). You can also spend FP on another player's character - you're establishing a Fact about them that just serves to Bring More Awesome to the game...
The GM gets FP as well, divided up by how it's acquired. I normally have an encounter budget based on the number of player characters for the session, a pile of FP gained from how long the players take to get ready for the adventure (the research and exposition that doesn't drive story or character), and a pile of discretionary FP from non-game-play BS - every Monty Python quote, every time someone checks txts that don't have anything to do with the kids or the house burning down, every time someone wants to argue rules... FP for me. Unlike Player FP, GM FP can only be Spent to establish Facts: if I want to place a dragon encounter in the fantasy adventure I'm running, I spend FP for the dragon (I use d20/OGL CR as a cost basis), improve the special attack with more FP (yeah, "'tis but a flesh wound" seems real funny now, doesn't it?), modify the map the PCs researched to find the cave where the dragon's at ("should've been a left, not a right"), then use more as needed to make the encounter memorable (dragons should always be memorable). However, it's just poor form to nerf PCs' Traits - better to make the encounter harder and thus Mean Something. Doesn't mean it couldn't be done - just that it'd be incredibly tacky.
Approaching it that way, I've not had a problem with a PC remembering to use FP - nothing happens without them, there's no game if no FP is used. An obvious intermediate tactic would be to use Committed dice to buy dice for the encounter, with a threshold of either 3 or 4 (sure, you can buy 6dF, but it'll wind up costing you 2 FP in the end). Or Spend FP to buff/nerf a Trait before a roll.
To encourage using the FP, I'd use Banking. Banked FP gain interest when used to improve the setting or characters, but no interest when just used as FP (from previous sessions). FP that's not Banked (up to a threshold) goes away at the end of a session - If the threshold is 3 and I have 5FP, I need to Bank those extra 2 or Spend them quickly. However, if I Bank them too early, I can't use them for the rest of the session... and since I need to make that decision at the sessions' tilt scene, I'm forced to make a hard choice on what to do.
As with any rule idea, if it isn't fun don't use it...

ann wrote:

When we pointed this out to Paul, he was astonished.... he certainly thought he'd been awarding Fudge points! Maybe we'll actually get some Fudge points next session, we certainly need them! We're in Iceland in January 1930,  about to go either to a volcano or a glacier or a mountainous area, depending on whether we decide to follow the enemy -- who has hundreds of men to our group of 7 intrepid adventurers -- or go where they're not and hope that we get lucky and find the end goal first. Fortunately Iceland in January isn't as cold as most people might think. But it's awfully dangerous in the wilderness!

Man! Just because the players have dug themselves a heap more trouble than they counted on is no reason to hoard your Fudge points! I need you to use them all up so you'll be doomed at the final encounter.... err whoops, did I say that in my outside voice! Dang. Beside, the way you were rolling dice last game (I think something like 4-6 superb or legendary rolls  in a row!) you don't need any Fudge points!

thedeadone wrote:

I tried to tackle this problem in a slightly different way. I've been experimenting with creating a mini-economy of FPs in game. I've created a little system to replace Fudge Points (which I call Fudge Passions). I haven't tested it anger yet so it's still experimental.

Thanks for posting the link. I really like the mechanism - it has some aspects of Fate - but fits regular old Fudge better as an add on and focuses on character motivations.  Nicely done!

paul wrote:

Thanks for posting the link. I really like the mechanism - it has some aspects of Fate - but fits regular old Fudge better as an add on and focuses on character motivations.  Nicely done!

Thank you. 

EKB wrote:

Approaching it that way, I've not had a problem with a PC remembering to use FP - nothing happens without them, there's no game if no FP is used.

That sounds very much like how a game of Universalis might go down, or at least it seems to promote a similar type of experience. You don't have any APs of using it?

thedeadone wrote:

That sounds very much like how a game of Universalis might go down, or at least it seems to promote a similar type of experience. You don't have any APs of using it?

I do, but the audio quality has been crap - the hazards of playing on a commuter train...
The comparison to Universalis is apt, though this is more closely modeled on Mortal Coil and some parts of Gumshoe games such as Trail of Cthulhu. The idea of a GM having a budget for building an adventure has some roots in AD&D DMG and in a more explicit form in Agon. I rip off a lot of good ideas and combine them in various ways... often using Fudge as the engine. Thus the prior (and unfortunately named) FAST project as a way of building a consistent toolkit.
The one constant I've had with this FP technique is that the players (GM included) need to be active participants. Taking a passive approach has killed the mood/pace quickly.