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Money Tip Tuesday

Give yourself an allowance.

Yes, you read that right.  I know we’re not six anymore and buying penny candy at the pool, but it makes sense.  Instead of keeping track of what everyone in your family spends on personal purchases every month, give yourself an allowance.  At the beginning of every month, my husband and myself withdrawal a certain amount of cash to spend as we please.  We call it “fun money.”  We use it for buying lunch at work, getting a new pair of shoes, or downloading a new Kindle book.  It’s up to us how we spend it and it rolls over from month to month.  Want to make a bigger purchase?  Don’t spend as much of your monthly money and save it up over time.

I think one of the biggest complaints of making (and following) a budget is that people feel deprived.  No one says you can’t follow a budget and still buy some of the little things that make you happy – without having to justify your expense to someone else or feeling guilty because you used the car insurance money to buy a new shirt.  It is key to allow yourself some “fun money” to stay on track with your budget.

This is ideal for people with combined finances/household incomes.  Families often fight about money.  You get upset because your spouse bought a new bike and it wasn’t in the budget this month.  Your partner gets mad because you purchased new shoes and they were planning on putting extra money on the car loan this month.  Giving yourself an allowance solves this problem!

Do you use this strategy when planning your budget?  How does it work out for your family?  Please share your thoughts in the comments.

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