Allowances; Morale Raised
Posted on April 10, 2007 by Her and tagged spending
We got allowance raises this month! Our original allowance amount was $75 each, twice a month. We have received this amount for the last two years. We talked it over and decided to raise this to $100 each in response to some recent financial discussions we had. We use our allowances to pay for everything we buy for ourselves, including clothes, meals, beer, gadgets, etc. We were both feeling that we couldn't buy the things we really wanted with this amount of allowance. As a result, I had been making personal purchases with money from the joint account, while Him quietly simmered. We have both recently gotten raises at work, and we felt that the small increase in our allowances would help us to feel freer in making personal purchases and get us back on track with our spending.
Comments/Trackbacks
Trackback URL: http://www.makelovenotdebt.com/MT/mlnd-trackbacks.cgi/1096
MVP | Apr 10, 2007
I'm sorry, but if you guys are serious about paying off debt and saving for your wedding, $400 per month (if I understand you correctly, it's $100 per person, twice a month) for personal expenses seems pretty excessive to me. You say with the $300 previously budgeted, you haven't been able to buy all the things you "wanted". If you're truly serious about reaching your aforementioned goals, you guys need to cut back on your lifestyle and evaluate what you NEED. That way, later on, when you're in a better financial position, you can have all the things you "want", as well as peace of mind and marriage. Just my opinion - and trust me, I'm speaking from experience.
Hightower | Apr 10, 2007
I agree with MVP. You're talking about $4,800 a year, for what? That adds up. While I understand the temptations you should hold strong or increase the amount by only $40 or $50 per month. . .not $100. Figure out the true meaning of a need vs. a want and seriously think about it before you make a purchase. The future Him/Her will thank you!!
jj | Apr 10, 2007
This works out to less than $7 a day per person. When you say meals are included in the allowance, does that mean all food, or extra-budgetary night out type meals? How much of the allowance is discretionary spending?
Parker | Apr 11, 2007
Good work! Good to see you kids coming to a mutual decision on increasing your allowances. The extra 50 a month doesnt need to be spent, but it is there in case something pops up.
Also, as long as you "paid yourself 1st" with the raises this year, an allowance increase is ok.
I'm glad you guys worked out a compromise. As far as MVP and Hightower's complaints go, do you guys always spend 100% of your allowances? Do you roll it over to the next disbursement? Or just round out what cash is left in your wallet till it's $75 again?
I have been giving myself anywhere between $100-140 a week (since I never pack lunch) and there's a lot of weeks where I have two twenties left over and I just grab 3 or 4 more for the upcoming week.
c | Apr 11, 2007
I love, love, love the allowance system. My husband and I use this as well. Since all of our accounts are joint, having an allowance removes the guilt of buying stuff that I want.
I see where some of the commenters above are coming from, but I think it's important to have some discretionary funds. When you are working professionals, you need new clothes and other items now and then. Regardless of what anyone says, if it works for you and you're both comfortable with the system, I say more power to you.
MVP | Apr 11, 2007
Just to be clear, I definitely agree with having an "allowance system". My only gripe is that $400 per month total seems outrageous. My husband and I get $50 each per month to spend on whatever we want (that doesn't include necessities such as clothes or groceries - we have a separate part of the budget for that). For me, that's generally lattes or a drink out with a friend. Yes, that means I sometimes must say "no" to these small extras if there's no money left in my wallet at the end of the month.
MVP - It looks like Him and Her use their allowance for clothes, which may be why they have higher allowences. Also, I wonder where you live. Everyone, despite their best intentions, has to take an occassional cab ride, and I'm sure Him and Her also like to go out with their friends on occassion. It seems that they should be applauded for taking their finances seriously so early in their lives; they're ahead of the game. Their spending is far below many of their 20-something Chicago peers, who use their credit cards for extravagant purchases, and if an allowance incease prevents Him and Her from falling into that trap, they deserve it.
My wife and I also use the allowance system. Once we moved to it, our savings went through the roof!
Just keep at it. You have a huge student loan to pay off, so be prepared for the long haul.
If I were you, I would try to live on far less to get that albatross off your neck ASAP.
I think it's great that you are able to sit down, discuss money, and work out a compromise. It seems like it's pretty smart of you to recognize the "simmering" and do something about it. With all the effort that you've been putting towards paying the debt down, it sure is a good idea to "live a little" in the form of extra allowance. I think my wife and I might have to start doing this. We end up trying not to spend any money and that just doesn't work very well.
I love the allowance idea, and only the two of you know what's right for you. If an extra $200 a month keeps you happy, healthy, and financially motivated, that's money well spent. If you find yourselves not using all the money or buying stuff you don't need, you can always make a mutual decision to scale back and still feel satisfied.
Hazygrey | Apr 15, 2007
$200 per person per month doesn't seem very high to me, especially if it include clothes. I live in Manhattan and my allowance is $300 per month and my spouse's is $200 per month (I get to have more because I work and spouse is a full time student).
We don't buy clothes from our allowance but save out of our allowance for each other's Xmas, Birthday and Valentine's presents. Add the occasional meal or movie out with friends and it goes very quickly.
Reading comments, I think MVP budgets VERY differently from me. I tend to budget using The Force (Mighty Bargain Hunter's term). So as far as what I eat, what I wear, what I drink and what entertains me, all comes out of my $100-140/week. I suspect you guys are a bit more like me. While MVP thinks $400/month for a person is a lot, it's actually not depending on what it's for. I forgo having TV of any kind so I can sit and drink a lovely tea at Starbucks every week and knit for 3 hours with my friends. But I'm sure a lot of people have a cable bill which they stick in their utility budget. Heck that's an extra $20-40 per week I can spend to dine out of the house!
Without scrutinizing your budget, none of us will really know whether or not your allowance is too much, right? I think it's about what works for you. If this bump in personal allowances is working, then more power to you.
So you didn't answer my question. I'm curious, only because I'm wondering if I should give myself money for one week or two or the whole month.
Mapgirl,
We each have a personal allowance checking/debit account. Each paycheck, we deposit $100 into each allowance account. We are each free to spend it all or save it up as we wish. Neither of us has any idea how much is in the other's account. We use our allowance to pay for meals out, clothing, entertainment, transportation, gifts (for friends and each other), our persoanl hobbies, grooming pruducts, etc.
Cami | Dec 29, 2007
Contrary to the thought that an allowance is a great idea, my boyfriend and I actually have never used the "mad money" system. I think it's a great "cap" on spending because it provides an upper-limit and takes away guilt for treating oneself to a little something here or there.
However, the danger lies in what those little amounts add up to. A few months ago I tried to introduce the concept of a combined monthly allowance of $100.00 ($50.00 each) for eating out. We almost always cook ourselves (habits from the student life... at least it's not mac n' cheese 24/7 now, LOL) and I thought it might be fun to go out for an extra drink once a week, or whatever. But then, we decided that even $1,200 hard-earned after tax dollars per year was too much to spend on pizza, booze and lattes. I mean, what's $50 a month each, right? But at the end of the year, $1,200 can take you on a nice vacation, or buy a new TV... look at the nice vacation you guys did on $400. Where I live, oftentimes a person can get one week, all-inclusive vacation in Mexico or somewhere hot for about $800/person (meals, 7 nights hotel, flights, unlimited booze....). To us, it was worth sacrificing the odd $8 martini and or tasty, greasy burger, to do a big trip at the end of the year. In fact, in a few weeks we are doing our first "real" trip to Jamaica.
I've concluded that the whole situation is based on what your values are, and what you prioritize. I have a sister in law who complains she has never been on a real vacation, and envies the one we booked. In fact, she'll nag about "where do we get money for that" (we are both students) and thinks we found a money tree somewhere. But then I point out that I don't pick up coffee on my morning route, or use the vending machine. It can be as simple as that.
My advice to you is, you are both responsible people, but really think about what else $4,800 can buy you in a year, or even the $600/year raise you just gave yourself. Or, if you haven't maxed out your pension plans, why not contribute the $600 to those, and the taxes you get back, spend on yourself?
Just some thoughts, good luck!
We're also on the $400 a month allowance system. This includes clothes, lunches, entertainment, etc. When I know I have my $200 to spend, I know that I can only buy the new running shoes I need, two new shirts for work, a pair of slacks, and START to save for the wife's birthday present. It keeps us sane and keeps us on track. Maybe not as effective as never spending a cent on anything fun for two years while we try to get out of debt, but I can't constantly tell my wife, "no, we can never go out to dinner with our friends b/c it's not in the budget". Life doesn't work like that.
W.S. | Apr 10, 2007
Yea! I was beginning to wonder when you'd give yourselves a break. Having just payed for a wedding last year, in addition to dealing with my husband's debt since we moved in together a few years ago, I totally understand your goals and ambitions. But sometimes, you have to let go of the rigid clasp on the purse strings. Way to find a balance!
Reply to this comment