Author Topic: Giving yourself allowance  (Read 4396 times)

Bjorn

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Giving yourself allowance
« on: February 19, 2015, 06:08:11 AM »
I try to keep a strict budget. At the 20th every month (payday) I transfer money to my bills acoount (6k) and savings account (13k). Whats left (5k) is typically what I have budgeted for food that month plus an averaged amount for "other" necessities. This average amount is on the high end because it makes me feel safe. What tends to happen is that I spend absolutely everything by the end of the month, even if "other" necessities is less that month than what I had planned for.

So for example, from the 5k food takes up 3k and "other" takes up 1k. Psychologically the remaining 1k is something I had calculated spending anyway so there is nothing stopping me from shopping more expensive food that last week before pay. Or drinking it up.

On the plus side I am keeping things very simple. On the downside I spend more than necessary. The only idea I've come up with so far is withdrawing e.g. 400 every month so that I have 100 in cash every week as fun money. The rest will be strictly for food and other necessities.

Has anyone had success giving themselves allowance like this? Any other ideas on how to do it?

alsoknownasDean

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Re: Giving yourself allowance
« Reply #1 on: February 19, 2015, 06:26:04 AM »
I do something similar. I get paid fortnightly, and keep $x in the bank account as my fortnightly 'allowance' for food/fuel/etc, and move the rest to the stash (drawing from it for most bills or rent). Oh, and I don't have a credit card :)

I've been progressively lowering the allowance amount as well, so it's about 40% lower than it was when I started a couple of years ago.

It's not a perfect system (I should analyse the amount more to see the allocation towards different categories), but it works OK for me.

shusherstache

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Re: Giving yourself allowance
« Reply #2 on: February 19, 2015, 07:03:31 AM »
DH and I combined our finances and both get $100/week for all clothing, hygiene, non-grocery food, entertainment and hobby expenses.

2Birds1Stone

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Re: Giving yourself allowance
« Reply #3 on: February 19, 2015, 07:16:20 AM »
HOw does one manage to spend $3,000/month on food??? Even with a family of 6-8 that seems very high.

Bjorn

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Re: Giving yourself allowance
« Reply #4 on: February 19, 2015, 07:21:00 AM »
I live in Norway.

3000 NOK is for 2 people and corresponds to about 430 USD spent on food monthly. When my wife can support herself this will be split between us.

So my weekly allowance would be $14, just enough for a beer at our expensive pubs or a cinema ticket.

Stash Engineer

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Re: Giving yourself allowance
« Reply #5 on: February 19, 2015, 07:22:27 AM »
I do the same thing with a bi-weekly allowance.  I think MMM advocates no allowance and only buy things that are absolutely necessary, but I'm not at that level of badassity yet.  I struggle to keep within my allowance of $160.

2Birds1Stone

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Re: Giving yourself allowance
« Reply #6 on: February 19, 2015, 07:30:24 AM »
That makes much more sense!

SpinGeek

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Re: Giving yourself allowance
« Reply #7 on: February 19, 2015, 07:31:21 AM »
We have a weekly allowance of $15 USD per person. This is our no-questions-asked fun money. My SO buys comics, I buy yarn. Any special personal spending comes out of this account, such as Ancestry.com fees, music or books. We also save up for larger purchases; you definitely know you really want that $900 spinning wheel when you've been saving $15 per week for it for 15 months!

Everything else comes out of the household account, and must meet the spending criteria (do we really need it, can we put off buying it, can we get it cheaper used or elsewhere?)

Bjorn

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Re: Giving yourself allowance
« Reply #8 on: February 19, 2015, 07:32:33 AM »
I do the same thing with a bi-weekly allowance.  I think MMM advocates no allowance and only buy things that are absolutely necessary, but I'm not at that level of badassity yet.  I struggle to keep within my allowance of $160.
There are costs I would normally consider allowance, as they are not necessities to keep me alive and happy. Such as my monthly subscription to Netflix, or winter buscard when biking is a hassle. These things are however budgeted for and deducted from my salary account - added to my bills account - paid for when bills arrive.

I'm sure I could cut my costs by another 1k-2k a month (140-280 USD) and still remain happy. Part of it is getting this allowance thing to work.

dz1087

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Re: Giving yourself allowance
« Reply #9 on: February 19, 2015, 07:35:57 AM »
I get paid monthly. My primary direct deposit account is my savings account. I have an automatic allotment that goes to checking each month. This covers all bills and spending. This way, what doesn't get put into my tsp gets thrown into savings which i can make withdrawals to my ira from.  This puts thing on autopilot for me, which is especially helpful when i deploy or go on temporary assignments. Our pay goes all wonky when traveling or overseas so this helps stabilize what dw knows she can spend.

davisgang90

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Re: Giving yourself allowance
« Reply #10 on: February 19, 2015, 01:20:52 PM »
I've been slowly working my spouse (and me) into a more mustachian mindset.  We each have an allowance to spend on anything we want and I send the rest to pay bills and invest. 

She sometimes complains, but then I tell her how much our net worth has gone up under the current plan and she is good with it again.

Eric

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Re: Giving yourself allowance
« Reply #11 on: February 19, 2015, 02:43:24 PM »
Psychologically the remaining 1k is something I had calculated spending anyway so there is nothing stopping me from shopping more expensive food that last week before pay. Or drinking it up.

Then change your mindset.  This is real, actual money that you can use to quit working.  Spending it on anything that isn't adding value is doing yourself a disservice. 

Workinghard

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Re: Giving yourself allowance
« Reply #12 on: February 19, 2015, 05:41:06 PM »
Our allowances/spending money comes from overtime.