Author Topic: How to start an allowance system ?  (Read 4859 times)

life_travel

  • Stubble
  • **
  • Posts: 187
  • Location: Australia
How to start an allowance system ?
« on: September 01, 2017, 03:11:56 PM »
Question for people that have combined finances but use an allowance system . We have everything 100% combined and DH is somewhat spendier than me, now that we are committed to take sabbatical and maybe semi FIRE in 2020 we need to make it work .
I wast thinking of a large allowance per person that then all personal discretion expenses to be used from.
I thought he would welcome the thought of " his own money " ( as I look after ALL finance things otherwise ) but when I mentioned it this morning his response was" that's almost living separate lives"
. in a negative way .

So for couples that use an allowance, how did you introduce it ? Was it successful ? Or not ? What are your tips and tricks 😊

geekette

  • Handlebar Stache
  • *****
  • Posts: 2127
Re: How to start an allowance system ?
« Reply #1 on: September 01, 2017, 03:50:49 PM »
I'm not sure it'll help, but we phrase it as "guilt free" money. 

Laura33

  • Magnum Stache
  • ******
  • Posts: 2908
  • Location: Mid-Atlantic
Re: How to start an allowance system ?
« Reply #2 on: September 02, 2017, 04:01:31 PM »
Well, if he doesn't want to do it, it won't work.  What about asking him how he'd like to manage it?  I have two rules for when I disagree with DH on something:

1.  You can't choose an option that puts all of the burden on the other person; and
2.  You can't just veto an option without proposing something yourself.

It sounds like your DH is perfectly happy with the current system, because you do all the work and he gets to go buy whatever he wants.  So if you have both decided that you need to cut back on "extra" purchases to support another goal, how is that decision going to be enforced?  One way is an allowance; another way is to mutually discuss and agree on every single purchase before it is made; another is to use cash-only to make sure the limit is not exceeded; etc.  And of course there are the non-desirable outcomes, like him continuing to buy stupid shit and you turning into nag/enforcer/mom; or having no enforcement mechanism and wondering every month why you're not making progress toward your goal.

You may actually have to start with some of the "bad" options before he will see the value in the others -- we moved to the allowance system after originally planning to combine everything, because I could see myself turning into a shrew over DH's stupid spending.  I think it is completely fair for you to say that what you are currently doing isn't working; that if you guys are really serious about your goals, you need some way to enforce that day to day; that you thought the allowance system was one way to get there; but that you understand he doesn't find that particularly appealing, and so you are very interested in hearing his ideas for how to address the situation. 

And if he then says what my DH did in one particular conversation ("that's ok, I'm perfectly happy with the way things are right now" [where I did everything]), you can respond like I did ("Haha!  That's funny!  No, really, what's your preference?").

protostache

  • Pencil Stache
  • ****
  • Posts: 899
Re: How to start an allowance system ?
« Reply #3 on: September 02, 2017, 07:57:55 PM »
We started using a small allowance system because my spouse started spending money in free2play iPad games and it really bothered me. We decided together that $50/mo was a reasonable place to start, so we got separate checking accounts with separate debit cards and auto-transfer $50/mo each into those checking accounts. She linked her Apple account with that debit card and happily sticks within her limit, and I don't ever have to see it. I tend to spend mine on Kindle books.

Rowellen

  • Bristles
  • ***
  • Posts: 396
  • Location: Australia
Re: How to start an allowance system ?
« Reply #4 on: September 02, 2017, 10:43:28 PM »
It works for us. My DH likes to downs in gambling and golf. These are things I see little value in. I like to purchase books and little things for the kids. He hates reading and wouldn't think to get things the kids need. Seriously if it were up to him, they'd be wearing hand me down rags 2 sizes too small and doing nothing outside of school.

So for us or "spending" money has prevented a divorce.

We initially set it up when we purchased our first home. We combined everything to minimize our mortgage interest. He was happy to let me take care of the budget as long as he had cash in his account.

gooki

  • Handlebar Stache
  • *****
  • Posts: 2486
  • Location: NZ
    • My FIRE journal
Re: How to start an allowance system ?
« Reply #5 on: September 03, 2017, 01:35:02 AM »
We moved to the allowance when we purchased a home together (before we were married).

I guess having a big event to trigger the discussion helped. We review the amount every few years. It's fluctuated between $40 and $75 a week each.

I'd be looking for his opinion on what a reasonable amount is for personal expenses per year/month. Compare it with yours and agree on an amount, with the caveat we'll re-evaluate it in say one year to make sure it's working for both of us.

Then decide the best way to manage it. Expense tracking software, regular finance talks, allowance, etc.
« Last Edit: September 03, 2017, 01:36:47 AM by gooki »

life_travel

  • Stubble
  • **
  • Posts: 187
  • Location: Australia
Re: How to start an allowance system ?
« Reply #6 on: September 03, 2017, 06:22:07 AM »
Thank you for all your replies. He is really not THAT bad , just naturally would choose item or service on looks/taste first and price second .
Laura33 you are right , we need to find a system that makes us both accountable each day. None of us ever spend more that $100 without discussing it first , apart from rare cases but it's little purchases that add up.
We had plenty of arguments in our 20 years together but none of the big serious ones were about money . That's a positive , right ? 😊
We want it to be better ! To achieve our goals.

We started using an app where we track our spending 3 months ago , just a simple free one . It helped to get him involved somehow.
If I would ask him , what shall we do , I'm pretty sure he would say " everything is fine as it is , we just need not to spend " . And then things pop up that we " need" and we can't save what we planned to save .
I guess what worries him is that separating money would lead to somehow making our unit not as " whole " as before . Both of us always strongly believed that we want to combine everything 100% ( and we did for years ).
Has anyone tried allowances but didn't like it and gone away from it ? To be honest it would be super strange to have "my" or "his" money . Hence my initial question
I guess there is no harm in trying , maybe it's the fear of change ? 🤔 😊

davisgang90

  • Handlebar Stache
  • *****
  • Posts: 1294
  • Location: Roanoke, VA
    • Photography by Rich Davis
Re: How to start an allowance system ?
« Reply #7 on: September 03, 2017, 08:30:10 AM »
My wife and I each get an allowance out of each paycheck (she's a SAHM).  We can spend it however we want.  Any other purchases outside of the budget have to be discussed.

It works great for us.

Laura33

  • Magnum Stache
  • ******
  • Posts: 2908
  • Location: Mid-Atlantic
Re: How to start an allowance system ?
« Reply #8 on: September 03, 2017, 01:29:14 PM »
Thank you for all your replies. He is really not THAT bad , just naturally would choose item or service on looks/taste first and price second .
Laura33 you are right , we need to find a system that makes us both accountable each day. None of us ever spend more that $100 without discussing it first , apart from rare cases but it's little purchases that add up.
We had plenty of arguments in our 20 years together but none of the big serious ones were about money . That's a positive , right ? 😊
We want it to be better ! To achieve our goals.

We started using an app where we track our spending 3 months ago , just a simple free one . It helped to get him involved somehow.
If I would ask him , what shall we do , I'm pretty sure he would say " everything is fine as it is , we just need not to spend " . And then things pop up that we " need" and we can't save what we planned to save .
I guess what worries him is that separating money would lead to somehow making our unit not as " whole " as before . Both of us always strongly believed that we want to combine everything 100% ( and we did for years ).
Has anyone tried allowances but didn't like it and gone away from it ? To be honest it would be super strange to have "my" or "his" money . Hence my initial question
I guess there is no harm in trying , maybe it's the fear of change ? 🤔 😊

Well, FWIW, we've made 21+ years, despite my SIL's expressed fear that having $200/mo each to spend on our own meant that we weren't really committed to the marriage. 😉

I guess what I'd say is it's really up to him, because if he's not going to cooperate, or is going to see it as a negative, it's not worth it.  All you can really say is, well, you think this is working, but we're not actually making progress because something always comes up.*  So we can keep doing things this way, as long as we both accept that our future plans will not happen as quickly as we want them to and are happy with that result.  Or if we are frustrated that something always comes up, we can try something different.  You can lead a horse to water and all that.

* Note that this is something that you can show with actual financial data from the last XX months since you established that goal.

Goldielocks

  • Walrus Stache
  • *******
  • Posts: 6969
  • Location: BC
Re: How to start an allowance system ?
« Reply #9 on: September 03, 2017, 04:46:03 PM »
Well, if he doesn't want to do it, it won't work.  What about asking him how he'd like to manage it?  I have two rules for when I disagree with DH on something:

1.  You can't choose an option that puts all of the burden on the other person; and
2.  You can't just veto an option without proposing something yourself.

It sounds like your DH is perfectly happy with the current system, because you do all the work and he gets to go buy whatever he wants.  ...

And if he then says what my DH did in one particular conversation ("that's ok, I'm perfectly happy with the way things are right now" [where I did everything]), you can respond like I did ("Haha!  That's funny!  No, really, what's your preference?").

This post made me laugh... I was thinking the same thing -->  DH would disagree with proposals when it was obvious that he would need to conform to a budget, and only agree when he knew he would blow the budget despite agreeing to it.   So having a rebuttal is actually a good thing, as your spouse is still honestly discussing the situation!    Eventually, the large allowances, like you describe, was the only thing that worked, because it is hard for DH to spend it all.

gooki

  • Handlebar Stache
  • *****
  • Posts: 2486
  • Location: NZ
    • My FIRE journal
Re: How to start an allowance system ?
« Reply #10 on: September 05, 2017, 06:12:39 AM »
You could try the pay your future self first method. Each pay day transfer the amount you (as a family) plan to save into your investment accounts and simply make do with what is left over.

life_travel

  • Stubble
  • **
  • Posts: 187
  • Location: Australia
Re: How to start an allowance system ?
« Reply #11 on: September 06, 2017, 06:19:27 AM »
Yeah that's  what we were doing when we were paying off some loans. With savings .. It doesn't work as well somehow... Things happen and we use credit cards for everything so we just use what we need and then next month once the card is paid off , there is nothing to add to coffers :(

catccc

  • Handlebar Stache
  • *****
  • Posts: 1704
  • Location: SE PA
Re: How to start an allowance system ?
« Reply #12 on: September 06, 2017, 10:31:16 AM »
DH and I started a couple budget lines called "Jack's fun fund" and "Jill's fun fund."  I have spent mine on stuff like a new iphone (yes, a phone is kind of an essential, but my previous one was not in need of a total replacement.  It was just getting short on battery life and I was tired of apps not working on it because it was old-ish), race entry fee (first triathlon this year!), live shows (DH and I could venn diagram our musical tastes with only moderate overlap...), clothes I want but don't need.

Rather than parcel out $x each month, I just dumped $600 into this category at the start of the year for each of us, meant to be used as we desire for 2017.  (We use YNAB)  Occasionally an individual's fun fund is boosted by some irregular inflow of cash.  (For instance, got $50 check from MIL for my bday, how sweet of her!)  $600 is not that much in the grand scheme of things and we can spend it guilt free without impacting the family's budget.

except it's our actual names.  we are not really jack and jill.

catccc

  • Handlebar Stache
  • *****
  • Posts: 1704
  • Location: SE PA
Re: How to start an allowance system ?
« Reply #13 on: September 06, 2017, 10:33:43 AM »
I know it's just semantics, but I like "fun fund" way more than "allowance."  Allowance just reeks of juvenility.  IMO married people don't "allow" one another to do things, they just behave in an agreeable manner in consideration of one another's needs.

Laura33

  • Magnum Stache
  • ******
  • Posts: 2908
  • Location: Mid-Atlantic
Re: How to start an allowance system ?
« Reply #14 on: September 06, 2017, 12:31:37 PM »
I know it's just semantics, but I like "fun fund" way more than "allowance."  Allowance just reeks of juvenility.  IMO married people don't "allow" one another to do things, they just behave in an agreeable manner in consideration of one another's needs.

Personally, I call ours "[DH's] Stupid Money" and "Laura's Extra Savings."  :-)

ETA:  In fact, the "official" name in our system is "Fun Money."  Those are just my own personal names for them.
« Last Edit: September 07, 2017, 10:31:28 AM by Laura33 »

life_travel

  • Stubble
  • **
  • Posts: 187
  • Location: Australia
Re: How to start an allowance system ?
« Reply #15 on: September 06, 2017, 04:51:40 PM »
I know it's just semantics, but I like "fun fund" way more than "allowance."  Allowance just reeks of juvenility.  IMO married people don't "allow" one another to do things, they just behave in an agreeable manner in consideration of one another's needs.
Actually YES!! That's what was bugging ME subconsciously about that idea!! The notion of having to "allow" each other .. as now we just talk about our desires ...

Goldielocks

  • Walrus Stache
  • *******
  • Posts: 6969
  • Location: BC
Re: How to start an allowance system ?
« Reply #16 on: September 06, 2017, 04:55:26 PM »
You need to think more like Jane Austin, when you read "allowance"..   as in, a genteel woman with an allowance of 200 lbs per year...   (example, not a quote).   In that case, it was the annual $ amount that an independent woman (or man) would spend from her trust fund / endowment.

Sethmeister

  • 5 O'Clock Shadow
  • *
  • Posts: 4
Re: How to start an allowance system ?
« Reply #17 on: September 06, 2017, 05:41:45 PM »
Me and my wife use an allowance system too.  It really helps to simplify our budget. 
We budget for:
Mortgage
Insurance
Groceries
Phone bills

And everything else, ( gas, going out to eat, clothes, haircuts, etc) comes out of our allowance.  Our allowance is $100.00 a week each.  It really works well for us.

life_travel

  • Stubble
  • **
  • Posts: 187
  • Location: Australia
Re: How to start an allowance system ?
« Reply #18 on: September 06, 2017, 06:58:58 PM »
Follow up question .
Currently in our overall frugal budget there is an item for $180 for my yoga and pole fitness classes .I went from VERY unfit ( skinny) person to quite fit in 1 year . I'm loving it !!
I know I will need to ask DH :) but first internet friends/ strangers :)
Do you think it's fair to give $180 fun money to him then ? Or keep my fitness as a budgeted item and then give extra $50- 100 each per month ? WWYD?

protostache

  • Pencil Stache
  • ****
  • Posts: 899
Re: How to start an allowance system ?
« Reply #19 on: September 06, 2017, 07:15:04 PM »
I would not include things like gym memberships in an allowance system. Healthy you helps keep the family healthy and is therefore a family expense, IMO. If DH balks offer to double the budget and he can take classes too!

Rowellen

  • Bristles
  • ***
  • Posts: 396
  • Location: Australia
Re: How to start an allowance system ?
« Reply #20 on: September 06, 2017, 08:34:51 PM »
My gym and DH's golf comes from our fun money. We budget $300 a month to include this though. It also includes haircuts, clothes, movies, books, alcohol, eating out without the rest of the family, and other similar things.

gooki

  • Handlebar Stache
  • *****
  • Posts: 2486
  • Location: NZ
    • My FIRE journal
Re: How to start an allowance system ?
« Reply #21 on: September 07, 2017, 05:05:36 AM »
My swim membership comes out of my personal money because only I get the benefit from it.

The beauty of the allowance systems is you don't have to balance it out as it's already balanced.
« Last Edit: September 07, 2017, 05:08:15 AM by gooki »

life_travel

  • Stubble
  • **
  • Posts: 187
  • Location: Australia
Re: How to start an allowance system ?
« Reply #22 on: September 07, 2017, 05:50:12 AM »
I would not include things like gym memberships in an allowance system. Healthy you helps keep the family healthy and is therefore a family expense, IMO. If DH balks offer to double the budget and he can take classes too!
He is happy with my classes , he used do go to yoga too but since gave up .

Kapiira

  • Stubble
  • **
  • Posts: 154
  • Location: Albuquerque, NM
Re: How to start an allowance system ?
« Reply #23 on: September 07, 2017, 09:42:54 AM »
My husband and I tried allowances and we stopped doing it after a little while.  There were too many things that fell into the grey area.  Like you said, do exercise classes come out of your fun money?  How about clothes?  Furniture?  Extra treats at the grocery store?  There were too many things that could go either way.

I would try transferring money into savings immediately and then pay for everything with a debit card instead of the credit card.

nobody123

  • Pencil Stache
  • ****
  • Posts: 519
Re: How to start an allowance system ?
« Reply #24 on: September 07, 2017, 10:05:19 AM »
<snip>There were too many things that fell into the grey area.  Like you said, do exercise classes come out of your fun money?  How about clothes?  Furniture?  Extra treats at the grocery store?  <snip>

My wife and I have a budget in Excel that we agree upon in January, finalized once my first paycheck hits so we can see the impact of health plan changes, etc.  We have 22 lines to cover the usual monthly expenses, and all known things are assigned into one of those categories.  We also have another 20 or so lines for sinking funds for things like property tax, car insurance, furniture replacement, etc. Then we have a Mr. allowance and Mrs. allowance lines.  Those are for guilt-free spending on things that don't necessarily benefit the family, such as grabbing a Starbucks when out shopping or buying a luxury clothing item.  We use a credit card for almost everything, so I spend 3 minutes a day while drinking my coffee updating the spreadsheet.  DW and I sit down for an hour at the end of the month to go over the purchases, pay bills, discuss the budget.  It has worked out fine for 13 years so far.  I am naturally cheap, my wife would spend every cent we make if she didn't have a guideline, so this works for both of us.

RyanAtTanagra

  • Handlebar Stache
  • *****
  • Posts: 1218
  • Location: SF Bay, CA
Re: How to start an allowance system ?
« Reply #25 on: September 08, 2017, 11:28:39 AM »
Yeah that's  what we were doing when we were paying off some loans. With savings .. It doesn't work as well somehow... Things happen and we use credit cards for everything so we just use what we need and then next month once the card is paid off , there is nothing to add to coffers :(

I'm going to go a different direction and suggest you two stop using CCs.  I know a lot of people control their spending better with a credit card, because cash for them tends to just fly out the window, but I'm the opposite.  The less I use my debit/credit cards, the better control I have over spending.  For me, the cash back or other bonuses for using CCs just aren't worth change in spending they cause.  The fact that the monthly CC payoff is whats causing problems, I would suggest moving to a cash system.  The CC tends to not let you see how much you're really spending until the end of the month, then you go 'well, shit'.  If you have to use a credit card for an online purchase or something big, immediately make a payment for that amount so you get it out of the bank account.  Or some similar system that causes the same mental effect.

RyanAtTanagra

  • Handlebar Stache
  • *****
  • Posts: 1218
  • Location: SF Bay, CA
Re: How to start an allowance system ?
« Reply #26 on: September 08, 2017, 11:31:59 AM »
Follow up question .
Currently in our overall frugal budget there is an item for $180 for my yoga and pole fitness classes .I went from VERY unfit ( skinny) person to quite fit in 1 year . I'm loving it !!
I know I will need to ask DH :) but first internet friends/ strangers :)
Do you think it's fair to give $180 fun money to him then ? Or keep my fitness as a budgeted item and then give extra $50- 100 each per month ? WWYD?

Oh, and this is up to you and your husband but I wanted to add, if a yoga/gym membership was keeping my partner in good shape, I wouldn't want that to come out of her personal funds.  I'd be more than happy to chip in 50% for that since I'm getting AT LEAST 50% of the benefit :-)  As long as it wasn't some crazy amount, but it's hard to put a price on health and fitness, especially if it's something that actually works.