It was an average Saturday morning when A-Rob (<—my husband, if you’re new here) was doing some work on the computer, and I was a few feet away getting ready for the day.
Me: “What do you want to do today A-Rob?”
A-Rob: “Well, I could use some new pants, we could go shopping.”
Me: “Noooooo!!!”
A-Rob: [Puzzled look]
Me: “I need clothes too, but we don’t budget for it, so I never buy any. If you get clothes I will resent you.” (Honesty is the best policy in our family.)
They say that having a budget gives you freedom. Freedom from thinking too much about money. Freedom to buy what truly matters to you instead of wasting it haphazardly.
A-Rob and I have a budget. Every few weeks we log on to Mint.com and categorize our expenses to see where all our money is being spent. At the end of the month we see how much we have left. If it was a good month, we pat ourselves on the backs. If it was a bad month, we redirect and commit to doing better next time. And doing better is desirable because that left over money becomes a bonus payment to our debt reduction.
This system works for us because, 1) we generally spend less than we make, and 2) it doesn’t require a lot of time, only about 30 minutes a month. Time is an important benefit to us.
But though this method has treated us well over the past six months, it does have its limitations. For instance, we don’t have any hard and fast rules regarding our individual fun money – like clothes, or books, or gallons of paint. (What? Gallons of paint aren’t fun for you?)
And when we spend on these things at any given time, we don’t really know if it’s in our best interest to do so. We just do it and find out the results at the end of the month.
For me, this system makes me spend less. Since I don’t really know if I can afford something, I often don’t want to chance overspending so I don’t spend anything at all. But as my clothing example shows, this isn’t always the best plan. It leads to me constantly complaining about having nothing to wear, and apparently snapping at my husband in resentment.
This system also infuses me with a healthy dose of guilt at times if I sense that we’re overspending, but I never know if we are or aren’t, so it could be moot guilt. Nobody likes moot guilt.
For A-Rob, I suspect this system makes him spend more. Not having a limit means limitless ability to spend on whatever he wants. He’s just a spender by nature. I’m a saver by nature. So this budget brings out the extremes in both of us.
In order to remedy this limitation, and to plug some leaks in our budget for maximum efficiency, we’ve recently agreed to create our first hard and fast budget category in the form of the adult allowance.
This way, I can save for desperately needed clothes without guilt, and A-Rob can reign in his spending, also guilt free. And hopefully we’ll save some money along the way.
Further, I’m thinking of making our allowance not a fixed amount, but one based on our end of month savings. So instead of transferring all of our leftover money to debt reduction at the end of the month, maybe we’ll transfer 1/3 to debt, 1/3 to A-Rob’s allowance, and 1/3 to mine. This might give us a concrete incentive to save more on our other line items – like eating out or groceries – if it means more fun money for us in the end.
The only problem with the adult allowance is that we can’t figure out the best way to implement it.
We could use a cash method, but we both tend to make a majority of our purchases online. And at times we’ve been known to be too lazy to go to the ATM on a regular basis (don’t judge).
We could attempt to keep track of what we each spend, but I don’t know how well that will work. Neither one of us are very good at keeping receipts or writing things down. The plan would probably fizzle out pretty quickly knowing us.
The best option I can figure is if we each get our own prepaid credit cards and load them with our allowances each month. Our bank offers prepaid cards with no fees! Except they say the cards are for teenagers. Do you think they would make an exception?
Do you partake in the adult allowance? If so, how do you carry it out?
And on the subject of budgets, how do you do yours? Do you have not-to-exceed amounts that you stick to? Or do you keep it general? I’d love to hear.
For other discussions of the adult allowance, see
- In Praise of the Adult Allowance by Get Rich Slowly
- In Praise of DH’s Adult Allowance by Grumpy Rumblings of the Untenured
- The Adult Dispensation by To be Debt Free by 30
March 24, 2011 at 7:57 AM
Oh man, I swear I didn’t copy GRS’s title there… I wasn’t reading GRS back in 2008! It’s just that Adult Allowances are totally praiseworthy when they’re used on people for whom they work.
We, um, don’t budget. Initially we had so little money that I kept track of it all in my mind. Now we have enough and we spend roughly the same amount (emergencies and unexpected expenses always seem to be about the same…) that I can just rebalance monthly. DH keeps track of his allowance in his dayplanner. It’s very cute.
March 24, 2011 at 8:05 AM
We do allowances. Just started so there are still some bugs we are trying to work out. Each week we each get an allowance. We generally do cash but that is because I work in a building that happens to also have our bank in it. A lot of times though we don’t actually pay for the item with cash and if that is the case I just keep a mental note or on paper tally of what has been spent so I know where we are at.Our allowances have everything to do with budget and nothing to do with it being secret and buying this way so the other one doesn’t know about the price or the type item like some couples do. It seems to be working pretty well for us. Like you guys I’m the saver and he’s the spender (well spends more then I do) and I think it brings a nice balance.
March 24, 2011 at 8:18 AM
I take it back– I’ve read that GRS article so I totally could have stolen the title, probably subconsciously. Oops!
March 24, 2011 at 8:57 AM
Ha! And I just thought you were inspired by the GRS title. Regardless, I liked your discussion on the topic. :)
March 24, 2011 at 6:33 PM
Riiiiight… inspired!
Thanks!
March 24, 2011 at 9:09 AM
My husband gets money transferred to his account on paydays. For myself, since I am the one that tracks spending, I just leave my money in the joint checking and deduct as a buy things here and there or sometimes I will take cash out. I also find going to an ATM tedious, I don’t judge. I don’t really spend a whole lot though so I almost always have cash on me or don’t use my entire allowance.
March 24, 2011 at 11:55 AM
I’m 35 and have an American Express card for Teenagers… Preload my allowance for the month and away I go. I might have to change to the unmentioned bank.
March 24, 2011 at 2:54 PM
I go to the ATM at the end of every work week and withdraw $200. We each get 100 bucks to spend.
I usually don’t spend all that money and have an envelop to keep the left over. This is my piggy bank.
If I want to purchase something big – like the Sigma lens I got in January, I save up my piggy bank.
I got the lens from Amazon and I transfer the money from my piggy bank to the “home bank” envelop.
Once the home bank has over $200, then I just get $200 from there at the end of the week instead of going to the ATM.
Yeah, it’s a bit complicated, but it works for us. ;)
March 24, 2011 at 6:16 PM
That actually sounds less complicated than what I had imagined. Makes perfect sense to me. Thanks for sharing your method!
March 24, 2011 at 4:32 PM
giiiirrrrl …we need to talk. haha.
I am the saver, my husband is the spender. We tried to do the fun money account for my husband and it failed, HARD CORE. I’m thinking we’ll try it again in the future, but I LOVE the idea of preloaded atm cards. I’m actually going to look into it this weekend!
March 24, 2011 at 6:19 PM
We’ve definitely had our fair share of false starts when it comes to budgets too. Hang in there!
March 24, 2011 at 5:15 PM
Just because they say the cards are FOR teenagers, doesn’t mean they’re LIMITED to teenagers. I think a lot of banks promote them as a good way to provide allowances and spending money to teens and college students because so much of what kids do now is online – from ordering books to iTunes to whatever.
But they will not restrict you from buying a pre-paid card just because you’re not a teenager. Don’t get hung up on the literalness of their sales pitch. :)
March 24, 2011 at 6:22 PM
@Craig and @kh – Thanks for clearing that up about prepaid credit cards not being restricted to teenagers. I figured as much, but it’s good to know first hand. Don’t they know they have a market for budgeting adults as well?
March 25, 2011 at 4:58 AM
I like the idea of giving yourself the leftover fun money – or even part of it. That’s makes it easier to spend based on values. If you want to eat rice and beans for a month to be able to afford a new TV or whatever, then that’s what you do and there’s no resentment over it.
March 25, 2011 at 6:50 AM
I save up my “allowance” and when I purchase anything online or in a bricks-n-mortar store, I use my debit (to accrue points). Then I pony up the cash to go back to the bank to repay the debit account. Agreed upon allowances save adults in relationships from the “what’d you buy that for?” conversations. gotta love that!
March 30, 2011 at 6:31 PM
My husband and I call it “nonjudgemental money”. We each get a set amount each week that is automatically transferred into two separate debit card accounts (one for him and one for me). We also set it up so that when I log into the bank online I can’t see his account and he can’t see mine. You can also leave it out on mint, that way it is truly free money that does not relate to budgeting. If I want to save up for an entire year to buy expensive leather boots I can. And I don’t have to be mad when my husband buys cigarettes and beer with family money.
Good Luck sorting it out!