One of the major keys to a good personal financial plan is commitment. If you aren’t committed and dedicated to achieving your goal, you will likely fail.
But sometimes it’s hard to stay committed. A frugal lifestyle is difficult to maintain, especially if you are new to it. You know what you need to do to keep your budgets, but the pain is too distracting. You’re used to buying whatever you wanted and spending your money in a certain way.
One way to alleviate this pain is to regress to a child-like state and give yourself an allowance. Whether you give yourself a stable weekly sum or if you tie it into household chores is up to you, but make sure to give you enough “you” money to keep you happy, but not so much that you break your budget.
This money is outside of all budgets and higher-level earmarking – this money is yours. You can do whatever you want with this sum of money. If you want to have a date night, use the money to buy some movie tickets and popcorn. If you want a new gadget, save for a while and buy it guilt-free. You’re even free to give it back to your budgets or savings. It’s your money – do with it whatever makes you happy!
But even having a personal allowance takes discipline. While that money is yours, the rest of it still belongs to your budget. You’re free to spend your allowance however you want, but don’t go dipping into your general fund to pay for your splurges. That kind of behavior will only throw you further off-course.
Frugal living isn’t necessarily the easiest lifestyle to maintain, but the rewards can be enormous. The important thing is to do whatever you have to to reach your goals. If achieving that requires a bandaid such as this occasionally, that’s is quite alright!
Now, I’m off to think about how to spend my allowance this weekend. I think this would be a great week for a movie!
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Totally agree…this concept is absolutely critical for a successful budget! Before we had a budget, my wife used to hassle me over how much I ate out for lunch, the soda I bought during work, etc. In her defense, we weren’t tracking our money and all she knew was that we never seemed to have enough money and I was spending “like crazy” (in her mind). In the same way, I gave her a hard time about spending $45 to get her nails done or coffee with friends “all the time”.
Once we had a budget, we created two “Fun Money” accounts. Even with just $50, I can’t tell you how FREEING it is to be able to spend money whenever I want, not have to account for it, and not have to hear my wife complain about it. It has completely changed our relationship, not to mention the fact that we both buy frivolous things much less since it’s OUR money it’s coming out of ;-)
This is a great concept that has worked well for my wife and I. We get $80 each per month to do whatever we want to with. Doing this has brought our MISC fund way down!
I think this is a good method for some folks. Personally, I save, invest, and pay for major expenses upfront. What left over is mine to play with. Just a slightly different approach.
Great idea and a good way to live a bit. It’s fun to spend at times with no strings attached. I take more of Pinyo’s approach (previous comment). I save, invest and then spend what’s left. Sometimes I even use the extra money to make those high risk investments like options trading which I recently started. Or I just pick my favourite cause and donate some money every month.
We’ve recently changed our budget around, putting a certain percentage to all household/saving/retirement stuff. The rest is ours to do what we want with- play, date night, save for a splurge, etc.