4/26/2012

Allowances



Do you have them?

When Jordan I merged our finances a couple years ago, we maintained our personal chequing accounts.  We thought that it would good to have some money available each month that we were only accountable to ourselves for – that we could spend without checking in with our partner.

For the last couple of months or so, Jordan has maintained that he would like to eliminate our allowances from the budget.  He had thought that in efforts to simplify things, and stop over using his credit card – this would be the best solution.  I’ve been…hesitant, but unable to really explain why.  I suppose, it was to uphold the original intent – to have money that we’re not accountable to each other for.

I had hinted in my last post – that once our debt was paid off again, Jordan and I would continue the allowance conversation to see where it took us – and that if my needs of family vacation/camping ect. were met – perhaps I didn’t need an allowance any longer. 

Since reading my last couple of posts, and Jordan and I continuing to make positive headway in the way we have our conversations – I asked him a question.  It was simple really, on our drive home from work.

“so, in November – when my aunts and mom come to town for our annual Christmas shopping trip – where will the money come from that I spend on myself?”  While I start on our Christmas shopping then (and we have a budget set up for that), I inevitably spend $200-$500 on myself.  This could be for clothes, undergarments, buying lunch or dinner – or all of the above.

Jordan then said…

“I’ve actually been thinking about this.  I don’t want to get rid of our allowances”

He went on to say that in one of our previous conversations, he had admitted to feeling like he couldn’t spend any of our joint money without checking in – so he winds up using his credit card for both personal and home purchases.  He hasn’t had that feeling since we started spending money according to the New Plan, but said that if we got rid of the allowances – then we’d be right back there.  Where we have to check in for personal expenses.

So – I asked.  If we don’t get rid of allowances and personal credit cards – how will we help you to not spend more money then you have by way of your credit card.  He said that he would still like to cancel it – as soon as the debt is paid off.  That way, he can just take out cash.  He still wants to be able to buy a video game or whatever using his ‘unchecked’ allowance.

That means - allowances are back on.

With that said, our conversation moved to new territory.  How much should our allowances be.  Way back when, when we set this system up – we had decided on $100/month.  It sounded good – but we didn’t have a real good reason for that number.  I thought I would through it out to all of you, to the couples that organize their finances jointly, but have allowances.

How do you do it?  How much do you get?
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12 comments:

  1. I'd be interested in hearing the responses as well. I want to do this once BF and I get married and join finances. I would think that you two would just agree on a number after working out the budget, fixed expenses, and amount you want to send to savings each month. $100 sounds like a good number, but if I had more money I'd like maybe $200 a month :) I would just try to save most of it.

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  2. For the first 2+ years of our budget, we did not have personal allowances. Our spending (outside of home improvements which came from our house account) had to come from either the $100 we allot to entertainment or the $100 we allot to all other expenses that don't fall under groceries, gas or kids' expenses.

    Then hubby felt he really wanted an allowance, so we worked it out so that we could each have $30/month for personal use. We started this back in January and personally I don't like it. It seems to be a license to spend money without accounting for it. I spend all of my $30 every month, and truthfully, it tends to go towards stuff that should just come out of our jar money. I asked hubby about stopping the allowances and he doesn't want to give his up.

    At this point I am going to give my allowance up, but he will still get his $30/month. I am fine with this arrangement because ultimately, if I WANT something, he basically makes me buy it for myself (because I rarely spend money on myself), and if I have a million excuses as to why I shouldn't spend any money on myself, HE will use his allowance to buy it for me.

    So, ultimately, I don't like personal allowances, and would rather just pool all the spending money and account for all expenses.

    Neither way is right or wrong... do what works for you. :)

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  3. We go the allowance route, although if either of us doesn't spend the allowance for the month it rolls over into savings. We actually opt for $50/week, which most months ends up being $200 each. Most months we have money left over, which is always a fun windfall, but the whole point is that we don't count on that money and we're absolutely free to spend it. If one of us wants to make a purchase that goes over the allowance then we sit down and talk about it - we figured if something was going to cost more than $200 then it's worth talking about!

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  4. We do allowances, but I think we are going to try to phase them out now that we're hoping to start a family in the very, very near future. They were great when we first moved all of our money into one account because they allowed us to ease into the "joint" budgeting a little bit (because we still had some money we didn't have to talk about). At this point though, they are becoming more of a PITA than anything (I'll actually probably blog about this in a month or so, I've been drafting a post).

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  5. I am not married and BF and I don't have joint accounts, but I like the idea of an allowance or a set amount that we each keep. I also think that if it's not spent in one month, that person should keep it. That way one can save for a big expense or just have the money for a rainy day/shopping spree. :) I definitely want my own checking/savings when we get married, as well as joint accounts, so this makes sense to me.

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  6. Once I fuse accounts with my GF, I expect having allowances would be the best route to go since we have different spending habits. My current budget for myself allows $100 for entertainment and $100 for eating out, I generally don't spend the entertainment portion and I come in under the eating out. So I think any number between $100 - $200 for allowances should work fine.

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  7. We don't really set allowances for eachother. Our accounts still are not combined (planning on doing this next month) and we have been married for 3 1/2 years. We just trust eachother and that we won't spend a ton. If it's a big purchase (we still haven't defined what that is) we will normally talk to eachother to see if we really need it.

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  8. When the BF and I both agree that when we are married and the finances are merged we should have 'allowances'. We have different personal interests and it doesn't make sense to talk about purchases that are specific to those interests. By putting an amount to how much we can spend each month, it helps us plan and control our spending in those areas. As for the amount. It's going to be dependent on how much we have left after we set our budget, savings, and investment plans.

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  9. I give myself an allowance of $100 per month, which does not cover eating out or regular bills like cell phone. I mostly spend it on yarn and books. :) if I don't use it it goes towards my current goal, but I also allow myself occasional bigger purchases as long as they fit in the budget.

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  10. I give myself an allowance of $100 per month, which does not cover eating out or regular bills like cell phone. I mostly spend it on yarn and books. :) if I don't use it it goes towards my current goal, but I also allow myself occasional bigger purchases as long as they fit in the budget.

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  11. We have allowances. We find it just works better for us. We are each allowed $100 a paycheck ($200 a month each). We tried doing less, but found we were dipping into credit cards or our joint account where bills and household expenses are paid for. And when we didn't budget allowances, we were going over budget and tapping into credit cards for little things we wanted. $200/month each really seems to work best to keep us from using credit cards.

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  12. Late reply, just started reading your blog.

    My DH and I have 4 kids and right now I'm a SAHM by needs. We get $15 each per paycheque(biweekly). I like having the allowance. Although I let mine accumulate as much as possible. My DH tend to spend his.

    The allowance is for hobbies ONLY. My DH is into paintballing, so whatever he spends on it has to come out of there. This helps with not throwing the household budget out of whack. Since we are now one income family, every penny is counted. Plus then he can spend it without feeling guilty that he will "steal" the grocery money

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