Thursday, August 03, 2023

Thrifty Thursday #12 ~ Personal Allowances


My reusable shopping bag, made by my sweet friend, Tanya, sent all the way from Australia 

    When it comes to wants and wish lists, it can sometimes be difficult to figure out how to fit them into the budget.  After all, they aren't needs, so how do we justify unnecessary purchases when we are trying to save money and live frugally?

    A few years into our marriage, I came across the idea (I wish I could remember where!) of having a personal allowance factored into the budget.  That is, each spouse gets a certain amount of money each week or month to spend on whatever he or she wants, free of guilt or explanation.  The particular amount is figured after you have budgeted for bills, necessities, and savings, so there are no worries over whether your personal purchases are going to derail your savings efforts or cause a strain to your finances.  The amount can be the same each month/week, or it can fluctuate based on changes in income and expenses.  Colton and I have had months when we were able to have generous allowances and other months when we have had very small allowances.  Other times, we've simply had to do without one.  Most of the time, though, it stays about the same and at the beginning of each new month, we look forward to having a bit of "fun money" to spend however we want.

    This is a great way to reign in spending without feeling deprived of little treats.  Saving money is hard work and can lead to burnout if you never get to enjoy any pleasures at all.  On the flipside, for those of us who are naturally savers and are reluctant to let go of a dollar, this is our permission to spend!  We don't have to worry about whether or not our money could've been better spent elsewhere because "elsewhere" has already been budgeted for.

    One of the beautiful things about the personal allowance is that, even though it is a limit, it is also a freedom.  What you buy with your personal allowance doesn't have to make financial sense or even be frugal, as long as you stay within your amount.  For example, maybe your bookshelf is full of books you still haven't read *ahem* but you find one you've been wanting at the thrift store.  You can buy it, guilt free!  Or maybe you know it's way cheaper to make your coffee at home, but once a week you want to sit at the local café and enjoy a cup there.  Do it!  You get a break here.  Allowances can be spent on anything- special foods that don't fit into the grocery budget, clothes that aren't necessities, experiences, decor, etc.  Whatever you want!

    For Colton and I, this really changed our ability to save money and put us towards getting out of debt faster than anything else I had tried to do with our budget.  The personal allowance permits us to each get what we want without the other person questioning whether that purchase is really necessary.   Instead of looking at each other's purchases with a critical eye, we excitedly talk to each other about what we plan to buy with our allowance when the new month rolls around.

    Now for some of the "rules" and how Colton and I make it fun:

    If Colton works an overtime shift, we get a small bonus amount added to our allowance that month as an incentive for both of us to make it through the extra work load and time away from home.

    As with our other budget categories, anything that isn't spent gets rolled over to the next month.  We get to build our personal "account" up this way.

    If we want an item that costs more than our allowance, we have to save up over the months until we build up to the amount we need.  This is where you can budget your allowance if you want.  Set aside a certain amount each month to save, and the rest is your spending money.  I will be truthful here, though, and say that there have been exceptions made when a large purchase is found at a bargain price!  However, this is not the norm, and even the bargains have to be within our means.  Our bank account isn't bottomless, you know ;)

    Anything we buy with our personal allowance can be turned into a profit for that person to keep as their own.  For example, if I bought craft supplies and made a set of cards and sold them, I'd get to keep the profit.  Colton does a lot of Ebay shopping for his wish list.  Sometimes he will find what he wants but it will be sold as part of a lot.  If he wins the bid, he keeps the item he wants and resells the rest of the lot.  He has done this several times and made a nice profit for himself!

    Even though anything goes, both of us try our hardest to stretch even our personal allowances.  It's "our own" money, so we are careful to get the most out of it.  We have gotten pretty creative at times!

    Before I close, I do want to clarify something.  Colton is the head of our home and the sole money earner, which I respect.  He works very hard.  As such, he doesn't need my "permission" to buy anything, nor do I have the ability to limit him.  In reality, he can spend whatever he wants and I don't have room to criticize him about it (maybe I'll write more on that topic someday).  But, he allows me to set the budget as my own contribution to our finances, as he knows that is one of my strengths and talents.  We have set certain financial goals together, and he knows from experience that my budgeting tactics will get us there.  I've earned his trust over time, and he knows that whatever I have come up with is for the benefit and prosperity of our home.  I don't take that lightly!  Years of implementing the personal allowance has simply proven to work very well for us, so he goes along with it.  If he chose not to go along with it, I would just set a personal allowance for myself to keep myself accountable.  

   Do you think a personal allowance might work for you?


  1. We have had a personal allowance for maybe 30 years. Way back then it was a really small amount and now it is really not a large amount. I tend to squirrel mine away and Hubby spends his on tools. About every 6-8 weeks I hire the neighbor kids to do some outside chores for us and pay out of my allowance because I am not able to help with that anymore. It gives me great pleasure to be able to do that for my husband. I have saved up my money and bought big things that were several hundred dollars and that is the fun spending for me.

    I agree 100% with your last paragraph but oh my goodness some family's finances have been destroyed by spendthrift husbands. I am so glad Hubby and I are on the same page about the budget.

    1. I tend to squirrel my money away too. My amount is not large, so want to make sure I'm extra careful in putting it towards something I truly want!
      It really is a blessing to be on the same page as your husband. It was not always the case with me and Colton. It took a change in MY attitude towards his spending before he came around to my frugal ways. Now he's *almost* as thrifty as me. 😉

  2. This is a wonderful idea...and you explained it so well. Thanks for sharing.

  3. This is such a great addition to the frugal journey. My sister and her husband do this and it works well for them. It definitely gives me a mental boost to be able to buy something that I want instead of only paying bills and buying necessities. Great blog post!

    1. Thanks, Belinda! I agree- getting a little treat here and there helps to keep me going too.


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