I have an allowance
Each month, my husband and I get an allowance. I don’t pull it out in cash, it just gets calculated on a spread sheet, but its there. One of the hard things for people- especially couples – who use an allowance system is determining what comes out of the allowance and what doesn’t. Like any of the decisions people make about their personal finances, I’m not certain that there is a right or wrong answer. There just has to be an understanding of what it means.
In our case, when we went to the allowance system, we talked about what we expected it to cover when we talked about how much we would each get. That’s right, we get different amounts. I get $50 more per month than he does. This is not because I’m the sole earner, but because I have a professional appearance (well, business casual) that I need to maintain.
Here’s a basic list of what comes out of our allowances:
Movies
New clothes
Haircuts & other personal grooming
Books
Domain registration fees (we each have our own domain)
Individual eating out
Video games/subscription fees
Here are a couple things that don’t come out of our allowances:
Eating out together (this has its own line item)
Netflix subscription (treated like a monthly bill)
But sometimes things come up that aren’t quite clear. And in those cases, we discuss. For example, I am considering joining a professional organization for my field. The husband does not believe that the fees for joining or taking their certification tests should come out of my allowance. His reasoning behind that is that this is something I am doing for professional development, kind of like going to school, and shouldn’t cut into my spending money.
On the same theory, if he ever goes back in to the work force, he will likely need a new wardrobe. Having been unemployed (now a student) for 2+ years and before that working for a company where jeans and t-shirts were the norm, he pretty much as one nice interview outfit. If he were to get a job in a business casual or business environment, he would need a whole new wardrobe, not just a piece here and there to replace old items. In that case, we would set a budget completely separate from his allowance to spend on new clothes. If he went over that amount, then it would come out of allowance.
The same would go for me if I were to move out of business casual into a business/professional environment.
However, I also run a weekly/monthly micro-fiction contest. The money for that domain and the prizes I give out comes from my allowance. I have edited and published one vanity micro-fiction book and hope to be doing another one in the near future. Costs for that will also come out of my allowance.
My reasoning for that is that while I would love to make enough money off my writing to pay the bills, I don’t. In fact, it costs us money. Since this is my hobby, much the way video games are his hobby, it comes out of allowance.
In the end, our determination of what is allowance and what isn’t comes from the determination of whether or not something is for the good of the whole family (there are only two of us, but still) or just one person.
Its not a perfect system by any means, but that’s okay, because the important part is that it is always up for discussion.
Do you use an allowance system? How do you decide if something comes from your allowance or another part of the budget?
Hmm, we never have used an allowance system as a married couple. That is probably because there was never enough money left over to spend on personal items when we first married. Even haircuts were home done!We have an understanding that we consult each other on large purchases and have grown to trust each other's fiscal responsibility over the years.
We didn't use to have an allowance, but after our 9 months of not being able to spend $5 on ourselves, we got to the point where we had a little money left over. The husband suggested the allowance system so that he would know what he could spend (I handle all the budgeting) without creating a problem. It also lets him "save up" to buy big things – like anniversary gifts for me.
We have an allowance, even if at times it has only been $10. Our budget varies paycheck to paycheck due to my husband working primarily on commission. Sometimes haircuts, running shoes, eating out, etc. are in the budget sometimes they are not. Our fun money is used for anything we "want" that is NOT in the budget. It's a line in the budget that reads fun money and is accounted for. There is freedom in not having to account for how it is spent because it already accounted for!
Our allowance is very similar to anotherhousewife's. We've had as little as $10 a month for each of us and as high as $50 a month, depending on how much disposable income we have. We pretty much use it for personal wants that aren't for the whole family.
I agree with your reasoning that your book would be considered a hobby at this point in time.We look at personal finance very differently however. Here is my reasoning. How many hours a month do you think you put into spread sheets and calculating very specifically where money is spent? What if you worked at something you really loved and had a passion for during those hours instead? Do you think you would make more than enough money to offset whatever you are saving through intense budgeting? My significant other and I are very minimilast people by nature, so maybe this is why the strategy worked for us.