Why we include personal allowances in our budget

When it comes to our budget, I run a fairly tight ship.

A lot of this has to do with my personality. I am a goal-driven person and that impacts the way I approach our finances. Most of the time, this is a good thing.

Other times, it’s can be a little problematic – especially when Jeff and I disagree on a financial matter.

This does not happen often and I am grateful for this because…well, who likes to disagree with their spouse?

That said, it’s not always a bad thing to disagree with your spouse – as long as you’re committed to seeing it through to a resolution. Disagreement can lead to discussion, and discussion can lead to stronger, better ideas.

For example, discussion over a disagreement was what led to the creation of a line that has made a huge difference in our budget: the personal allowance line.

What is our personal allowance line?

It is exactly what it sounds like, honestly: each week, our budget includes an personal allowance for both Jeff and I.

When we added this line to our budget, we were on opposite pay schedules, which meant we had money coming in every week. The original schedule saw us each receive $20/week, for a total of $80/month (most months). I included this line in the section of our budget designated for sinking funds.

Although sinking fund contributions are the first to go on weeks when the budget is tight, I avoid cutting from personal allowances when I can – and if I have to make a cut, I cut mine first.

Why did I add personal allowances to our budget?

When I started getting serious about paying back debt, our budget didn’t include allowances. Although I have never been a zero-based budgeter, our money went to three places: debt, savings and necessities.

I would say there wasn’t a lot of wiggle room, but that would be a lie.

There wasn’t any wiggle room.

For the most part, that was fine by me. Again, I go back to the whole goal-driven, Type-A personality thing; not having a lot of spending money didn’t bother me because I had goals and I was making progress toward achieving them.

This system worked for me.

It didn’t work as well for Jeff, though.

It’s been said that in most relationships, there is a saver and a spender. In our case, I am definitely the saver – but I don’t think I would call Jeff a spender, exactly.

He’s not a big shopper nor is he likely to blow money he doesn’t have on expensive items.

But he does like having a little spending money (who doesn’t?). The original money plan didn’t allow for that – so after a while, Jeff mentioned it to me.

I would like to say I embraced the idea enthusiastically but I…probably didn’t. I likely saw the ask as a roadblock to achieving my goals and wondered why Jeff couldn’t just get on the same page.

Not the most flattering assessment, but I’m being honest here.

Still, eventually I decided to give it a try and the personal allowance line was born.

A year later, I’m not ashamed to admit excluding it from the original plan was a huge mistake. I cannot imagine our budget without this line now.

How having a personal allowance keeps me motivated toward my goals

I won’t lie: I love the personal allowance.

It’s not a lot of money but I have found including this small $20 allowance has helped me in three very specific ways.

It helps me practice saving

Although I occasionally spend my $20, for the most part, I save it. This is not a new thing for me – I did this with the money I earned through babysitting and working in a grocery store when I was in high school.

It helps me practice delayed gratification

I often like to save my money for bigger purchases – and because the dollar value is low, that means waiting. This has been a good thing for me – it has made me a more thoughtful, less-impulsive shopper.

It helps me practice self care

And by that, I mean having a personal allowance means I am able to treat myself once in a while! Whether that’s by picking up a book or saving up my money to buy goodies at Sephora, the allowance line allows me to spend on things that don’t fit into our every day budget and enjoy the money I worked hard to earn.

The allowance line helps Jeff, too, by ensuring he has a little bit of cash available to him each week. I don’t track this money and I don’t tell him how to spend it. It’s his money and he can spend it on whatever he wants.

It’s not a perfect system (no system is) but I think, overall, it’s better than what we did before.

Final Thoughts

I resisted the idea of including personal allowances in our budget. Looking back, I am glad I listened and made the changes necessary to make it happen. Having a small amount of cash available to spend as I please each week helped me become more disciplined with my money in a few key ways – while also encouraging me to enjoy some of my hard earned cash along the way.

Do you budget for an allowance? Why or why not?