It’s been over a month now since I started giving myself $50/month as an allowance, so I thought I would share how it has been going for me.
I have been giving myself $50 cash each month to be spent as I like and I haven’t tracked the individual purchases I’ve made with the money, and it rolls over to the next month.
The pros for me have been that I have felt more free to make purchases and spend money within the parameters of the allowance. This is a good thing for me as I can indulge in little treats without worrying about writing it down in my budgeting book. My stress level about money has gone way down. It’s also a relatively small amount of money every month, so it’s not going to make me go broke.
The downside is that, since I don’t know where the money has actually been spent, I have lost data about my spending history, which I think is detrimental for me over the long term. For example, I had lunch out with friends on Saturday and spent $10. But this isn’t written down anywhere, so as soon as I forget, there won’t be any record of it left. I’m slightly worried this could lead to inaccuracies when making future budgets.
Thus far the positives far outweigh the negatives for me. There may come a time when I want to do away with it, but I think I’m going to keep it for now.
I am going to change where the money comes from though. I was pulling from my miscellaneous category every month just because I didn’t really know where else to get it from. After seeing what I have been spending the money on, it is almost entirely eating out and movie tickets and other stuff that is most definitely entertainment. So I’m just going to pull it from that category instead. It just makes sense, right?
As with all other aspects of my budgeting, I’m going to keep checking in with myself regularly to make sure it is working for me.