A blog about spending wisely in your twenties, with advice on everything from cooking to saving money on gas; how to teach yourself to save money instead of spending it, traveling without breaking the bank, and much more.

Friday, May 30, 2008

Giving Myself an Allowance

I use an outdated copy of Microsoft Money to track my finances. It generates a lot of reports for me including a cashflow projector (which I use instead of a typical budget) and some really great spending reports. Month-end is almost here again so I've been poring over my reports. Out of curiosity I filtered out all unnecessary spending categories, just to see how much money I'd have saved over the course of three months if I could manage to radically cut my spending.


In THREE months. Mind you, that's after rent, bills, food, and gas. AFTER. I've known for a while now that if I could just figure out how to cut out frivolous spending and impulse buys, I'd be quite well off. I spend less than most of my peers, and I definitely save more than a lot of them, but I could be doing a lot better. I need to be doing a lot better.

More than once I've been told that I shouldn't fuss over every penny, and I do try not to get lost in the minutiae of every other little 3 cents. But I make about $1400 in a good month, so a certain amount of spending vigilance goes a long way for me.

Until I was about 16, I got an allowance of $7.50 every other week, which was enough to buy lunch at school. I could either pack a lunch, or pocket the money. I seem to recall having a fairly active social life and still having fun with my pocket change, so I'm going to attempt a grown-up version of the same.

Every paycheck, I'll get $20. I'm paid bi-weekly, so that $20 is my pocket money. If I blow it on beers at the bar, that's it until the next check. It will not roll over. If I have cash left over when my next paycheck comes, I'll only get enough cash to get the total back to $20. Except on days when I need to buy gas, I'll leave my debit and credit cards at home.

I already put away $125 or more a month, and if giving myself an allowance cuts my impulse spending the way I hope it will, I could potentially double, triple, or even quadruple that amount over the summer.


Catherine at Frugal Homemaker Plus said...

It's amazing how much those little expenses end up costing so much! I've been told not to worry about every penny, but that is the bulk of my unnecessary expenses. I like the latte factor idea- after all, how often do you spend 1000 dollars at one time without noticing? But a coffee here, lunch out there...it adds up! Great blog- I'll be back. :)

DerekL said...

You can overdo it you know. Are you working merely to see how a score you can rack up (as counted by dollars in the bank)? Or to make it possible to enjoy life?