Wednesday, July 22, 2020

Do This 1 Thing No Matter How Tight Your Budget Is

Look, I know we are in the middle of a pandemic and for millions of Americans, times are tough financially.  People are job searching, redoing their budgets, and cutting corners.  2020 is not a year many of us will miss when it finally packs its bags and leaves.

Years ago when my husband and I got married, my dad passed down some advice for budgeting.  He said, (paraphrasing here because it was nearly 2 decades ago): "Always have some money that you each get that isn't accountable to the other one."

You need to have spending money each month that is YOURS.  

Budget tip even when money is tight

Here are the rules:
  • The amount is agreed upon ahead of time and each person gets the same amount. It might be a minuscule amount. That's fine. Write it in the budget. 

  • You get your spending money. You spend it on whatever you want.  

  • The other person does not get to complain about what you bought with your spending money.

  • If you want to spend it all at Starbucks. Fine.  

  • If you want to save up your spending money for awhile and buy something big? Fine.

Why do we need spending money in our budget?

If you don't budget spending money for both you and your partner, you will either a) overspend, b) underspend, or c) be resentful of your partner.  

If money is super tight and your spouse comes home with a $5 frappe from Starbucks, you might be ticked.  

But if it came out of their spending money, then you can't get mad---it was their money and furthermore, you have YOUR money so if you want a frappe too, you can get one!

Having your own spending money allows each person to feel free to purchase something without feeling guilty for taking money from another budget category.

How much should we budget for spending money?

It depends greatly on your budget.  Generally we now do $50 each, each month.  Sometimes we do less if a big expense is coming up.  In the early years of marriage when money was really tight, we started with $5 a month and worked up to $10.

Can we use a credit card for our spending money?

Uhh.  It should really be cash so that once it's gone, it. is. gone.  If you must use a card (or order online), be sure to write down what you spent and keep track of how much you have left.  Do NOT go into debt for spending money.  If you can't afford more than $3 that month, then you only get $3!  

Why should I listen to you?

My husband and I aren't financial advisors, we're just people who've been married for a long time, rarely argue about money (you can count our money arguments on one hand), have been poor, have been not-poor, and have no debt except our reasonable mortgage.  

Plus, technically this advice came from my dad and he's the smartest person I know.  ;) 
1 thing you have to do even when money is tight

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