Why I Give Myself a Spending Allowance — Even Though I Save Money Every Month

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I remember the first job I ever had. I was around 12 years old and a friend of my parents had finally agreed to let me start babysitting regularly. I don’t remember how much I earned at the time, but I’m sure it wasn’t a lot. But I also remember that the bulk of my money would always go into my savings account, and that I’d retain just a small percentage to spend on things like books, music, or whatever my pre-teen self desired.

Fast forward a bunch of years, and I can’t pretend that I save the bulk of my earnings these days. That’s because I have a mortgage to pay, children to feed, and a host of other expenses that come with being an adult.

Still, I do manage to save some money each month. Because my income is variable, that amount tends to fluctuate. But generally speaking, I contribute money to my retirement account on a monthly basis, and I often add money to my brokerage account that I then invest. Also, during months when my income increases, I’m pretty good about padding my vacation fund and my other goal-specific accounts.

In fact, all told, it’s fair to say that I’m pretty vigilant about saving money. But in spite of that, I still give myself a limited spending allowance each month. Here’s why.

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It’s all about priorities and fairness

It’s not just me and my income that carries our family. My husband is a big contributor, too. In fact, we think of ourselves as partners. We both work so we can pay the bills, and we both do our part to help out around the house. (He’s the one who always fixes things, I tend to put myself on perpetual laundry duty, and we generally split the cooking.)

My husband and I definitely agree that saving money is important. But we differ on how much to save.

Generally speaking, my husband thinks we can afford to save less and enjoy more of our earnings. I feel that we should keep trying to save at our current level, and while I agree that we could spend more of our earnings, I also feel we’re not really deprived of anything that would greatly enhance our quality of life.

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My husband and I also have different priorities when it comes to spending money. While we both tend to value experiences over stuff, he’s a lot more into the stuff than I am. As a tech person, he loves gadgets and would buy every new electronic device that came out if I gave him the green light.

I, on the other hand, am not really a fan of stuff. I have no problem spending money on a concert or a great meal, but you generally won’t catch me paying more than $5 or so for a T-shirt, and that’s only if I really need to replace an old one.

Because our spending styles and opinions on savings differ, my husband and I each get a monthly spending allowance. And that’s money we can use for whatever purpose we want, no questions asked. If my husband wants to buy yet another electronic item I can’t even identify, that’s his call. And if I want to spend my money on gourmet ice cream or candy, that’s my choice.

Having our respective spending allowances helps me and my husband avoid fighting over money. But it also helps keep our spending in check.

After all, there really is a limit as to how many new gadgets a person needs. And I can admit that there’s a limit as to how much fancy chocolate a person should consume before it becomes unacceptable from both a money and a health perspective. Having those spending allowances prevents us from going overboard, and so I intend to keep mine in place, even if I’m able to boost my monthly savings rate beyond where it is today.

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