Tuesday, February 17, 2009

Mad Money For You?

While my husband and I were engaged, we attended counseling with our bishop, our ecclesiastical leader. He told us that managing finances can be stressful for a couple. And that to keep both people from harboring resentment on spending (or lack thereof), each should have their own bit of money every month. To spend or save however they like. Mad Money. And this system has worked pretty well for us. Even though my husband is a saver, and I'm a spender - he can't say anything about my little piece of the budget.

So my question to you is: how much discretionary income do you personally have every month? And on top of my primary question: Do you just spend however you want? Is your spouse always on you about your spendy ways? Do you live by a budget? Or are you a saver?

My husband and I each have $80 a month to spend on anything we want. That includes work lunches for him (we budgeted more money for him when he worked at a business lunch type of firm) and fun lunches out for me and my little boys. And anything else our little hearts desire. I have been saving mine for a new iPod Touch (which I am days away from ordering). But usually I'm pulling out that mad money for all the tempting things at Target and filling my tummy with delicious (and usually not-nutritious) treats!

We do have a budget item for clothing, so occasionally I can fob a purchase off to that category, but not often. Somehow my husband doesn't consider teal, strappy, wedge sandals as a necessary clothing purchase. I know, crazy.

But I see women around me spending hundreds on little luxuries, so I'm not sure how things are different for them than for me. Obviously it could be that they simply have higher incomes than me, but often I don't think so. Different priorities? Help me out here. What do you spend? And on what?


Jennie said...

My husband and I don't do this- but it sounds like a great idea.
Currently everything discretionary we spend is discussed- even a $20 purchase. It's not me spending hundreds on little luxuries!

Becky said...

I know lots of women who spend loads of money on nails, hair, waxing, make-up, etc. So you are right about that. I manage all of the finances at our house and have been trying to get into a set budget. Right now I have a $300 entertainment budget, which sounds like your mad money--but ours also includes piano lessons, postage, and some other miscellaneous purchases.

Robyn said...

Your bishop was a very wise man. When you have a set amount it staves off the willy nilly buying that some people fall into doing. I know a couple of women that have spent their poor husbands into second jobs.

We no longer have the kids around so our discretionary spending has become a little easier to manage, but still set amounts are the only way to go.

Anonymous said...

Some women spend on the credit card, I'm sure and some have higher incomes.

I'm more curious to know how people arrive to what their discretionary income is. Is this after investing in retirement? Are you trying to pay your mortgage down early?

Theoretically, our discretionary income should be much less. We should be investing a lot more than we do. We could be saving up for vacations and cottage ownership or just paying our house down. Instead I've been spending it. How much do we have every month? Maybe $2000-3000? I think we net about $8000 every month. Ish. It varies.

I've gotten way off course with managing our money lately because of depression, health problems and a host of other distractions. But the main reason is that we have enough every month that we don't have to budget. So, in the past, I would just buy what I wanted within reason (no thousand dollar purchases or anything) and if we didn't have enough to pay it off this month, it would be paid off the next month. But usually we had enough and never carried a credit card balance for more than a month. Then we built a house and had to buy appliances and all sorts of things and we accrued debt. And I started to not have the same idea about how much we had each month. I was living like I was before the debt.

Thankfully, it will be paid off in a few months.

What's my point...? Oh ya. Some people who are spending a lot on stuff maybe aren't investing enough, or paying off their house? Or buying food storage? Or...? And yes, some people just make more money.