My wife and I give ourselves an individual, guilt-free spending allowance as part of allocating the funds of each paycheck.
Before we combined our finances, my only strategy was to save as much money as possible. So, I didn’t have any sort of entertainment budget. There were times I missed out on trips or nights out with friends, and I didn’t pursue hobbies that gave me joy, but seemed like they could get expensive. And if I did spend anything, I also spent a lot of mental energy on guilt after the fact.
When talking through how we would combine our finances, my wife insisted on having “no-guilt spending money.” She did this because she already knew me well enough to know that I am an anxious person who is fearful when making purchases, and that I deal with a lot of guilt after actually buying things.
What this money is:
- A regular amount in our budget that is allotted every two weeks.
- An amount that we can afford while still pursuing our goals.
- Money to cover individual pursuits, like catching the new X-Men movie with a friend.
- Money to be spent. Not hoarded.
What this money is not:
- Meant to cover what we agreed are joint expenses, like groceries—even if I want Pop-Tarts, or my wife wants fancy cheese.
- Money to be invested for the future.
- Something to stress over.
This has been an extremely helpful strategy in alleviating guilt related to spending.
What does it get spent on?
I have made an effort to use this money on spending time with friends and family.
Instead of worrying about the fact that I already brought my lunch with me, if a friend calls me up for lunch, I go to lunch.
I saved up for a few months last year and used this money to fund a trip out to Austin to visit good friends.
I also use this money to practice being a little more generous.
Before this strategy, buying gifts was a hard balance for me. I had to watch myself that I wasn’t picking out something in a lower price range just because I’m cheap. If the right gift costs a little more, it’s okay.
Also, bourbon. This money gets spent on good bourbon.
It reduces my anxiety. This is the obvious one. When I grab a cup of coffee, the allowance is doing what it’s supposed to do. The money is allocated to be spent—other dollars are paying bills, or being invested in our future. It helps me leave the past in the past.
It keeps me from worrying about my wife’s small purchases. I’m not worried what she spends her no-guilt money on. That’s her money, and beyond that, the purpose of the money is to be spent.
We stay focused with the remainder of our income. By setting aside the money that only exists to be spent, we can focus on whether the remaining money is moving us to our financial goals. We don’t have to obsess about every purchase, which frees us up to keep a careful eye on those dollars and whether they are working for us. Also, if there’s something one of us wants, our first instinct isn’t to look at our joint income as the funding source, so the pace at which we meet our goals isn’t affected by discretionary splurges .
I’m doing more of the things I want to do. I spend more time with friends. I’m not afraid to try out new things because of the potential costs. I still research my purchases and use free alternatives (like a library) when I can, but now I feel excited about pulling the trigger on something that I’ve had my eye on, even if it’s as small as a comic book. Instead of hoarding all of my money for the future, I’m spending some of it now.
What’s the right amount?
One question you can ask yourself: What can you afford while still making progress toward your goals, at a pace that makes you happy?
Honestly, the amount of money doesn’t really matter. If you often find yourself feeling guilty over small purchases, trying this with even a few dollars a week can make a big difference.
One piece of advice that I’d give, if you’re thinking about this exercise, is to choose something that really seems like it improves your life; don’t just spend money to say that you spent it. You could choose to pursue a new experience, or a long-time hobby. I choose to spend some of this money to invest in my friendships.
But no matter what you spend it on, the point is to not feel guilty.