discretionary spending http://www.wisebread.com/taxonomy/term/13777/all en-US Chore Time: Allowances for Adults http://www.wisebread.com/chore-time-allowances-for-adults <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/chore-time-allowances-for-adults" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://www.wisebread.com/files/fruganomics/imagecache/250w/blog-images/2158620794_24f218d329_z.jpg" alt="washing dishes" title="washing dishes" class="imagecache imagecache-250w" width="250" height="188" /></a> </div> </div> </div> <p>The concept of an allowance has been around for decades, usually as a means to motivate kids to do their chores without complaining or forgetting altogether. Although allowances are commonly used for children, they can also be applied to adults. (See also: <a href="http://www.wisebread.com/five-jobs-for-children">Five &quot;Jobs&quot; for Children</a>)</p> <h2>&ldquo;Pay Yourself First&rdquo;</h2> <p>As the old adage goes, you need to <a href="http://www.wisebread.com/pay-yourself-first-what-it-means-and-how-to-do-it">pay yourself first</a>. And this doesn&rsquo;t just mean allocating your biweekly or monthly income in a budget spreadsheet to account for expenses; you need some cash for non-necessities too. This is what your &ldquo;allowance&rdquo; is for. It can either be a fixed amount (say, 10% of your income for a given pay period) or it can fluctuate based on how much of an income surplus you have beyond your budget for necessities.</p> <p>What you choose to do with your allowance is entirely up to you. Just like how some kids prefer to save up their allowance for an expensive toy or gaming system, you can choose to sock your own allowance away in a savings account for something such as a new car or down payment on a house. Or, like the kids who blow their entire allowance on movies, candy, games, etc. every week, you can put this money towards drinking nights with friends or a day at the spa (basically anything you haven&rsquo;t accounted for in a short-term fixed budget).</p> <p>There&rsquo;s no right way to go about managing your allowance, but it is a crucial remedy to the monotony of living on a strict budget.</p> <h2>A Rewards System for Housework</h2> <p>So, how do you go about setting up an allowance system for the adults in your family?</p> <p>First off, this goes both ways for spouses &mdash; each one receives a monetary reward for work completed around the house (for single-income families with a stay-at-home spouse/parent, this method might need some modifying). With kids&rsquo; allowances, they receive money based on work they do around the house. Likewise, you can build a system of monetary rewards using housework (vacuuming, washing the dishes, etc.) and yard work (mowing the lawn, cleaning the pool, etc.) as the means for increasing your own allowance.</p> <p>There are also consequences in this set-up. For example, if hubby forgets to do the dishes a few nights, then he receives a reduction in his &quot;allowance&quot; that would&rsquo;ve been used for <a href="http://www.wisebread.com/4-ways-to-save-money-at-the-bars">going drinking</a> with the buddies that weekend. The rewards/penalties will vary from family to family, but the concept of allowances themselves ensures that everyone does their share of work and receives a fair stipend of &quot;fun money&quot; in return.</p> <p>The allowance system won&rsquo;t work for everyone, but it is a simple way to set aside funds for non-budgetary needs. It is also helpful in tracking just how much you (and your partner or spouse) are <a href="http://www.wisebread.com/easy-ways-to-rein-in-your-spending-without-sacrificing-fun">spending on entertainment</a> each month.</p> <p><em> What about you? Any fresh ideas on keeping your non-necessity expenses in check? Tell us in the comments below.</em></p> <a href="http://www.wisebread.com/chore-time-allowances-for-adults" class="sharethis-link" title="Chore Time: Allowances for Adults" rel="nofollow">ShareThis</a><br /><div id="custom_wisebread_footer"><div id="rss_tagline">Written by <a href="http://www.wisebread.com/kelly-kehoe">Kelly Kehoe</a> and published on <a href="http://www.wisebread.com/">Wise Bread</a>. Read more <a href="http://www.wisebread.com/taxonomy/term/"> articles from Wise Bread</a>.</div></div> Budgeting Home Lifestyle allowances chores discretionary spending Wed, 27 Jun 2012 09:48:19 +0000 Kelly Kehoe 935838 at http://www.wisebread.com How to Spend Less Without Starting a Budget http://www.wisebread.com/how-to-spend-less-without-starting-a-budget <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-to-spend-less-without-starting-a-budget" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://www.wisebread.com/files/fruganomics/imagecache/250w/blog-images/bigstock_African_American_Woman_looking_19159844-2.jpg" alt="Woman with piggy bank" title="Woman with piggy bank" class="imagecache imagecache-250w" width="250" height="146" /></a> </div> </div> </div> <p>Some of the most common advice for helping someone spend less is to start a budget, but this approach doesn't always work. (See also: <a href="http://www.wisebread.com/the-first-step-to-budgeting">The First Step to Budgeting</a>)</p> <p>With a budget, it's easy to get used to how much money you spend because you are so accustomed to seeing the total on a monthly basis. Instead of helping you spend less, you are actually training yourself that your current level of spending is necessary. Then there's the problem of actually doing the work. Many people who have budgets often forget to add up a receipt here and a receipt there, which makes the whole budget unreliable.</p> <p>And in reality, having a budget doesn't automatically help you spend less anyway. Some people feel that as long as they see what they are spending money on, they will stop. This is just a pipe dream. It sounds obvious, but unless you take the effort to spend less on a particular habit &mdash; something you can do without a budget &mdash; your spending won't go down.</p> <p>Try these tips to lower your spending without starting a budget.</p> <h3>Start From Scratch</h3> <p>This isn't easy for some people, as you can imagine, but eliminating almost all of your expenses and starting from scratch will help. What I mean is to treat every bill, every meal out, and all your automatic payments as expenses that you truly cannot afford. Once you scrutinize every detail of what you pay, you will find that part of your spending is on things you don't really care about, and you can start reducing.</p> <h3>Pay Yourself First, and Pretend You Have Less</h3> <p>The fastest way to spend less is to have less. When you have less to spend money with, you will find a way to survive. We obviously don't want to voluntarily decrease our income, so the closest thing we can do is pay ourselves first and then pretend we have less. That's why we should schedule our deposits to our <a href="http://www.wisebread.com/retirement-accounts-and-money-to-spend">retirement accounts</a> the day we get our paychecks and to increase our savings amount every time we get a raise. If we don't get a chance to use it, we probably won't.</p> <h3>Pay Off Debt</h3> <p>Another way to lower your spending is to think of ways to work on your debt payments. From refinancing to moving debt around to lower your interest rate, there are many ways to reduce your debt in order to lower your monthly obligations. Don't forget about this side of the equation, because spending some time here can reap huge rewards.</p> <p>Having a budget is good only if you have the discipline to keep up. As with everything else in life, there are more than one way to skin a cat.</p> <a href="http://www.wisebread.com/how-to-spend-less-without-starting-a-budget" class="sharethis-link" title="How to Spend Less Without Starting a Budget" rel="nofollow">ShareThis</a><br /><div id="custom_wisebread_footer"><div id="rss_tagline">Written by <a href="http://www.wisebread.com/david-ning">David Ning</a> and published on <a href="http://www.wisebread.com/">Wise Bread</a>. Read more <a href="http://www.wisebread.com/taxonomy/term/"> articles from Wise Bread</a>.</div></div> Budgeting Debt Management discretionary spending pay yourself first spending less Tue, 15 Nov 2011 11:24:48 +0000 David Ning 782412 at http://www.wisebread.com The Limits to Just Not Buying http://www.wisebread.com/the-limits-to-just-not-buying <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/the-limits-to-just-not-buying" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://www.wisebread.com/files/fruganomics/imagecache/250w/blog-images/piggy-bank-yearns-for-the-far-shore-cr.jpg" alt="Piggy Bank Yearns for a Distant Shore" title="Piggy Bank Yearns for a Distant Shore" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>My first reaction to financial stress has always been to just stop buying stuff. Obviously, some expenses can't be eliminated, but a lot of expenses are discretionary &mdash; on a temporary basis you can eliminate whole categories. Do not miss that very important key word, temporary. (See also: <a href="http://www.wisebread.com/emergency-belt-tightening">Emergency Belt-Tightening</a>)</p> <p>My initial model for this came from my parents. Whenever money got a little tight when I was a kid, my dad would quit spending money. Since my mom bought the groceries and paid the bills, the result was that our fixed expenses continued to be paid while discretionary expenses dropped to zero. I only had limited insight into the household finances, but I could see that the strategy worked. The necessities were covered; the luxuries got deferred.</p> <p>When I grew up, I didn't stick with the gender role division, but the general strategy remained intact. In my case, money has been a little tight now for going on four years &mdash; ever since my former employer closed the site where I'd been working, and I became a full-time writer. My wife and I made modest changes to our fixed expenses &mdash; dropping our landline, swapping out the last of our incandescent bulbs. But our big economization was a huge drop in discretionary spending &mdash; we quit buying stuff.</p> <p>Our entertainment budget was cut to a single line item (Netflix). Our grocery spending shifted toward the low-cost end. We just about quit buying clothes or shoes or books or CDs. During the transition we did some traveling, but that too has fallen by the wayside. We even started buying cheap booze (although not <em>only</em> cheap booze).</p> <p>The result was just about what you'd expect &mdash; a sharp and sustained drop in our cost of living. And it was made without a big drop in our standard of living. We didn't buy much in the way of new clothes, but we had plenty of clothes. We got books from the library. We ate out less, but we cooked great meals at home. We do know the line between <a href="http://www.wisebread.com/the-line-between-frugal-and-crazy">frugal and crazy</a>.</p> <p>This drop in our cost of living was <em>sustained;</em> it wasn't <em>permanent</em>. As we approach four years of this, we've started to reach some limits. Our car, which has given us 21 years of trouble-free operation, is showing signs that it won't last forever. I've had to replace two computers. One pair of shoes has worn out, and I can see that two or three other pairs aren't going to last much longer.</p> <p>So, I offer this as a data point. I'm sure the results would be very different for families with children. But in our experience, as a household with two adults, the length of time that we could go on a buying fast turns out to be three or four years. And it's a genuine three or four years &mdash; we don't have a huge backlog of necessary expenses that have been on hold and are now becoming urgent.</p> <p>That's not forever, but it's a really long time. There are limits to just not buying stuff, but it's still a solid way to improve your household finances. Some expenses can't eliminated, but a lot of expenses are discretionary. On a temporary basis, you can eliminate whole categories.</p> <a href="http://www.wisebread.com/the-limits-to-just-not-buying" class="sharethis-link" title="The Limits to Just Not Buying " rel="nofollow">ShareThis</a><br /><div id="custom_wisebread_footer"><div id="rss_tagline">Written by <a href="http://www.wisebread.com/philip-brewer">Philip Brewer</a> and published on <a href="http://www.wisebread.com/">Wise Bread</a>. Read more <a href="http://www.wisebread.com/topic/frugal-living/budgeting">Budgeting articles from Wise Bread</a>.</div></div> Budgeting Lifestyle Shopping balanced spending changing habits discretionary spending Wed, 27 Apr 2011 10:36:25 +0000 Philip Brewer 531647 at http://www.wisebread.com