What is your opinion on having an allowance?
You should each have some money that you can spend without jusitifcation or tracking.
For the last 6-8 months we have tried each getting $100 per paycheck as our allowance for anything we might want to buy. I find that mostly I didn't need anything close to $100 and I used most of mine to buy gas for the cars, however every few months I find myself wanting to buy something that costs several hundred dollars for one of my hobbies, I would research it for a month or so then just buy it rationalizing that I hadn't spent my $100 in a few months anyways so I was probably due it.
Actually, there are TWO problems with this scenario:
1) You buy something for "several hundred dollars" impulsively even though you already spent the money (and no, researching for a month or so does not mean it wasn't an impulsive purchase. It means it was a RESEARCHED purchase.
) If you don't have the cash to buy it, you can't afford it.
2) You are apparently not budgeting for gas. You should be able to predict, with reasonable accuracy, your gas needs. So spending your "allowance" on gas is silly, most especially because you seem to use spending on NEEDS as a justification for later spending money on WANTS. This is not a 1-for-1 deal - you don't DESERVE some hobby items just because you spent cash on gas the past 3 months...once the money is gpne, it's GONE - you shouldn't be spending it twice! (remember what I said in the last thread - I suspected you were spending your available money on wants, and then running out of $$, so you then were charging needs? Guess what? You should be spending the money on needs first, and if you don't have money IN HAND for the wants...you DON'T FRIGGIN BUY IT!)
Problem with that of course is since I didn't take my $100 and actually put it away, when I spent that money later I didn't have it and that is one reason we go behind. My wife started out not being able to have $100 cover what she wanted for each paycheck and then just borrowing it from the household, but throughout the last few months she has been trimming different things that were taking her $100.
So she should have some idea of where she's most likely to spend. And she can probably map it out. For me, it would be a haircut every 10 weeks, a mani/pedi every 6 weeks, and a massage 2x per year. She probably shops recreationally. Here's an idea - don't go to the mall. If you stay away and refuse to shop online, you can really save a lot of $$.
Simply having an individual allowance doesn't mean that you don't discuss $$, either. Are you writing down your budget yet? Have you even attempted it? Has she seen it and commented? You can't row this boat with only one oar - she's got to be on board as well.
At this point my wife wants me to start taking $40-$60 (she hasn't decided on the exact amount yet) of her regular $100 and put it on one of the credit cards (but she wants proof I paid that over and above a minimum balance
So, in a budget, this would be minimum payment + $40 on your credit card, and $60 to her for cash. Once it's written down, it's easier to stick to, and harder to change.
I have decided all my hobbies are being put away until at least the new year.
Good idea. You're digging the hole deeper otherwise.
I am thinking about taking $40 of the $100 I am supposed to get and put it into my savings account so if I do get the urge to buy something I can only get it if I have the money saved already.
Yep, it's called saving for a purpose. Good call.
I might do the same as my wife and take the other 60 and put it towards a credit card over and above the minimum.
Dont' go too crazy right off the bat - if you set unrealistic goals, and fail, you're more likely to throw up your hands, walk away, and declare it can't be done. It CAN be done. But improve one area per month, and set the new habits in stone. Goals might be:
1) Stick to cash only for discretionary spending
2) When you get extra $$ (bday gift, rebate, evening extra work, sell something) what will you do with it? Have a plan in place. If I were in your shoes, I'd throw it at the debt, to get rid of it ASAP.
3) WRITE OUT A BUDGET. Go over it with your wife.
4) Stop shopping recreationally.
5) Track your spending, and compare to your budget at least 1x per week.
If you take each of the above items, and devote a month to integrating it into your financial life, that will get you to January 2010. Do you want to be looking back from then, admiring your progress? Or still befuddled and baffled about how you are still in the same old debt as you were last year?