Everyone knows that its important to budget. You have heard it before. One of the classes required to graduate in my high school was “consumer ed.” In that class we learned about writing checks and checking accounts, as well as how to make a budget. As part of the class we even made a budget based for when we were in college (or rented our first apartment).
That was a great learning time for me. I was lucky to at least know how to make a budget at 17. My parents had to learn when they were in thier 30s.
One thing that I have learned, is that you need some flexability in your budget. In my current budget, we have labled this the Save/SPLURGE category. It can either be saved for some unnecessary toy or gadget we want, or it can just be an extra we want. Either way, this money is not rolled over into the following month. Its withdrawn from the bank and used as cash.
For example: Our eating out budget is $50/mo. (We rarely eat out.) Now this would normally be plenty for us, and we might even have extra. Now, say this month we have family in town and decide to take them out to dinner. $50 for two at a restaurant in our area is plenty most of the time. $50 for four? Possibly, but it would be close, and what about gratuity? Now, if our bill with tip was $80, we would use the 50 from eating out, and the 30 from our mad money.
Now, you may not have the flexability to have $30 in your splurge category, but vven $5 will get two ice cream cones.
I had a friend in college that had a cute little ceramic jar with Mad Money written on the front. She used cash for most day to day purchases because she was a waitress and got tips. Every day she worked she would put a little bit of money into the mad money jar. If she wanted to go to the movies she would grab some ones from her Mad Money. If she didn’t have enough she wouldn’t go.
She used the mad money for her wants. If she wanted a soda from the machine she would use mad money. It was there to keep her from going mad. 🙂
Now even if you don’t have a cute little Mad Money jar, you should keep your splurge money in cash. That way, you can splurge, but you won’t get out of control. Besides, if you feel like your budget is controlling you, you will not be happy and you will choose to not follow it. So instead of not budgetting, just allow yourself to have some non-discretionary spending.
I like to keep $20 in my wallet. We typically split up our mad money. So, I will have $20 totally separate from the household money and totally up to me to spend. That means if I want the nice brand of toothpaste, but our budget allows for the basic toothpaste, I buy the nice stuff with my cash. Its also used exclusively by me since my spouse has no preferance for toothpaste brands.