When you hear the term “allowance”, you probably picture children doing chores around the house, saving change in their piggy bank, and maybe splurging on a stash of candy. However, if you apply the concept of an allowance to yourself, you might find that you’ll start to make smarter spending decisions and save more money.
You’re not exactly tying this allowance to any chores. I mean, that’s basically what your job is. I’m not going to sit here and give you more work to do. This is about allocating your paycheck and giving yourself a set amount that you are allowed to spend in a certain period.
Determine your allowance after you have allocated all necessary funds to cover your regular monthly expenses like your rent/mortgage, utilities, groceries, transportation, credit card bills, and other loan payments. Whatever is left, set aside some to save and some that you can afford to spend. This is your allowance.
Taking this approach makes your spending more fun, and will encourage you to find ways to save in other areas so that your allowance can be even larger. For some help, use ACCC’s Household Budgeting Worksheet to identify all your income and expenses. Then, check out these Ways to Save by Cutting Back.
If you’re struggling with debt and need help with budgeting, contact American Consumer Credit Counseling and speak to a certified counselor today. Call 800-769-3571.