Family budgeting for people who LOVE spreadsheets.
September 12, 2012 6:48 AM Subscribe
Household finances: My SO and I have started to give ourselves "allowances" to put an outer limit on our discretionary spending. Have you done something similar? What did and didn't work? Any thoughts on the specific questions inside?
posted by 5845(f)(1)(D) to work & money (23 answers total) 28 users marked this as a favorite
SO and I are big savers, and live well within our means. We fully fund our available retirement plans, have living expenses set aside, etc. We are thankful for our good fortune.
We have given ourselves a weekly allowance of $X each, which covers all personal discretionary expenses (e.g., a weekday lunch, or a book, or a cab ride). However, it would not, generally speaking, cover something like shampoo, shoe repair, dry cleaning, etc.--just the "fun" stuff you could do without.
We also have a shared dining out budget of $Y (i.e., for dinners out together, not workday lunches).
Any unused amounts in either category carry over to later weeks. If our dining out expenses exceed $Y, one half of the excess is deducted from each of our allowance "accounts." So far, this has worked pretty well--and puts an outside limit on this part of discretionary spending of $104X and $52Y.
We're still figuring this all out. If you use a similar system, do you have any thoughts on the following?
Vacations: How do you budget for vacations? Do you treat that as part of your allowance you should save up for? Or is it a separate budget item? If you were setting a budget of $3000 for travel for the calendar year, would you view that full amount as being available in January, or would you treat it as "accruing" over the course of the year?
Advances: Do you allow advances to make purchases that are more than the amounts you've set aside from your allowance? If so, do you "charge" yourself interest or otherwise disincentivize advances to ensure you're not always in the red?
Miscellaneous inflows/income: If you have an allowance, how do you deal with miscellaneous income--into the general fund, or into one person's allowance fund? For instance, if you sell your old banjo that you originally bought with your allowance, do you keep that money (i.e., as a return on your allowance), or does it go back into the general fund? Alternatively, what if a friend pays you $Z for helping with their business? It seems to me that if I buy something with my allowance and sell it later, the proceeds should be allowance as well, but I'm less certain about the income for services piece.
Saving up! Lastly, allowance or not, how do you save for a predictable recurring "capital" expenses that you'll pay with your allowance? That is, if you were to buy an iPhone 5 today, and would expect to buy a new iPhone 6 in two years, would you start setting aside ~$4 a week from your personal allowance so that in 2 years you'll have enough saved up to purchase an iPhone 6? Or do you constantly find yourself saving 100% of your allowance for one big expense after another? Does that work?
It probably goes without saying that 1) we're both very rational, 2) there is a significant amount of trust, teamwork, and shared goals here, and 3) we totally love spreadsheets. We already both use Quicken to track finances.
Feel free to MeMail me if you don't want to respond in the thread.