Did you really think I was going to leave out your wants?!?! I love to shop like the next girl. I love clothes and shoes oh but my weakness is HOME GOODS!! I love pictures, clocks, knick knacks, and clean furniture lines...LAWD I almost went and ordered something off of Wayfair.com just thinking about it!! Lol. Oh but back to the point of the blog. We all have that desire to get something new, shiny, or things that just flat out make us happy. The basis of having a great financial life is discipline. But discipline doesn't always come easy so I recommend using fail safe ways to set this system up. This is just one way to give your self boundaries. The system I going to talk about in this blog is a little more liberal. There are other plans with stricter boundaries.
If you read my former blog and adhered to the steps, you would know how much your needs cost. Remember, we included savings, insurance, retirement, etc in the "needs" column so this should be taken care of. I personally have a long needs list. I include everything from paper towels to my charitable giving. I do this to make sure I do not forget anything!! (I will go into more detail about the needs list later) I could basically live off of the money I have in my needs account and not need to spend another dime. My wants list includes things like clothes, shoes, or eating out. These things are extra. When payday comes, I set it up so it automatically direct deposits an amount into a savings account, an amount in a house/ needs account, and another deposit for my allowance account. Most companies have direct deposit with the option to add multiple accounts so use this to your advantage (and its completely free!!). Transferring funds through your bank can tack on additional maintenance or transaction fees so be careful. After you come up with the amount to adequately cover your needs, think of a reasonable amount for your allowance. DO NOT base this off of what you want but what you can realistically afford. The point of this is to give you a little break, sort of like a cheat day when you're on a diet. Set up your direct deposit to deposit the allowance amount in a separate account from the house/ joint account. Your allowance is yours to do whatever you want! Ladies if you want those expensive shoes, get them!! You have been responsible. Guys if you see that new video game you have been dying to have but you know explaining the features to your wife is something she will never understand, go for it!! But once its gone, its gone so spend wisely. For couples, this creates and atmosphere where the element of arguing over money is reduced and for singles it gives you better control over the out of control spending habits because "you're single and no one can tell you anything."
Maybe you are that person who says "Nicole I don't want to keep up with all of those accounts!!'or "Nicole I do not have the option for direct deposit!' Maybe you are self employed and get paid by check or cash from your clients. I hear you! If you want to separate the money for your wants and place the cash in an envelope, you can do that as well and once it is gone, it is gone. I personally don't like to carry cash cause I feel like it has a chance of getting lost.
Getting things you want is something I don't like to look over when placing someone on a financial plan. It is the number one way to get discouraged and go astray. So have fun with your allowance!!