It used to be that when I felt broke, I chased away the horrible feeling by leaning on my bevy of credit cards. As long as I could spend money, it felt like I had money. And the more I used my credit cards to prove to myself that I wasn't really broke, the more debt I accumulated. Finally, I couldn't fake it any longer.
It took me 13 years to get out of the financial mess I got our family into. But I did it, and in the process, I learned a very important lesson: All of us need some money we can call our own.
At some point during my long journey back to financial health, my husband and I agreed to put me on an allowance. It changed everything for me. As long as I had my own money and it wasn't money I was sneaking out of the account in hopes that he would not find out, I didn't feel broke. And when I didn't feel broke, I was much more willing to be frugal with the rest of our income. My change of attitude made all the difference.
Step 1: Talk it over. If you're married, bring up the subject with your spouse. My husband totally endorses my allowance. He gets one, too. Determine what you're going to spend your allowance on. It should be just for you, so no groceries or household essentials like toothpaste and laundry detergent.
Step 2: Pick an amount. You can specify a set amount, like $25 a week or $200 a month, or go for the gold by taking a percentage of your take-home income. Here's a secret: It's not the size of my allowance that makes me feel secure; it's knowing that I can count on getting it every month.
Step 3: What's the schedule? Once you know the amount, determine how often you're going to pay yourself. If you get a monthly paycheck, you might want your allowance in one lump sum. Or would you prefer smaller amounts weekly or biweekly?
Step 4: Cash or ATM? There are several ways to receive an allowance, but cash is my favorite. No hassles, no worries. I put my allowance into an envelope that I keep in a secret place.
If cash isn't for you, set up a savings account with access via a debit card. The benefit of doing it this way is you'll have a monthly statement that shows where your money goes.
Money has a way of leaking away undetected. If you just start spending your allowance without keeping track of where it goes, at least some of it is going to just disappear. The way to stop the unintended flow is to keep track so you can be accountable — to yourself! If you are keeping your allowance in an envelope, it's handy to record your expenses on the back of the envelope. Or, set up an allowance tracker. There are many downloadable options for iOS and Android that will make tracking your spending so easy.
My allowance has grown over the years. However, there have been times when I've taken a pay cut for a period of time, as we've needed to tighten our household spending. So it has gone both ways. And my raises have been the result of systematic negotiation with my financial partner, my husband.
Mary invites questions, comments and tips at [email protected], or c/o Everyday Cheapskate, 12340 Seal Beach Blvd., Suite B-416, Seal Beach, CA 90740. This column will answer questions of general interest, but letters cannot be answered individually. Mary Hunt is the founder of www.DebtProofLiving.com, a personal finance member website and the author of "Debt-Proof Living," released in 2014. To find out more about Mary and read her past columns, please visit the Creators Syndicate webpage at www.creators.com.