Is our monthly Personal money out of line?

Questions on how we spend our money and our time - consumer goods and services, home and vehicle, leisure and recreational activities
Jags4186
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Re: Is our monthly Personal money out of line?

Post by Jags4186 » Mon Jun 04, 2018 6:49 pm

I hate the idea of having some sort of personal spending money that the other spouse has no say in. When I want something, I buy it. When my wife wants something, she buys it. We don’t buy things that we think the other would disapprove of, and we discuss things that are over arbitrary values. It seems for us that over $200 seems to be the a “discussion item” although those purchases are few and far between. There also is a general understanding that if my wife says she’s getting her hair cut and colored, she’s spending a few hundred bucks. If I say I’m buying some new cloths/shoes etc. I’m spending a couple hundred dollars. My wife gets her hair cut maybe 2 or 3 times a year. I might buy new cloths twice a year.

If you give someone a $1200/mo allowance, they’ll spend $1200. Maybe you’ll find that if you eliminate the spending budget your wife would spend less?

Also, I think those who “save up” their allowance to buy something big, again, is silly. Money may be fungible, but saving up an arbitrary spending budget for a year and then buying a $X000 toy should still require a discussion. A discussion doesn’t mean no, but large purchases should be mutually agreed on even if they are for the benefit of one person.

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FiveK
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Re: Is our monthly Personal money out of line?

Post by FiveK » Mon Jun 04, 2018 7:13 pm

LarryAllen wrote:
Mon Jun 04, 2018 6:31 pm
Reading between the lines I wonder if you are micromanaging your wife's expenses to a level that annoys her? That's what I read.
That's a reasonable question, but the OP's question is also reasonable. Presumably the OP hasn't been married to enough people to have a statistically valid sample size on his own, and is thus looking for more data points here.

At some point, as one increases monthly miscellaneous spending ($10, $30, $100, $300, $1000, $3000, $10000, etc.) the line between "perfectly reasonable" and "this is a problem" gets crossed.

I know if one of us started spending $1000/mo with no explanation, the other would ask about it. :?

randomguy
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Re: Is our monthly Personal money out of line?

Post by randomguy » Mon Jun 04, 2018 7:31 pm

RickBoglehead wrote:
Sun Jun 03, 2018 8:54 am
Grt2bOutdoors wrote:
Sat Jun 02, 2018 3:57 pm
We do zero. All money goes into a joint pot, all bills are paid out of joint pot, including savings. I don’t understand the need to “allocate” to him/her needs. Home Depot expenses whether they be tools or supplies are for the home, the one we jointly live in.
This ^^^^

Without getting into the debate of individual vs. joint accounts, shouldn't a couple agree on how money is being spent? Shouldn't there be discussion about it? I'm not saying that a wife needs to get permission to buy a pair of shoes (or a husband get permission), but the idea of spending say $100 per month every month on shoes, using $1,200 of the jointly earned funds, should be something that was discussed at some point.

I can't imagine a scenario where Home Depot purchases are "mine". We both own and live in our house.
Sure but the need for a 3k tractor when a 150 dollar mower would do the job is a personal expense.:) We are talking about a pretty reasonable % of income. I am sure both of you could spent less. The question is why and if you both agree with that reason.

delamer
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Re: Is our monthly Personal money out of line?

Post by delamer » Mon Jun 04, 2018 7:47 pm

Jags4186 wrote:
Mon Jun 04, 2018 6:49 pm
I hate the idea of having some sort of personal spending money that the other spouse has no say in. When I want something, I buy it. When my wife wants something, she buys it. We don’t buy things that we think the other would disapprove of, and we discuss things that are over arbitrary values. It seems for us that over $200 seems to be the a “discussion item” although those purchases are few and far between. There also is a general understanding that if my wife says she’s getting her hair cut and colored, she’s spending a few hundred bucks. If I say I’m buying some new cloths/shoes etc. I’m spending a couple hundred dollars. My wife gets her hair cut maybe 2 or 3 times a year. I might buy new cloths twice a year.

If you give someone a $1200/mo allowance, they’ll spend $1200. Maybe you’ll find that if you eliminate the spending budget your wife would spend less?

Also, I think those who “save up” their allowance to buy something big, again, is silly. Money may be fungible, but saving up an arbitrary spending budget for a year and then buying a $X000 toy should still require a discussion. A discussion doesn’t mean no, but large purchases should be mutually agreed on even if they are for the benefit of one person.

If the OP was giving an allowance to his wife that he was thinking of eliminating, then he’d need a marriage counselor not a finance forum.

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Re: Is our monthly Personal money out of line?

Post by AlphaLess » Tue Jun 05, 2018 12:35 am

livesoft wrote:
Sat Jun 02, 2018 1:49 pm
she took each of our prior 3 months of personal expenses and divided by 3 to get the amount for each of our personal money which we called allowances. She got $300 a month and I got $0 a month.
Golden!

Did she also wait for a while before choosing that method (to pick 3 contiguous months such that the average was higher)?
They can be sneaky like that, you know.
"You can get more with a kind word and a gun than with just a kind word." George Washington

mancich
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Re: Is our monthly Personal money out of line?

Post by mancich » Tue Jun 05, 2018 4:03 am

10YearPlan wrote:
Mon Jun 04, 2018 4:30 pm
runner540 wrote:
Mon Jun 04, 2018 11:59 am
mancich wrote:
Mon Jun 04, 2018 3:58 am
Thanks for all the great responses. To me, "optimize spending" means not wasting money and getting the most utility out of what we do spend it on. Now I know that "wasting money" means different things to different people. :beer

I do like the perspective that as long as we're on track to meet our financial goals, I should probably lighten up. Our level of personal money isn't a source of conflict in any way, I was just thinking that it seemed sort of high to me.

Thanks again everyone!
Do you have a separate budget line for kid stuff (clothes, activities, pocket money)? If not, it's probably being covered by your wife's "allowance".
I hadn't considered this. If so, then the wife needs a raise for her own portion! :)
I do 99.9% of the kid spending in our household (I am the wife, but also the money manager) so sometimes at face value, it might look like I am spending money on myself. When in fact, I am not. Darn kids.
Sometimes DW buys clothes for the girls from her personal money, sometimes from the joint account. These purchases are cyclical (Back to school, spring/summer)

mancich
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Re: Is our monthly Personal money out of line?

Post by mancich » Tue Jun 05, 2018 4:04 am

delamer wrote:
Mon Jun 04, 2018 7:47 pm
Jags4186 wrote:
Mon Jun 04, 2018 6:49 pm
I hate the idea of having some sort of personal spending money that the other spouse has no say in. When I want something, I buy it. When my wife wants something, she buys it. We don’t buy things that we think the other would disapprove of, and we discuss things that are over arbitrary values. It seems for us that over $200 seems to be the a “discussion item” although those purchases are few and far between. There also is a general understanding that if my wife says she’s getting her hair cut and colored, she’s spending a few hundred bucks. If I say I’m buying some new cloths/shoes etc. I’m spending a couple hundred dollars. My wife gets her hair cut maybe 2 or 3 times a year. I might buy new cloths twice a year.

If you give someone a $1200/mo allowance, they’ll spend $1200. Maybe you’ll find that if you eliminate the spending budget your wife would spend less?

Also, I think those who “save up” their allowance to buy something big, again, is silly. Money may be fungible, but saving up an arbitrary spending budget for a year and then buying a $X000 toy should still require a discussion. A discussion doesn’t mean no, but large purchases should be mutually agreed on even if they are for the benefit of one person.

If the OP was giving an allowance to his wife that he was thinking of eliminating, then he’d need a marriage counselor not a finance forum.
No, not an allowance, and not thinking of trying to eliminate (or even reduce!). I'm smarter than that :D

10YearPlan
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Re: Is our monthly Personal money out of line?

Post by 10YearPlan » Tue Jun 05, 2018 9:06 am

mancich wrote:
Tue Jun 05, 2018 4:03 am
10YearPlan wrote:
Mon Jun 04, 2018 4:30 pm
runner540 wrote:
Mon Jun 04, 2018 11:59 am
mancich wrote:
Mon Jun 04, 2018 3:58 am
Thanks for all the great responses. To me, "optimize spending" means not wasting money and getting the most utility out of what we do spend it on. Now I know that "wasting money" means different things to different people. :beer

I do like the perspective that as long as we're on track to meet our financial goals, I should probably lighten up. Our level of personal money isn't a source of conflict in any way, I was just thinking that it seemed sort of high to me.

Thanks again everyone!
Do you have a separate budget line for kid stuff (clothes, activities, pocket money)? If not, it's probably being covered by your wife's "allowance".
I hadn't considered this. If so, then the wife needs a raise for her own portion! :)
I do 99.9% of the kid spending in our household (I am the wife, but also the money manager) so sometimes at face value, it might look like I am spending money on myself. When in fact, I am not. Darn kids.
Sometimes DW buys clothes for the girls from her personal money, sometimes from the joint account. These purchases are cyclical (Back to school, spring/summer)
Understood. In our case, we do not have "personal money" buckets. Instead we buy what we need, when we need it. Some months that is a low number, some months it is high. Like you, our spending tends to be a bit cyclical as well. We do consult one another on larger purchases. Neither of us asks for permission, and we both have a pretty mutual understanding of what we consider reasonable. For example, I would likely not spend more than $500 in any one shopping trip without at least giving the husband a heads up.

mak1277
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Re: Is our monthly Personal money out of line?

Post by mak1277 » Tue Jun 05, 2018 9:18 am

blueman457 wrote:
Sat Jun 02, 2018 4:03 pm
Grt2bOutdoors wrote:
Sat Jun 02, 2018 3:57 pm
We do zero. All money goes into a joint pot, all bills are paid out of joint pot, including savings. I don’t understand the need to “allocate” to him/her needs. Home Depot expenses whether they be tools or supplies are for the home, the one we jointly live in.
Just curious, how do you decide how much to spend on clothes or hobbies?
My wife and I are the same as Grt2b...everything goes into one account and all bills go out of there. No need to allocate.

As to blueman's question, we spend whatever we want on clothes and hobbies. Any big expenses (generally >$500) are discussed before being made, but in 11+ years I don't recall either of us ever saying "no" to one of those.

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8foot7
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Re: Is our monthly Personal money out of line?

Post by 8foot7 » Tue Jun 05, 2018 9:21 am

I guess it depends, but I'd have a hard time being OK with >$1,000 in free spending a month if you are not maxing out your tax advantaged space. A better answer is to run the numbers, figure out your Number, work backwards to figure out your savings goals, and then reconcile that against your free cash flow. If you're saving enough to hit your goal and you can swing $1,000, then sure, that's the gravy. If not, then I do think that is out of line.

2comma
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Re: Is our monthly Personal money out of line?

Post by 2comma » Tue Jun 05, 2018 9:36 am

We buy what we each want but luckily we are both pretty frugal. As I age the limiting factor has become where the hell are we going to put all of this junk! First world...
If I am stupid I will pay.

rg422
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Re: Is our monthly Personal money out of line?

Post by rg422 » Tue Jun 05, 2018 11:03 am

Wife and I do something similar. We each get about $500/month to spend on 'wants'; we max out our 401Ks, backdoor ROTHS, HSA, we contribute plenty to our kids' 529s and put in to our taxable. It's a great balance for us and has worked well. Could we save more for retirement, sure, but there are certain things we 'splurge' on to keep us happy.

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TxAg
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Re: Is our monthly Personal money out of line?

Post by TxAg » Tue Jun 05, 2018 11:14 am

Grt2bOutdoors wrote:
Sat Jun 02, 2018 3:57 pm
We do zero. All money goes into a joint pot, all bills are paid out of joint pot, including savings. I don’t understand the need to “allocate” to him/her needs. Home Depot expenses whether they be tools or supplies are for the home, the one we jointly live in.
We do it this way also, but I understand different strokes for different folks.

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TxAg
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Re: Is our monthly Personal money out of line?

Post by TxAg » Tue Jun 05, 2018 11:18 am

blueman457 wrote:
Sat Jun 02, 2018 4:03 pm
Grt2bOutdoors wrote:
Sat Jun 02, 2018 3:57 pm
We do zero. All money goes into a joint pot, all bills are paid out of joint pot, including savings. I don’t understand the need to “allocate” to him/her needs. Home Depot expenses whether they be tools or supplies are for the home, the one we jointly live in.
Just curious, how do you decide how much to spend on clothes or hobbies?
Neither of us are big spenders, and we discuss large purchases or things like vacations or kid stuff. We don't concern ourselves with spending "even" amounts.

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Re: Is our monthly Personal money out of line?

Post by stoptothink » Tue Jun 05, 2018 11:39 am

delamer wrote:
Sat Jun 02, 2018 1:44 pm
I don’t know that other Bogleheads expenses are relevant. It is discussion for you and your wife.

I only spend a fraction of what your wife does on personal care and clothes (assuming that’s where all of the $1,000/month is going). And my husband spends much less than you do on the stuff that you indicated.

But how does knowing that help you?
This...but I'll give you my opinion anyways. Our household income is a little more, but we don't spend anywhere close to what you guys do on "personal" things. My spending outside of absolute needs is $0 for months at a time, my wife's is ~$500/month, with most of that going to gifting to others (no joke, I showed her recently that she spent more last year on gifts for baby showers and weddings than we did on food for our family of 4); but we are quite minimalist and simple people. I've accepted that she likes to spend more than I do and we haven't had a disagreement about it in several years. I personally think $1000/month for just "walking around" cash is crazy, but it definitely isn't out of line with your resources and you are saving at a great rate. What we do and what I think is completely irrelevant to your life.

ETadvisor
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Re: Is our monthly Personal money out of line?

Post by ETadvisor » Tue Jun 05, 2018 12:15 pm

mancich wrote:
Sat Jun 02, 2018 1:09 pm
Fellow BH's:

I'm curious what people allocate in their monthly budget for personal money. My wife and I take home about $13,500 a month on average (not including a yearly bonus in March). I set aside $500 in our budget spreadsheet for me (this also covers misc trips to Home Depot and the like). I have a company car, so no cost for gas or insurance. We allocate $1,200 a month for my wife; this covers her gas (about $200/month), and other personal expenses (mani/pedi's, clothes, etc), but not auto insurance. $1,000 after paying for gas seems like an awful lot to me, but I'm a guy :)

So about 12.5% on average from our take-home pay is set aside for "personal expenses". We can afford this, and still save/invest about 20-25% of our after tax income into taxable accounts. We also max out our 401k accounts and contribute to a Backdoor Roth.

Given that I am always trying to optimize spending, I'd love to get input on what other Bogleheads spend to see if we're out of line relative to our income.

Thanks!
I see ideal household budgets that express 25% of net income to "Life" this includes everything except Housing, Transportation and Savings. I view (discretionary) home renovation and furniture as Life and (necessary) house repairs/maintenance as Housing. You indicate you are already at 12.5% for Life, so I assume if every other Life expense (including food) is 12.5% you are doing great.

I have also seen 50/30/20 which expenses are categorized as mandatory/discretionary/savings & debt repayments. This distinguishes food with groceries in the 50% and dining out in the 30%. You appear fine with the savings on most budget plans.

Our "Life" budget skews higher to food (groceries and dining out) but it is also our entertainment and our fixed expenses and our savings are on target. Personally, I would not want to have half allocated to personal grooming but I would consider food/entertainment. Some would argue travel should get most money allocated in the "Life" category. Your money, your decision.
Last edited by ETadvisor on Tue Jun 05, 2018 12:25 pm, edited 1 time in total.

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DaftInvestor
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Re: Is our monthly Personal money out of line?

Post by DaftInvestor » Tue Jun 05, 2018 12:22 pm

Back when we used to keep a budget and live by it we had no "personal money" line item.
Everything you are including into whatever this personal money is used for we accounted for somewhere else (Personal hygiene, dining out, clothing, entertainment, etc.) so our number for "personal" was 0.
Since you have a pretty high savings rate I don't see an issue with what you are doing it - its just hard for me to relate as we never had a bucket called "personal".

HardHitter
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Re: Is our monthly Personal money out of line?

Post by HardHitter » Tue Jun 05, 2018 1:02 pm

We save, on average, 66% of our take home income a month.

With that said, Wife and I both get $200/mo to spend on personal items which is defined as something that only benefits ourselves. For example, she tends to spend it on female stuff such as clothes, hair, makeup, mani/pedi etc. while I spend it on things like electronic gadgets, car parts, tools, etc.

Whatever is left over in the month gets carried over to the next month. It encourages saving for months to get those "big ticket" items.

AlwaysWannaLearn
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Re: Is our monthly Personal money out of line?

Post by AlwaysWannaLearn » Tue Jun 05, 2018 9:57 pm

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Last edited by AlwaysWannaLearn on Wed Jul 18, 2018 11:56 pm, edited 1 time in total.

scorcher31
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Re: Is our monthly Personal money out of line?

Post by scorcher31 » Tue Jun 05, 2018 10:26 pm

I want to double check here you are maxing out 2 401ks and 2 Backdoor roths. Then in addition you are putting 20-25% of your monthly take home in a taxable account so about 3k a month or so? If that's the case frankly you are doing great. This is about 85k saved a year in total(plus 401k match) that is more than enough for most people. If you want to break down your expenses more... i.e. where the 13.5k goes on average every month we could probably give you a better idea how your doing. Depending on your other expenses/spending especially if some will vanish like daycare or a mortgage and the spending is controlled I don't see it as an issue.

I'm surprised so many people are hard on the spending... we don't have a full look at your expenses. When I posted my income, expenses yearly savings (close to yours) in the past people scoffed that I was being ridiculous for any financial concerns.

spth
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Re: Is our monthly Personal money out of line?

Post by spth » Tue Jun 05, 2018 11:23 pm

livesoft wrote:
Sat Jun 02, 2018 1:49 pm
You are lucky. When my spouse made a budget when we were first married, she took each of our prior 3 months of personal expenses and divided by 3 to get the amount for each of our personal money which we called allowances. She got $300 a month and I got $0 a month.

Something you might consider: Our allowances didn't let us buy everything we wanted, but we could save up a few months and buy something more expensive such as a new bicycle or a business suit.
That’s one cheap suit!

Kaktus
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Re: Is our monthly Personal money out of line?

Post by Kaktus » Wed Jun 06, 2018 12:20 am

Many good views. I would just like to give a somewhat different reflection - I would personally be very frustrated not being able to save more than about 2.6k when having 13k net (approximately 20%). I would feel it is on the low side with three kids. You never know next year financially. THere are lots of factors to weigh in of course. But I would probably like to see more go into savings than that.

Secondly, personally I would look mainly into the big costs like the cars etc. To see if they are too high. I stick for example to the rule that the cars purchase price should not be more than two months income. I dont think that her personal shopping-beauty-health-hobby costs seems that high.

barelybarefoot
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Re: Is our monthly Personal money out of line?

Post by barelybarefoot » Wed Jun 06, 2018 2:28 am

OP - with these types of questions it’s hard to get what do ‘similar’folks do because we all have such different needs and wants. Maybe instead ask of those making $200k/mo how is allocated to personal bucket? We make more and my husband has significant ‘personal’ allowance that’s more than your wife’s but I have Zero. I’m frugal bordering on cheap, it’s leftover from my childhood. There’s no reason to torture my husband with similar habits when we are saving ‘enough.’ I think the discrepancy in personal needs/spending bothers you rather than actual amount? If you felt you wanted to spend freely with an allowance of $1200/mo like your wife you would not have posted this. Of note, though o have no personal bucket money are relationship is such that really I could spend whatever the heck I wanted and never check in with him. But, I have little wants

cocoon
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Re: Is our monthly Personal money out of line?

Post by cocoon » Wed Jun 06, 2018 2:48 am

For me, 40% of my income goes to cover my expenses and I am trying to cut as much from spending on food (I am not starving but cook at home rather going to a restaurant) and I am trying to save everything I can. But I am still in the beginning and I live on my own, so I don't have to take care of anyone else and it is easier to save more and spend less on personal stuff.

mancich
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Re: Is our monthly Personal money out of line?

Post by mancich » Wed Jun 06, 2018 4:10 am

scorcher31 wrote:
Tue Jun 05, 2018 10:26 pm
I want to double check here you are maxing out 2 401ks and 2 Backdoor roths. Then in addition you are putting 20-25% of your monthly take home in a taxable account so about 3k a month or so? If that's the case frankly you are doing great. This is about 85k saved a year in total(plus 401k match) that is more than enough for most people. If you want to break down your expenses more... i.e. where the 13.5k goes on average every month we could probably give you a better idea how your doing. Depending on your other expenses/spending especially if some will vanish like daycare or a mortgage and the spending is controlled I don't see it as an issue.

I'm surprised so many people are hard on the spending... we don't have a full look at your expenses. When I posted my income, expenses yearly savings (close to yours) in the past people scoffed that I was being ridiculous for any financial concerns.
Yes, I should have stated that more clearly. And to address another post, I don't resent my wife for spending $1000/month (after gas), I was just curious to get the opinion of other Bogleheads. Thanks all

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