Imagine where we might be today if we'd stuck with the idea of the weekly allowance we received as kids. It’s never too late to use a great idea, and a weekly allowance is one that you might not want to let go of just because you've left childhood behind.
Business, life, and money coach Vickie Champion suggests bringing the weekly allowance back as a way of helping adults to budget more effectively. Vickie is a master at helping people improve their spending and savings habits by changing the way they think about money.
"I used to have a weekly allowance when I was younger. When I went to college I gave it up under the premise that it was for kids, and now that I was a grown-up I didn’t need it. I wanted to have what I called financial freedom. What a mistake! After several years of having constant financial difficulties doing it “the grown-up way,” here’s what I now know about weekly allowances."
Learn more about why a weekly allowance can be a good idea and how to implement it.
Eight Reasons to Use a Weekly Allowance
- Financial tracking: It keeps you aware of how much money is going out. By setting a limit for yourself, it's easier to track your spending.
- Break spending habits: Having an allowance can get you out of the habit of using ATMs and debit cards.
- Fewer impulse buys: It makes you think twice before spending money on spur-of-the-moment purchases. Any impulse buys you make would then cut into your available funds for other spending.
- Money management: Not only can an allowance teach you and your family members how to manage money, but it can also teach you financial discipline. This is a valuable skill to carry throughout your financial life.
- Equal spending: If you share finances with a partner, you could each take a weekly allowance. That could help keep things equal, so one of you would not be spending more than the other.
- Easier budgeting: An allowance can help make budgeting easier than ever before. You wouldn't won't have to track the little purchases you pay for with your allowance.
- Easier saving: When you're scrutinizing every purchase you make—because you only allow yourself access to a small portion of your funds—it helps you save money.
- Prioritized spending: Using an allowance encourages you to work toward your personal goals. That's because you're only spending money on the things that are truly important to you.
Keys to Implementing
Determining how much you can spend each week is the key to using the weekly allowance concept. Train yourself to accept that there is no more money available when your allowance is depleted. When you hit your spending limit, you're done. There's no going to the ATM or charging things on credit to tide you over.
You may have to wait a few days to visit the grocery store. You might be surprised to realize that you don’t go hungry. There always seems to be something to eat in the back of the pantry.
Restricting yourself to an allowance means that you might sometimes have to say no to going out with friends, or you might have to put off a home repair until you've saved up the money. It can feel good to be in control of where your money is going.
If you don't feel comfortable putting off necessary expenditures like groceries or home repairs, dedicate a portion of your overall budget to those things, so they won't have to come out of your allowance.
Of course, you may have to reduce your allowance to accommodate them, and they, too, should have a monthly cap. If you allow X number of dollars for groceries, you'll be less inclined to splurge on a fancy dinner if it means your grocery budget might run out before the month or week does.
Do a Trial Run
You don't have to commit to the idea of an allowance for the rest of your life. Try it for a week, two weeks, or even a month. If you find that you're miserable, adjust your system or abandon it and try budgeting in another way.
Who knows? You might find that the allowance idea works for you.