Many of you don't know that I was a starving artist before being in real estate.
Well...not exactly starving, but I really knew how to hang onto my money. I paid cash for EVERYTHING.
If I saw something in the store I wanted I gave it a 3 day wait period to see if I REALLY needed it. If I was still dying for it I found a way to come up with the cash.
I also used many coupons to buy things. I am researching now to do that again. It's sort of like a game to see what you can get for almost free.
Here's Michael's post on how he survives on only $60 a month!
I'm going to share a secret with you - my allowance is $60 per month. That's right - $60 dollars to spend on dinning out, movies, coffee, and anything else I may want to treat myself to.
I wasn't always this frugal. In fact, my family can overspend with the best of them! Fortunately my wife and I decided to stop the crazy spending and put ourselves on a financial diet.
Should your allowance be $60? Well that depends. If you are putting 10% of your gross income into savings every month and have no credit card debt I'd say you could probably bump that figure up. If, on the other hand, you have less than 3 months worth of your income sitting in your regular savings account for emergencies, have any credit card balances, or are saving less than 10% of your gross income I'd suggest your number should be less than $60 until you can achieve those three benchmarks.
So how exactly do you get yourself on such a financial diet and then maintain? It's called "CASH ONLY."
For all your personal expenditures you must pay with cash from your wallet or pocket book. The amount of your allowance is not the critical part of this diet, it is the use of cash that is key. Having a finite amount of paper in your pocketbook that you can see every time you reach for some more is the only way to reign in the spending.
Pay yourself the allowance on the first of every month and then have fun! Of course, when the cash runs out you are done for that month. No reaching for the debit or credit card when you run out mid-month. No cash, no play!
We implemented this for our entire family, including our 13 year old and 10 year old. It's amazing the choices each individual will make when it is THEIR allowance on the line. There will be times that we drive through McDonalds' because one person wants to waste their money on some fries and the rest of us will not order anything and wait to get home to snack.
For each of the last 6 months I've managed to spend $20 or LESS of my allowance.
My passion is my involvement with Spokane County Search and Rescue, so I put away $40 per month to buy my SAR toys (er...equipment!). I never realized I could be THIS frugal until I had a finite amount of cash in my pocket.
How low do you think you could get your allowance to?