Recently, Kathy Merlino over at Kathy’s Retirement Blog, wrote a post called What Is Your Relationship with Money? It seems that some folks really took exception to Kathy’s use of the term ‘Blow Money’ for that money which has been earmarked for “discretionary spending.” She and her hubs allot a certain amount each month to spend as they see fit – without questions! I think it’s great – It’s not “Money Blown” as her next post suggests, but rather money which is spent making their lives wonderful! Yep, actual money for LIVING!
Hubs and I use a similar but slightly different “strategy.” We keep what we call the Needs and Wants List:
On the Needs side, we list things that are going to REQUIRE upcoming expenditures: A new roof. Tires for the car. On the Wants side, we list things that come up that we would like to purchase, but are not actual necessities: New tile in the guest bath, refacing the kitchen cabinets, those diamond encrusted wine glasses (OK…. Not really…. surely you know me better than that by now!)
The point is that the list accomplishes two things for us:
- First, by putting an item on the list, we are forced to analyze our motives. Is this something we really need, or is it something we’d just like to have?
- Second, putting items on one list or the other allows us to prioritize our spending, while slowing down impulse buying (at least on larger items.) Have you ever stopped to think something through like this – “Which would be more important to us…a new toilet or new carpet in the family room?”
The list is generally for bigger ticket items. We have always had a shared bank account, and because we both have similar financial values, we don’t get crazy on the day to day splurges. (Yep, occasional quilt fabric counts as day to day spending.) Neither of us is a compulsive shopper – I repeatedly remind him that he is a lucky man, because clothes shopping is just not in my wheelhouse! Our Needs and Wants list helps us to think about the question, “What do we need to save for, and what should we “blow money” on?” In either case, we believe that as long as it’s thoughtful, deliberate, and within the retirement budget, none of that money is actually “blown.”