How do you stop money slipping through your fingers?
The best way to stop money slipping through your fingers is to cut up the credit cards. Buying on credit cards separates the pleasure of the purchase with the pain of paying for it, so it is very easy to lose track of what you have spent.
Whilst this is the easiest solution, it probably isn’t the most practical so here is another option.
Have a separate bank account for your own ‘pocket money’. In the same way as we give children pocket money to spend any way they want, this is an account that is totally for your personal discretionary spending and is guilt free, you can do anything you want with it.
There is a very large BUT here. Before setting up this account you need to be sure you have all the household expenses, debt repayments and savings covered so you know how much pocket money you can allocate to yourself, pay yourself regularly, ideally weekly.
There is discipline required to make sure you don’t ‘borrow’ from your household account if you run out of pocket money, and vice versa using your pocket money account for household expenses.
You need to be very clear about the distinction between household money and pocket money (particularly if a relationship and you are sharing household expenses). Your partner should also have their own ‘pocket money’ account as well and it is perfectly fine for the amounts to be different.
ACTION: start a new bank account and deposit $20 – $50 per week for your pocket money, monitor yourself carefully over the next 4 weeks and then adjust your allowance once you have established your other outgoings.
For more tips from Lynda Moore, watch our video stopping money slipping through our fingers