Your Wants Account

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A lot of time with budgeting is typically spent on the discretionary spending as this is where things can get out of hand pretty quickly!

The system I use quickly highlights if there is a problem.

Basically, I want you to setup a new bank account with a new bank account – Your wants account.

This is so you have to make a conscious decision to use this card when spending, rather than all living and discretionary costs ending up in the same account or credit card.

Then this will require some testing and measuring over a few weeks to see what is manageable.

You are going to setup a weekly/fortnightly/month amount and setup an automatic payment for those funds to transfer across into your spending account (depends on your pay cycle – the one issue with monthly is that all the cash can disappear by Day 10!).

You can then spend this on whatever you like – socialising, clothing, entertainment – the trick is that your spending should be aligned to how you want to live your life. Spend it on things you care about, that make you happy and not on what others will think of you.

Try an amount – is it enough, is it too much? How long did it last? – Are you willing to reduce that amount in order to be able to save more? Or are you happy with your current level of savings.

If you are in a relationship, have a conversation about money and how you would prefer to run it – should this be in one account or should you have separate ones.

There are arguments for both! It is purely what is going to work for you. A couple of things I have learned:

  1. If one account you have to learn to let go a little. Have a limit that either of you can spend without discussing the other person.
  2. If separate accounts, you should set aside some additional funds (or reallocate funds) into the living account for meals out – so you aren’t debating who’s turn it is to pay.

I really believe this account and system gives you greater accountability with your spending, while keeping things simple – you soon know if you are overspending as there is no money in the account!