Planning your Retirement from Z to A, Part VI

Blogging Crap with Chip

Welcome back. Today we’ll be talking about “allowances”. A set amount of money, dolled out on a specific day.

You’re never too old for an allowance.

We were working hard at raising kids, working 40 hours a week and doing many side jobs to keep our little home machine moving. But spending all our money on bills and having none for pleasure was going to be a recipe for disaster. We needed to find a solution.

Here’s what we did.

After a few months of successfully paying bills, setting goals and watching our debt go down, we decided to reward ourselves and so we went out and bought stuff. Some nice wine, a bottle of vodka and some special food that we wouldn’t normally buy.

Hey, we deserved it. At first, the idea of rewarding ourselves was a welcomed bonus to our lives. We were doing pretty good with our goals and so spoiling ourselves a little didn’t seem out of the question.

That is until we realized that we were “spoiling” ourselves on a regular basis. All of a sudden we were more focused on rewards than our goals. We’d put the very minimum we needed to on our bills and then consider that a success. (minimum payment, plus interest)

After a few months, we started just putting the minimum payment. Our focus returned to our present self and we were forgetting our future selves. We had to find a happy medium. We live in the now and we wanted to enjoy the now too, not just some future that may never come. After all, no one knows how long they have to live. We need to enjoy today, while planning for the future.

The good news for us was that every 6 months we’d sit down and take a deep dive into our finances. We’d look and see where we were with our goals. We analyze our success and our failures. This is where we discovered that the first few months of me taking over the finances went well, but then… we started rewarding ourselves a little too much.

We reevaluated our goals. Were they realistic? Did we overshoot? What could we do to keep on track and stay motivated?

We sat down and talked about it.  We decided that spending on pleasure was important. So from now on we’d give each other a set amount of money every payday. Let me tell you, it wasn’t much. But it was affordable.

Ten dollars. Yup that was my allowance. Every two weeks we’d both get ten dollars and with that ten dollars we could do whatever we wanted. Usually one of us would buy a bottle of the cheapest booze and then the next week the other would do the same. Every Friday night, we’d put the kids to bed and have a little date night. It wasn’t much, but you know what? It was ours and it was paid for.

We did this for about a year. After a while we decided that if we did side jobs, like sell a portrait or sell something on Ebay that we would take 10% of that “new” income and use that as allowance money also. This would motivate us to work odd jobs here and there.

Hunnee is a great artist, so I started promoting her artwork. I started offering people 5×7 portraits for $25.00 bucks. Sure it wasn’t a lot of money and she would only be making about $5.00 per hour, but it was extra income and the overhead was low. Even at $25.00 it was a hard sell… It’s no wonder there are so many starving artists.

The first few months she’d have one commission per month and by the end of the year she was averaging two. The next year we raised the price to $30.00 and she still averaged about 1 or 2 a month.

SIDE NOTE:

When we bought our home our oldest was 6 and our youngest was 4. The six year old started getting invited to birthday parties and of course that means presents to buy. That was a problem.

Our solution was to get the kids a paper route. They would do the papers 2 days a week around our neighborhood. They had about 52 papers. At first we split the money 70/30 and when the youngest started school we went 50/50.

Not only did they have money for presents and other things like school events they were able to save up for their future selves too. This was also a great opportunity for  family time. Sometimes me and Honnee would go out and do the papers on our own. After all, it only took us 15 minutes. It took almost 2 hours with the kids. But it was worth it.

At one point Honnee and I were doing 800 papers. That was about $500 a month. We did that for about a year. We were on the go 7 days a week.

As the months went by we massaged and reconfigured our budget. We were reworking our budget every three months.

At one point our Visa #2 went down under $2000.00, that was very exciting. We decided to put all our efforts on getting rid of that one first now and we did it in just over 2 years.

At this point we decided to take the balance of Visa 1 and transfer it to the Visa 2 card that had the lower interest rate. We then promptly canceled Visa 1. Somehow the 4.99% “temporary” interest rate stayed the same for the entire duration of our paying it down. (about 8 years)

When we got rid of the one card, we decided to reward ourselves with a bigger allowance. Now we were getting $20.00 each every two weeks… Woohoo! I felt like a millionaire, what was I going to do with all that money?

At the end, when we finally paid off all of our debt, (except for the mortgage) our allowance was $100 every two weeks. That was a crazy amount. Keep in mind, I had found a new job and was a supervisor making top rate pay. Life was good.

We used our allowance money to go to concerts and travel.

The takeaway for today is that you need to reward yourself somehow and enjoy the present. But don’t reward yourself so much that you lose sight of your goals and objectives.

Next we’ll talk about budgeting and making ends meet.

To be continued…

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