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My girlfriend and I created an interesting budget but we have no idea what to call it other than "the budget".

These are the rules we set for ourselves:

  1. Every month, I am allowed to spend $32 on whatever I want
  2. Every month, she is allowed to spend $32 on whatever she wants
  3. The cost of my spending will deplete my funds as well as hers
  4. The cost of her spending will deplete my funds as well as hers
  5. This does not affect living expenses; as in, $32 is for stuff we can avoid buying but buy anyway

Basically, the main driving force here is: neither of us wants to deplete the other's funds. We don't know what to call it though. I'm mostly posting because I am quite proud of this idea.

So, is there a term for such a budget?

Clarification:

  • we're both still going through university, which eats through the money we make
  • 20yo now, started the budget thing at 18yo
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    So your monthly budget is $32, and either of you can spend it? – Ben Miller - Reinstate Monica Apr 15 '14 at 5:01
  • "Joint budget" would be one idea. – JB King Apr 15 '14 at 5:01
  • @Ben pretty much; one $32 shared between us – user2738698 Apr 15 '14 at 5:12
  • I need to move to the place where you live. $32 a month. That is freaking awesome. – DumbCoder Apr 15 '14 at 12:24
  • @DumbCoder - I think $32 is their bar budget, and even then it's low. – JTP - Apologise to Monica Apr 15 '14 at 12:55
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If my wife and I tried this, we'd call it grounds for divorce.

However, I think most long term couples actually do this, and it is just a budget. It is common practice for two spouses to deposit money into a single checking account. All of the household expenses are then paid from that single account. Same as you describe: if I spend money from the joint checking that is less money available to my wife.

Based on your dollar amount, I'd have to say great work on thinking about saving early on in life. I think though, if you are actually starting out, getting into the habit of saving a "dime of every dollar" would be more beneficial.

At some point your income will increase, and when it does so should your savings. By "paying yourself first" your savings will keep pace with your spending and you will be a happier person when you income starts to fall again.

  • Ah, so, instead of a set amount, I would calculate our total expenses and then use a percentage of it as the new per month amount? – user2738698 Apr 15 '14 at 15:51
  • Kinda. You calculate your total income, and then save 10% of that to not spend. Use what remains to spend. I am assuming you don't have a lot of fixed expenses. You can read other questions about budgets on here and then ask a new question if something comes up. – MrChrister Apr 15 '14 at 16:02
  • Ohh, I was thinking the flip side: where 90% is saved, and 10% is free to be spent. But, yes, I understand what you mean. – user2738698 Apr 15 '14 at 16:06
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    @user2738698 - what MrChrister means is say you earn $100 per period, you would pay yourself first (your savings) 10% or $10, then pay all your expenses (rent, food, phone, etc.), say $50. The remaining $40 you have free to spend and enjoy on yourselves. If you want to save more you can increase the pay yourself first, but try to at least start with 10%. Once you have built up some savings as a buffer for a rainy day you may even start thinking about investing your future savings for better long term returns. A budget is a work-in-progress and it should change with your changing requirements. – Victor Apr 15 '14 at 21:48
  • +1 - for the pay yourself first concept - great advice for someone just starting their adult lives as well as those finding it hard to make ends meet. It just takes a bit of a mind shift and some discipline to make it work. – Victor Apr 15 '14 at 21:51

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