Why You Need A Personal Allowance

Money Files

You can save money, pay down debt, and still spend money on things that make you happy! When you are focused on money goals like increasing savings and paying off credit card debt, it is easy to feel shameful about spending money. But you work too hard as a six-figure earner not to invest in fun.

In today’s episode, I share the importance of a personal allowance. By establishing an allowance in your spending plan or budget, you give yourself permission to treat yourself to a manicure, fancy dinner, or special treat in a controlled way that still aligns with your financial goals. 

If you make good money but can’t get out of the paycheck-to-paycheck cycle, are hyper-focused on paying down debt, or feel shame about spending on items that make you feel good, this episode is for you! 

During this episode, I offer five reasons why you need a personal allowance:

[04:25] Align spending with financial goals

[06:08] Permission to invest in yourself

[07:07] Overcome shame of spending money

[08:11] Promotes financial wellness

[10:07] Give couples permission to spend, maintain financial autonomy, and reach partnership savings goals without impacting bills or debt

If you are ready to learn how to spend guilt-free and still hit all your money goals, tune into this episode of Money Files!

Are you ready to experience less stress with your finances? Apply to work with me, and let’s change your relationship with money.

IF YOU LOVED THIS CONVERSATION ON WHY YOU NEED A PERSONAL ALLOWANCE, CHECK OUT MY EPISODE ON HOW TO NAVIGATE OVERSPENDING WITHOUT GUILT!

Transcript for “Why You Need A Personal Allowance”

Intro: Hi, and welcome to Money Files. I’m Keina Newell from Wealth Over Now. I work every day with professional women and solopreneurs to help them get out of financial overwhelm and shame so they can experience more flexibility and ease with their finances. Are you ready to gain confidence and learn to manage your finances intentionally? Tune in and grab financial tips that will help you master the way you think about and manage your finances.

Keina: Hello and welcome back to another episode of Money Files. Today I want to take you to a topic. I don’t know if you remember this when you were little or if this was true for you or not, but when I was a child we used to get an allowance and I can’t really tell you how much it was. I don’t remember the amount. I feel like sometimes it was $5 a week, but you got an allowance for your chores and doing well in school. Like I just remember having an allowance and I want you as an adult, I want you to have a personal allowance. So that’s what we’re going to talk about today, is you having a personal allowance. 

So this podcast is going to be for you if you make good money and you feel like you’re in the paycheck to paycheck cycle or you make good money and you’re in the process of paying down your debt. Or maybe you make good money and you have thoughts about spending money because you have shame about having money or you take pride in not needing that much. This podcast is for you and I’m going to tell you why you need a personal allowance. So there are clients that I work with and maybe you can relate, they have thoughts about spending money on, let’s take something like getting your nails done and you might tell yourself like I shouldn’t be getting my nails done when I’m living paycheck to paycheck and you feel really overwhelmed and you feel shame about spending money on yourself or you might find yourself like in the grocery store, like I literally had a client being Keina you can I buy the expensive cheese? Like I want to be able to buy the expensive cheese. Like this is one of the questions she had.

And so if you’ve ever had that question, can you buy the expensive cheese? Continue listening or even thinking about like maybe you’re in a place right now where you’re really focused on paying down debt and that’s important to you, it’s one of your central financial goals and you just kind of, maybe you fall into the thought process that all of your money should be going towards debt. And so you find that you don’t give yourself permission to be able to spend money because you need to be paying off debt. Like that should be your focus or I have clients that also have money and they make good money or they’ve maybe fallen into a lump sum of money because of the death of someone, or they have access to a trust fund. And so they have shame about spending money because the money is attached to like, you know, that’s my dad’s money or that money is family money. Like they don’t feel like they’ve earned the money. 

And so they have thoughts about what that looks like. Or another flavor of that is taking pride in the fact that you make a lot of money and you don’t need that much. So you don’t allow yourself to spend because you may have an underlying thought that money is evil. So you don’t really spend a lot of money because you want to be someone who’s like seen as being responsible and doesn’t indulge in stuff and things. No matter where you may fit into that group. I think you need a personal allowance. And when I’m talking about a personal allowance, I’m talking about amount of money that you program into your budget that you get to spend. And this money is not associated with bills, this money isn’t associated necessarily with you building an emergency fund.

It’s not associated with you paying down your debt, it’s just associated with you being able to spend money guilt free. Like the opportunity that my clients have when they work with me is they get to spend money without drama. They get to spend money guilt-free. And so having a personal allowance can invite that feeling into your life. And so when you build in a personal allowance into your spending plan or into your budget, then that means that your spending is going to be in alignment with your financial goals. Okay, I’ll say that again. If you build in a personal allowance into your spending plan or your budget, that means that your spending will be in alignment with your financial goals. So when you build in an allowance into your budget, it’s going to create an opportunity for you to spend money with ease.

Like you are literally planning to spend money, which can take the shame out of spending money. So if you are thinking about reaching your goals of paying off debt or you’re reaching the goal of saving $10,000, whatever your goal is, I want you to have an allowance because I don’t want you strangling your money. Like I do not want your money to be in a choke hold. I want you to have an allowance that’s in your budget that you say like, here’s the money that I get to spend on me. And when you build this into your spending, you’ll see it just like a bill. You’re like, this is my reward for working really hard. I’m someone who manages my money well so I have money that I’m able to spend on myself, I have money that I’m able to save, I have money that I’m able to put towards my bills. I have money that I’m able to put towards my debt. 

My money is working towards my financial goals and part of my financial goals is focused on me being able to have money to spend. And your spending will become a healthy priority alongside your other financial goals of saving money and paying down debt. Another reason that I want you to have a personal allowance is because it’s going to give you permission to invest in yourself. A lot of what I see in having worked with over a hundred clients is the fact that there are a lot of people that do not trust themselves to spend money. They just quite frankly don’t trust themselves. They don’t trust themselves to be able to maintain goals. They don’t trust themselves to have paid off their debt and maintain paying off their debt. They don’t trust themselves to have saved $10,000 and maintain saving the $10,000.

And so by you having a personal allowance that is built in with your goals, it’s going to give you permission to invest in yourself. It’s going to rework your thought that you can’t trust yourself with money because it’s going to mean that you have a fund that you’ve put into your budget that’s going to allow you to fund day-to-day moments that bring you joy. You’re going to be able to stop shaming yourself for spending, which is going to also further clarify how you want to spend money. And ultimately you’re going to be able to build financial trust for yourself. And if you are someone who maybe is in that overspending, emotional spending pattern, like I want you to also have a personal allowance because it’s going to reshape and reform the way that you spend money. And so maybe you’ve seen yourself as like, oh my goodness, like money just slips through my fingers and all I do is spend money.

But when you have a personal allowance that you can clearly see fits into your plan, you are going to feel a lot better about how you’re spending money and you’re still going to be able to spend money. It’s not going to be about you strangling like your budget and saying like, oh my goodness, no, I’m not going to spend anything this month. You know, those like no spend challenges. I don’t really operate under the no spend challenge rule because I think that it kind of is in that diet culture of all or nothing. And so you’re not giving yourself the opportunity to actually invest in yourself and giving yourself permission to spend, which can cause you to go from like, I haven’t spent any money in 30 days to, oh my goodness, I just spent a thousand dollars. 

I also think you should have a personal allowance because it’s going to promote financial wellness. So depending on where you are in your financial journey, you might be triggered by the thought that I don’t have enough money because maybe you’re in the middle of paying down debt, or you’re in a spot where you’re working towards earning more money. And so I would still encourage you to give yourself some guilt-free spending money. I want you to give yourself some type of allowance because you prioritizing this in your budget, similar to saving money is going to make space for this to grow over time. So in the same way that you can save money, you can pay down debt and you can spend money all at the same time. 

And so it may look like your personal allowance or your guilt free spending. Maybe right now you only can make the space for $20 a paycheck. That’s okay. We’re not shaming or judging ourselves about that. We are using this as an opportunity, like I said, to promote financial wellness. We’re using this as an opportunity to give ourselves permission to invest in ourselves. We’re using this as an opportunity to build in spending with our financial goals and as you pay down your debt and as you work towards earning more money, you will also be able to make sure that like over time you further fund this goal in your life to have a personal allowance, it will become a part of your financial vision as you think about earning more money over time, as you think about what do you want to be doing with your money after you pay down debt, after you hit a savings goals. 

And then lastly, I just want to bring in an opportunity and like clarity for couples. I love it when I’m working with couples and I am able to help couples create like a, his and her allowance is generally what we call it because it’s a great opportunity for couples to work towards their financial goals together while also having freedom to spend and have financial autonomy. So it can support your financial goals. Like let’s say your goal is paying off debt, or you guys want to be able to save because you’re thinking about buying a home. You can still keep and focus those goals because you’re thinking about what you guys want in terms of your partnership, but then you’re also thinking about, okay, well how can we be able to spend money or have money for gifts or like for each other, or I want to go hang out with the guys, I want to go hang out with the girls, or whatever that looks like. 

How can we be able to make sure that we’re not touching our financial goals or I’m not impacting the bills and I’m always like, give yourself an allowance, then you can’t check in on him for buying phishing tools. You can’t check in on her for whatever clothes that she wants to buy. But you can incorporate that into your budget and it’ll allow you guys to be able to have some freedom and flexibility about how you want to spend money. But then it also will allow you to have some ease with being able to work towards your financial goals. And you can make a transfer to separate personal accounts every week. You could do it bi-weekly, you could do it monthly, but I have a lot of couples that they just have a separate checking account that that’s where their personal allowance goes. 

So your homework assignment after this episode is to figure out where are you going to put in a personal allowance for yourself that you can actually use to fund your day-to-day joy and be able to think about the things that you want to be able to do and how are you going to invest in yourself? How are you going to promote your financial wellness and build in spending into your financial goals as well? Because we can save, pay down debt and spend money at the same time. So thank you so much for tuning in and if you want to dive deeper, apply to work with me in my five month coaching partnership and I’ll talk to you later.

Outro: Thank you so much for listening to Money Files. If you’re ready to take the next step to reach your financial goals, head to www.wealthovernow.com/appointment and let’s get started.

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