Wednesday, February 9, 2011

Sanity Money

Last night my husband sat down and discussed our current budget and reworked it. I had been wanting to do this for some time, but he did not. Lately there had been a few things happening which had been blowing our budget out of the water and they needed to be addressed. Things such as take-away, junk food and drinks that I did not want. They are a waste of money and do nothing for your health.

Anyway, we discussed different things, then I simply showed him how I thought it should be done and if he thought it was fair, including our sanity money.

What’s sanity money? Basically it is an agreed amount you can spend on whatever you like. So if you like magazines, but they are not included in the budget, you can buy them from this. Or if you want a $500 pair of shoes, you can save your sanity money and buy them with no guilt, as they are from your sanity/splurge money.

Sanity money helps stop a lot of people from overspending and is often a great way for the non-budget minded partner in a relationship to learn a bit about money management.

Back to our sanity money.

You see, my husband likes Maccas. Yep, gross to the max, but he loves it. He goes through stages where he has it heaps, then nothing for a month, then blows $70 in a few days there. This cannot continue.

We have tried sanity money before but it never worked. Now, he has lost his card and instead of ordering a replacement we are going to try a cash system. We have an agreed amount for sanity, which he can buy all the junk he wants from and that is all the cash that will be out. I will still have my card for the groceries, but essentially, thats all we really pay for with it.

Now at first, to some, this might seem unfair, but he has been doing the cash thing for a while now, since he lost his card, its just the cash has been increasing and its not good.

So we agreed on an amount and what do you know, he wants to come grocery shopping to buy his things with his sanity instead of buying maccas or drinks and chocolate at the service station. We’ll see how long it lasts, but I am hoping this will help restore order to our budget.


  1. Have you cut out card interest by going the cash way? If so how much is that going to save you per annum?
    Thanks heaps for following me and Congrats on your brilliant aspirations ♥

  2. Thanks Cheri.

    I am assuming you mean credit card interest? I don't pay card interest as my card was a debit not credit card. If I did use a credit card it was always paid off before any interest was incurred.

    Also credit cards charge an annual fee, so unless you are really going to work a credit card properly I would not have one. (By properly I mean budget really well, pay it off and actually use it to your advantage. 95% of people with them don't.)

    I also don't pay bank fees as I have my mortgage and debit card with the same bank, so have a package.

  3. Forgot to add for us it will be more about not overspending and limiting junk from my husband which I estimate will save use about $2,000pr annum.


  4. Well done on sorting your finances out.

    I did the sanity money thing with my husband when we were together. It worked ok until hubby ran out of his sanity money and started pestering me for mine.

    Now that I am on my own I find that I tend to spend a bit more. This is definitely an area of personal finance in which I need to improve.

  5. Yes, well, when we have done it before he hasn't asked for more which is good. I too found when I was single (we were separated last year for a while) that I spent more on myself.

    So since we have both blown it at different times its important to us to keep the sanity money in place and not slack off or the whole budget blows.



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