Critique my £500 a month pocket money

[Notradespeopleareavailable]

I'm working on household budgets and figure after all my essential expenses, savings and re-occurring bills, I have £500 left to fritter on fripperies each month.

This money will be used for:
Clothes
Beauty treatments
Books
Hobbies
Presents and gifts
Biggies such as holidays and days out.

Does £500 seem a lot for 1 person to spend each month?

How many people is it for? Are you saving for a family holiday out of the £500, or just you? Etc.

@NoSquirrels

How many people is it for? Are you saving for a family holiday out of the £500, or just you? Etc.

Apologies - you did say it was for 1 person only.

Yes, £500 a month is a lot to “fritter on fripperies” but if you annualised your clothing budget, holidays/weekends away budget, and worked out what you spend on gifts/Christmas then probably it’s much less on actual “fripperies”.

DH and I each take £400 per month personal spends.

I use mine for haircuts, coffees and meals out with friends, clothes and toiletries and personal holidays.

During lockdown I've managed to accumulate a bit of a surplus, but normally spend most of it because of annual long weekend ski holiday with friends and generally a foreign city break. DH spends his on climbing equipment and trips.

Thanks everyone for your replies so far.

The £500 is a limit - not a target - for monthly spending on 'treats'. I have a separate pension, I do savings and pool all household expenses with my partner via a separate joint account. So the £500 is all mine, though it does need to cover holidays, trips away and presents, in addition to clothes, beauty treatments, books and hobbies.

How much are you saving? If you’re spending more on fripperies than you’re saving then I think you’ve got it wrong and should rebudget.

I also think it would be smarter to budget for some of those things - holidays for example, if it’s the actual holiday you mean and not spends.

I budget £400/m discretionary spending, I save more than twice as much. When I earned less i budgeted £200 max for the same.

Hmm. Maybe I should save £200 a month as a holiday/ days out fund ( I mean the actual holiday, not just spending money).

I'm aiming to save £750 per month btw (ie in addition to my £500 frippery money).

@NuffSaidSam

I wouldn't 'fritter' any money tbh.

I'd buy what I wanted/needed and save the rest.

I wouldn't approach it like you've got to fritter away £500 a month that seems silly to me. Don't treat it like it's burning a whole in your pocket.

How much you spend on 'extras' will depend on you budget. If £500 works for you, then it's fine.

Just spend it on stuff you actually want or need.

Exactly this. The OP reads like 'help me waste £500 each month.'

Why do people save such big chunks of their income? Is it with a specific goal in mind?

It's quite a lot but it's jolly nice. Enjoy!

I budget with YNAB and that's probably on a par with what I budget. It's actually a bit tight in the clothes and money section but I can't afford more without getting rid of the other treats that I much prefer. Obviously I don't spend it all each month but it averages out across the year.

£60 Hair (balayage at expensive salon every 3 months)
£30 dining out/coffees
£40 small garden/ home expenses e.g compost, plants, lamps and other bits
£20 kindle/audible purchases
£40 gifts for others
£40 a monthly treat for me (brownies by post, candle making kit, lush gift box etc)
£60 bigger purchases (I let this build up and last used it for a dressing table, chair and mirror)
£15 contact lenses and eye tests/ glasses costs
£40 days out- Canoeing, safari park etc
£40- clothing
£20- Makeup and skincare
£15 charity and work collections
£20 Stuff I forgot to budget for

I’m early 30s, live in London and regularly go out with friends. I budget about £400 a month for these things and always spend it.
However, I do have another budget in our joint account for if DP and I eat out or go out somewhere together so if you include that it’s probably more like £500 a month.
I save £1,200 each month so don’t feel guilty about enjoying that money.

Should have added- separately I budget £200 for holidays and £300 for big jobs we need to do around the house

@Floralnomad

Does anyone actually set aside an amount of money to spend ? Surely most people get paid , put aside any savings , pay any bills and then whatever is left you spend from if you need something / go shopping . I don’t think I’ve ever looked at my account and thought I’ve got 500/800/1000 to spend this month on ‘fripperies’ .

Yes I do, I have a set ‘spends’ amount that goes into a separate account, so I keep to a budget.

Many food banks are getting low on donations, and demand keeps increasing.

Something you might be able to help with?

I don't think holidays, clothes, and presents are fripperies 😄; they should be part of a budget.

You've got me thinking about how much I spend on this type of thing. £500 adds up very quickly.

This month -

Gym £45
Yoga classes £35
Hair £50
Nails £30
Clothes £50
Nights out £45
Coffees out £20
Payments towards weekends away £45
Make up and skin care £40
Small bits and pieces for the house £35
Afternoon out with my Mum £15
Birthday present £20

Total £430

@MorrisZapp

Why do people save such big chunks of their income? Is it with a specific goal in mind?

I can't speak for the OP but I save for the following reasons.

a) pension for the tax relief
b) long term S&S savings - effectively more pension although we used some of it when we bought this house
c) short term cash savings for the house (me) or holidays (DH)

I save a lot more each month than I have as frippery spending but my frippery spending is still ~£400 so I'm not exactly counting every penny. That just covers clothes for me and the DC, books, presents, pretty things for the house I like, and days out. I spend it every month.

Saving gives you a safety net. If our income goes down or our expenditure goes up we know we can cope because we have savings and we are living well with our means at the moment. For example, we are currently in the sweet spot between paying for childcare and paying for University, when we stopped needing childcare we massively increased the amount we saved. When the DC go to Uni the amount we save each month will probably go down since we'll have to pay a big chunk of their living expenses (for a couple of years we'll have 2 at Uni so will be paying out about £1K a month). Obviously we are very fortunate to be able to afford this amount of savings and still have a nice lifestyle but even on a more average income it makes sense to try and put money aside on a regular basis.

I think the better question is why anyone wouldn’t save big chunks of income if they have it - it’s a very reassuring feeling.

OP if you’re able to save £1200/m I say crack on and spend your £500 on non essential frippery! I’ve increased my income considerably over the last couple of years and each time I have increased the amount I budget for discretionary spends as well as the amount I save. When you earn more you’re generally working harder too so you have to allow yourself to reap the rewards don’t you.

It’s also ok for others not to be able to fathom why you’d spend that much money on those things!

@Doorhandleghost I think the risk is that you become so obsessed with saving those big chunks that you never get to enjoy what you earn. I have 6 months expenses saved and that's enough for me. My current monthly savings are for specific goals only.

I am impressed with what you save already, Notradespeople. I've never been much good at budgeting (so am easily impressed :-)); now I've been retired a while I don't even think about it, just assume there is more than enough and the rest will accumulate, giving me a nice surprise eventually. That's one advantage to getting old I suppose.

Wish I had been more like you when I was younger.

The £500 is a limit - not a target - for monthly spending on 'treats'. I have a separate pension, I do savings and pool all household expenses with my partner via a separate joint account. So the £500 is all mine, though it does need to cover holidays, trips away and presents, in addition to clothes, beauty treatments, books and hobbies.

So - are clothes ‘treats’? I mean, there’s a minimum spend on clothing that’s necessary - underwear & socks, replacing worn out basics, one or two pairs of shoes or a coat to replace etc. Then there’s what you’d spend above the bare minimum that makes it a ‘treat’.

Thinking in terms of a limit not a target is a bit unhelpful too - limits are great, that’s a good thing, but an amorphous blob of money that you could spend all of on very different products is unhelpful. Better to split out what you intend to spend over 12 months on each category and then you have a guide to what’s reasonable.

£500 is LOADS until you start breaking it down by what you realistically will spend it on. Problems occur when you ‘double-count’ e.g. I can afford to buy £X clothes and spend £X on days out and look at that bargain winter coat on sale at £X and… and… and…

Thinking in terms of a limit not a target is a bit unhelpful too - limits are great, that’s a good thing, but an amorphous blob of money that you could spend all of on very different products is unhelpful. Better to split out what you intend to spend over 12 months on each category and then you have a guide to what’s reasonable.

£500 is LOADS until you start breaking it down by what you realistically will spend it on. Problems occur when you ‘double-count’ e.g. I can afford to buy £X clothes and spend £X on days out and look at that bargain winter coat on sale at £X and… and… and…

I think it depends how you think. DH is very like you and uses Monzo to split up all his different pots. He regularly ends up overdrawn. I have an amorphous blob of money and cope fine and always have money left over at the end of each month.

The frippery money is just that, fripperies. All the essentials are paid for and I've plenty of savings so if I have a big cost one month (thinking about school clothes for the DC this month) then it's not going to kill me if I have to wait till Sept to buy a book or get myself a new top or cushion. And it better reflects how I spend my money as well, it's not a set amount on these things every month, it's lumpy. In August I buy school clothes for the DC but I'll not buy any in Sept but then I might buy myself e.g. a nice lamp.

I have a £500 pcm discretionary fund, which includes household repairs (tonnes of those lately), clothes and shoes for me and DC (inc school uniform), family holiday savings, gifts, travel to see elderly parents.Anything I don't spend gets saved in the 'Emergencies/Doing up House' ISA fund.

I agree that it totally depends how you think and also it's a 'how long is a piece of string' question as to whether the amount is reasonable.

As the OP has already clarified that she's sorted her pension and saves for large purchases, so this is genuinely spare money, it's fine. If she was having to borrow to get her car through its MOT or other irregular but essential expenditure, less so and obviously she should cut down her 'fripperies' budget so she had a better emergency fund.

As to whether or not it's 'enough' as well as deciding on the amount based on how much spare money you have, it also depends on what sort of wants you have, some people could piss through it in far less than a month, others wouldn't make a dent in it.

As it happens DP and I have about this amount of 'pocket money' and have operated this system for over a decade. He is a spender, constantly looking for the next thing he can buy. My wants are far more modest and I often get to the end of the month and find that I've bought a couple of bottles of craft gin, 3 kindle books at 99 p each and been out to lunch a couple of times (I rarely buy clothes and spend absolutely nothing on personal grooming, I don't even have hair cuts because my hair breaks before it grows) and have spent about £80, whereas DP has spent £5/600 on bike stuff. So I buy premium bonds with the money I haven't spent. I have over £40k, and that's all because of the differences in our spending over time, he consistently spends about £2/300 a month more than I do.

Some people see a pot of money and think 'what can I spend it on' but not everyone thinks like that, so it depends a lot on how you think about money as to whether a general pot of money for free spending on non essentials is helpful or not, which I think it is, because then you just spend what you like without worrying that you don't have enough for essentials or aren't saving enough, if there's money in the pot, you can spend it, if there isn't, you can't.

How you think about money probably affects how you see those 'save the change' apps that skim off bits of money into a separate account whereas a lot of people rave about them, saying things like 'I saved £120 in a month without even noticing' as if it magics money out of thin air, whereas if you're a saver and less interested in spending, you just see it as 'well if it wasn't doing that, the money would just sit in my current account instead'.

If you are on sufficient income to save £750 and have £500 left over for nothing very much, that’s about £22k pre tax income spare after housing and general costs.
The savings are good. I’m surprised you’re only thinking £2,400 for holidays on such a good income considering additional holiday costs too.

Whether it is reasonable to spend that amount depends on your social circles and lifestyles. For some it’s unimaginable wealth and a friend with constant new clothes and handbags might seem to be a tad smug/self congratulatory. In other sets, it might be seen as deserving of sympathy.