Birthday money?

What I have been doing the last few months when I've had some unexpected money in is I've split it between several categories in my budget.


So maybe you could put some towards new shoes, keep some to treat yourself to something you wouldn't normally have spent on (a new top or some makeup?) and then some towards your debts.


If you completely cut treats out you might be more likely to fall off the wagon, so to speak. Especially if its your birthday money, you might feel a bit resentful about putting it all towards your debt.

koselur wrote: »

Here's my question - how do you lot handle birthday money & other monetary gifts?

Depending on how you are handling the income, I usually put it in a special category in YNAB which forms part of the buffer, but is clearly marked as mine. If the SHTF, then, of course, the money goes to the highest priority spend like food, but if not, it is mine to do with as I wish. The fact that it is there does not mean it needs to be spent immediately, and really, half the fun of having it is deciding on the very best use of it you can. Dont just spend it and forget it, really think about what you actually want to buy, research and then ultimately, get yourself what you really want, but not necessarily need. This is one of those cases where need and want are most definately the other way around.

koselur wrote: »

I'm in two minds whether to spend it on something nice for myself/put aside for a holiday etc, or to chuck it at my debts. Don't think my dad would want me to go for the latter but it seems like the most sensible option? I've obviously not budgeted to have the money so I don't need to spend it. In the past I would have frittered it away but really don't want to do that this time.

Your father gave it to you to buy something for yourself. He probably would not appreciate it being spent on debts. See above. Just because you have it doesnt mean you need to spend it immediately. It wont evaporate if you dont rush down to the shops immediately. Nothing says you have to buy something this minute. Just think about it first. Make a list of things you want to buy in order of priority and then put that list away for 7 days. Come back later, look at it again and if your priorities have not changed, go spend it on that item guilt free.

koselur wrote: »

The other thing I was thinking was to use it to pay for some bits and pieces that I need (e.g. some work shoes for summer as I only have boots etc) but that would otherwise be outside my usual budget.

Then this needs to be in your normal budget so that this sort of question doesnt arise. This is where YNAB comes in. If you have your categories set up properly, this sort of windfall becomes an unexpected bonus rather than a race to figure out where to spend it best.

koselur wrote: »

I'm also worried it's going to derail my budgeting this month as I'm really new to living on a budget (and tbh not finding it that easy!) and don't want having a bit of unexpected cash to send me on an overspending spree.

Then lock it away. Either literally, in a sealed envelope, or electronically in a hard-to-get-to account until you have decided what you want to do with it.

Pay off some debt. No question.

I tend to go with spend half/save half.

My finances come out of my "real" income, and gifts are for things I want.. but one thing I want is to be financially stable.

So by splitting it, you get a little bonus to work towards your debt goals, and a little treat as a "well done, and don't forget to be a human and enjoy yourself too"