The idea behind segmenting household budgets from personal budgets is to put the “exceptions” and loopholes in one obvious place. Personal means just that - every member of the household has their own individual account. All expenditures for that one individual are allocated to the control of that one person. Both the funds, and the responsibility to manage them, are clearly delineated.
Categories of personal expenses could include - doctor, dentist, hair stylist, barber, clothing, restaurants, entertainment, gifts, health club, dues, etc. Start by determining annual amounts, then pro-rate and control them monthly.
Depending upon personality type, the effect of this segmentation will -
- teach discipline to those who are casual with their spending, or
- create freedom for the frugal who feel they have received a gift of a little mad money.
The Wikipedia article on personal budgets provides a helpful overview of this topic.
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