Creating the Illusion of Scarcity


There comes a time in all serious relationships, when you have to decide how to combine finances with your partner.  Some couples decide to keep everything separate, and split bills down the middle, while others decide to pool all of their money together, and adopt the “what’s mine, is ours” approach.  We combine finances, and pay ourselves first to create an illusion of scarcity.

Combining Finances

Mr. Farmhouse Finance and I moved in together really early in our relationship, so we had to broach the financial discussion earlier than most couples do.  We kept our finances separate at first, but eventually opened a joint checking account for rent and other bills, and started combining savings accounts.

We have tweaked our system a number of times, and are continually updating the amounts that we put in different accounts, but landed on a system that works for us.

Creating the Illusion of Scarcity

Mr. Farmhouse Finance and I get paid biweekly on alternate weeks.  This is great because every Friday one of us gets paid.  We have separate checking and savings accounts with our local credit union that our paychecks get deposited into.  We have joint checking and savings accounts that we transfer money into.  In addition, we make transfers to our retirement accounts.

The day we get paid we make a number of transfers into our different accounts to meet all of our financial goals for the month.  We have joint goals that we contribute to together, and other things that we are saving for independently.  After making all of our transfers, we leave ourselves with a small amount of kick around money in our personal accounts that we can use however we please.

kick around money: (noun) extra cash hanging out in your checking account

1. I have a little extra kick around money this month, so let’s go get some sushi.

2. I’m gonna save my kick around money to buy a new pair of boots next month.

Having extra spending money left after we make all of our transfers each paycheck really gives us the freedom to still pursue our interests without feeling guilty about spending.  If I want to register for a race, I can.  If Mr. Farmhouse Finance wants to buy some books, or go out for a beer with his coworkers, he can.  We don’t have to ask each other for permission to spend that money because we know that all of our financial goals are being met.  Also, keeping some money separate allows us to still surprise each other with gifts, and take each other out on dates.  Do you date your spouse?  I really recommend it.

After we make all of our transfers, it feels like we don’t have any money left.  When we find ourselves talking about what we can and can’t afford, we need to remind ourselves that it is only the illusion of scarcity.  We have money for all of our obligations and are well on track to meeting our goals.  It is okay that we don’t have money to go out to dinner every night or buy new clothes every week.  We have everything we need and a lot of things we want.  We try to create an illusion of scarcity while living a life of abundance.

Our Monthly Financial Goals

I really am motivated by a “gold star” or in the case of my financial goals, green highlighting for the month that I achieved all of my goals.  A couple of years ago, I started creating tables in Word documents with all of my financial goals at the top of each column, and the months listed for the rows.  Each month when I make my transfers, I put the actual amount in the box under the goal amount.

If I met or exceeded the goal amount, I highlight that box in green.  If I came up short, I highlight it is red.  When all of my boxes for the month are green, I highlight the month in green, as well.  It’s incredible how much pleasure I find in doing this, and also incredible that I am motivated in this way.  Some people like to automate their transfers, but I really like to make each transfer myself.  Everyone has to find the system that works for them.

Here is what my table currently looks like with last month’s results:

February was a green month, so I am quite pleased to show you this.

This is of course only half of what we do because Mr. Farmhouse Finance has his own list of transfers that he makes each month.

These are our combined monthly goals:

Spending ($3,150):

  • Joint Checking – $2,100 (rent, groceries, utilities/bills)
  • Fixed Expenses  – $600 (gas, oil, car insurance, life insurance, EZpass)
  • Car Loan – $400 ($289 + extra each month to pay off ASAP)
  • Phone – $50 (paid to my parents to stay on family plan)

Saving ($3,016):

  • House Fund – $1,300
  • Emergency Fund -$350
  • Vacation Fund – $350
  • Retirement Accounts – $1,016
  • Gifts – $100 (saving for Christmas, weddings, and baby showers)

In addition to the above goals, we also have separate accounts to save money for taxes when Mr. Farmhouse Finance side hustles as a carpenter, and to save for a road bike (for me!) and other exercise equipment (for Mr. Farmhouse Finance) when we have a little extra money.

These are our amounts for a standard month, but when we get a bonus or are side hustling, we add more to our house fund or pay more off of the car.

How do you manage your money each month?

Illusion of Scarcity Worksheet (PDF)

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Download this free worksheet and start paying yourself first.


  • Budget for financial obligations and recurring expenses
  • Prioritize your financial goals
  • Make all your transfers on payday
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4 Comments

  • Great post. This is the only way you will ever save in my humble opinion. I used to try and save after I had spent, instead of the other way around. If you automate your savings, the money you start to divide the money you see in your checking account with the savings already deducted. Do it the other way around and you mentally divide the full amount and are just kidding yourself if you think there will be anything left to save at the end of the month!

    • Thanks David. I used to do the same thing, but there was never any money left for savings at the end of the month. Even now the goals that I do not save for as soon as the paycheck hits my account (like the Bike Fund), do not get funded each month. That’s okay though, because buying a bike is not a financial priority right now. Thanks for checking us out!

  • I really like the concept of creating the illusion of scarcity. I am an avid road cyclist and racer, so I have to ask what road bike you are leaning towards. 🙂

    • Hi Joe. Thanks for checking us out. I have been riding the same old Mongoose for the last 20 years, so really anything would be an upgrade. Once I save up enough, I am going to visit a bike shop to try some out. Do you have any recommendations? I’m a runner, so I may want to do a triathlon one day, but I definitely don’t need anything too fancy.

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