Saturday, June 6

How much mad money do you allow?

Kind of like emergency fund vs. debt reduction this is one of the eternal questions, no?

Especially while you're still in debt, how much money do you give yourself to spend without concern? And how much is that in relation to your actual income?

This question is once again rearing its head for Tim and I. For awhile, we had a whopping $10 each per week. That got nixed in the midst of our terrible April. And has yet to be reinstated.

It wasn't a big deal, really, because Tim has been selling so many Magic cards, he has been getting along with that money. But that source has officially run dry until we get some more orders together to mail off.

He recently approached me about this. Right around the time I was trying to find $20 in the weekly budget for farmer's market season. Tim loves the special cheeses (I swear that boy was a cow in a previous life), and I delight in the multitudes of cherries (and, later, peaches).

Tim's request is actually very financially sound. He doesn't even want $10 a week, necessarily. Well, I'm sure he wouldn't mind it, but he knows it'll stress me out. So he's asking for a whopping $5 a week. That would mean finding $25 a week. Surely, not an insurmountable task.

And I've always believed that having no money to spend on yourself is one of the quickest paths to insanity. At the same time, every dollar we spend on ourselves is a dollar that could go toward debt. So where does one draw the line? And where should the mad money come from?

I'm still not sure what a good amount is. I do, however, know what we can afford -- at least, in my mind. It's not much. So I had to get creative, especially in finding the money. In the end, it seemed easier to make a few small cuts, which makes the whole process a lot less painful.

Tim's mad money, actually, won't even be from a cut, so much as a reinstatement. He used to get $30 a month: three, $5 Friday Night Magic tournaments and one $15 draft tournament. (The latter is more expensive because you walk away with new cards, regardless of how you do.) Once he began playing Magic Online, I put the funds toward debt. Since it's only been about a month, though, it should be a relatively pain-free reversal to make.

As for the farmer's market, I think the money should come from our food funds. It's logical because a) we're buying food and b) our food budget is one of our only flexible expenses. My first inclination was to pillage the grocery budget. But $10 per person per week would mean our $200 grocery budget would shrink to $120. That's way too big a jump to make all at once. We'd probably fall and hit our heads, thereby incurring hospital bills. And metaphorical injuries are surprisingly expensive!

So, I'm thinking we cut from two different sources: $10 from the weekly grocery budget, $10 from the weekly delivery/eating out budget. This will keep the "food-money from food-money" ideal in place, but without going into privation mode. And I think it'll help keep us on better track in regards to delivery and eating out.

So that's my tentative plan. (At least, until I remember that I can easily plow through 3 lbs of cherries in two or three days, when left to my own devices, and so have to increase my farmer's market allowance.) It might work for us, it might not.

You may have noticed that I haven't allotted myself any mad money. It wasn't an oversight. Here's the thing: Once I have a little money, I start noticing all the things I want. No matter how diligently I save up for something, in the meantime I find at least five other things I wouldn't mind getting. It's very frustrating and leads to the urge to spend spend spend. In other words, it ends with my being resentful and horribly materialistic. It's unpleasant, and it's not the kind of person I want to be.

Instead, I think I'm going to just take things as they come. I did already spend a pretty penny on some new clothes that would actually fit. Things like that crop up every so often.

In fact, I've become acutely aware in the past sweltering week that two sports bras and one set of shorts is truly not enough when the weather is hot and my sweat glands go into overdrive. So, today we're going to Old Navy to use the new coupon I have -- 30% off $50 or more -- to get two or three more sports bras and a couple more pairs of shorts.

Frankly, I wish I didn't have to spend at all. It makes me feel exponentially further away from getting debt free. But the fact is, I need this stuff. And, other than the aforementioned Old Navy trip, I haven't spent money on clothes since our honeymoon last May. A pretty good track record, if I do say so myself.

So, to recap our mad money plan: $10 a week from the meals out/delivery fund and $10 a week from the grocery fund will take care of the farmer's market needs; Tim gets his $30/month back for Magic; and I get along as needed because if I have a little money, I start to want a lot of money.

Does that seem reasonable? How do you deal with mad money? How did you come up with your plan?

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Blogger Alissa said...

Being of a somewhat entrepreneurial bent, I have sometimes gone and spent money on things I could sell at a profit and then used that profit for mad money. Sometimes a trip to the local TJ Maxx or the Salvation Army to see if there was anything cheap that I could sell online. I haven't been selling on Ebay lately, but yesterday I went out garage sale shopping. I bought a bookshelf I needed for business, but I also bought some books to sell online. I bought a nice journal for myself, but that will be paid for by the online sales. Of course, this can be risky if you spend too much on things to sell and they don't sell, but so far I've managed to do OK with this system.

June 7, 2009 at 7:34 AM


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