Frugal Friday: Mad Money $$

When folks find out that we are on a strict budget, they often ask questions like, "How do you buy things that just YOU want?" or "Do y'all get frustrated with each other if the other spends too much money?"  Before we went on the budget I had so many questions like those.  We would try to be frugal and something would come along we just had to have, we'd buy it, and then feel guilty.  One of my favorite things about the budget we have now is the concept of mad money.  Every month we budget in a certain amount for both Jed and I to get mad money.  This money is ours individually and we can do with it whatever we want.  WHATEVER WE WANT.  If I want to buy a ridiculous pair of shoes, I can do it.  If Jed wants to buy an expensive flashlight (happens often), he can do it.  We are not allowed to get upset about the other one's mad money purchases.  Our current mad money amount is not that much ($50 each), but it is plenty to get something we want or save up.  We also get $25 each per month for clothing, that we save up.
One difficult thing about mad money is that we are always trying to convince the other that our intended mad money purchase should really come out of the house fund or the car fund or some other fund.  Sometimes this is true, and we work that out.  Sometimes it isn't. Our house does not need yet another flashlight.  Sorry darlin'.  The other downside of mad money is that if you make a mistake, your mad money has to pay for it.  For instance, Jed got a speeding ticket the other day, and his mad money fund took a big hit.  Bummer.
Mad money is one of the main reasons we are able to stick to our budget.  I love that I have the freedom to buy whatever I want as long as I have enough mad money.  For a born shopper like me, this is HUGE.  I've told y'all before that doing Dave Ramsey's Total Money Makeover and sticking to a budget has been the best thing ever for our marriage.  With the budget and our mad money funds, we never fight over money.  Ever.  You can read more about our financial story here.

Do you have a mad money fund or something similar in your house?