There’s no doubting that you need to have a solid budget in place so that you can strengthen and maintain your financial and mental health. That being said, it’s also best to invest in enjoying all the hard work you put into earning your income while comparing rates with local insurance agents. Learn why you should have a mad money account for those times when you want to buy a little something for yourself.
What Is Mad Money?
Simply put, mad money is money socked away for impulse purchases and minor expenses. This differs from an emergency fund, which is often solely for things like medical emergencies, the sudden loss of a job and car repairs. You might be hesitant to open yet another account with your bank, but you’re sure to enjoy the feeling of knowing that all your other bills and financial obligations are taken care of when you’re thinking about a fancy dinner, buying a book or anything else you like to do to treat yourself.
Give Your Budgeting Some Incentive
You put a lot of hard work and thought into carving out the perfect budget, making small sacrifices here and there and deciding which expenses you can do without. Having that much discipline is great, but it can drain away at your spontaneity, which robs you of the total satisfaction of being a pro at budgeting.
By setting up a mad money account, you give yourself even more of a reason to tighten your budget and take care of your debt, so you have even more money to spend on yourself and the things you enjoy. Everything needs to be balanced in life, including how much you save and how much you spend.
Get Rid of the Stress That Comes With Finances
For all its benefits, worrying about whether you’re doing a good job of sticking to your budget can add a degree of stress, the very stress you wanted to address when you initially created your budget. Allowing yourself room to splurge every now and then can unbottle that worry without having it lead to more. You can buy a cup of coffee or go to the movies and not feel guilty about your other financial needs going unmet, because you purposefully set aside that money specifically for coffee and the movies.
Getting Creative With How You Splurge
Another reason to have a mad money account is for the creativity it can spark in you. For instance, rather than going out to a restaurant for a nice meal or hopping online to order a new book, you can use your mad money to make yourself a nice meal, which could cost less than eating out at a restaurant. You can also visit a local independent bookstore to buy a new book, which helps support your local community and your local economy, something you’re sure to feel good about.
While you’re figuring out your monthly bills, don’t forget to make room for a bit of financial fun. Despite the name, your mad money is sure to bring a smile to your face.