Happy about Mad Money
A retired couple, who came to me for financial advice, were in for one of their follow up Counselling Sessions. I had them track their spending for the previous month and was asking them how they did. They felt they had done a good job except for the fact that (in her words) her husband did not get receipts. He was openly frustrated with this requirement to account for every cent spent.
I suggested that they each be given some “mad money” each month that they don’t have to keep track of. It simply gets tracked as each persons miscellaneous spending.
The following are a few guidelines to ensure this works for everyone:
- choose an amount your spending plan supports
- each person should have an equal amount (unless all parties agree otherwise)
- the amount should be equally distributed among the pay periods
- there is no requirement to record what it is spent on (unless the individual wants to keep track for their own knowledge)
- the spending plan should be reviewed on a regular basis and adjustments made to the amount if needed
They left my office with a new plan, and one that respected everyone’s needs and the household spending plan. I anxiously await their next visit and an update on their progress.
Happy, healthy finances,
Mary Ann Marriott
aka Dr Debt