Mad Money Spending

[Rustic23]

How much can you spend without feeling guilty? For me it is anything less than $50. That is my 'rational' point. If I see something I want, and it is less than $50 I know I can buy it and never miss the funds. OK, $25 is a no brainer, but $50 is most likely my upper limit. Before I retired, it was closer to $5. Just thought it might be interesting to see where others frugality limit is.

[REWahoo]

I don't look at "mad money" spending limits the same way you do Rustic, at least not as a specific dollar amount I can spend at any time without guilt. My approach is to see how things are going with regard to our annual budget and, if things look good, I might feel comfortable spending some money on an unplanned item - like the 32" Samsung LCD TV I just bought off the Sam's auction site.

[audreyh1]

DH and I pretty much got away most any kind of impulse buying when we downsized as I learned my lesson well about unplanned purchases tending to have a pretty short usable life and often ended up buried somewhere.

Instead, DH and I have perfected the art of spending well on top quality (or very high quality) for the few things we really DO want and use. And I never feel guilty about that! What is money for?

Audrey

[plex]

Can't really select one of the options. The option I would have selected is, "sky is the limit, if I have researched it thoroughly and am confident it is a good deal." If it doesn't fall in this category, spending $1 makes me pretty uncomfortable.

[ziggy29]

We don't really have a specific "line" drawn, but if we did, it would probably be at about $100. In reality, as long as our discretionary and impulse spending is low enough that we still have money left over at the end of the month after all the bills are paid and we've saved and invested about 25% of our income (roughly my target), I'm not all that concerned -- even though I know "small stuff" can add up to big stuff over time.

I believe in LBYM and being debt-free, but I'd rather not hurt my quality of life stressing and obsessing over where every last dollar goes as long as we have the luxury of not having to do so.

[bbbamI]

Our budget speaks loud and clear about any type of spending. During the year we will stick to it (probably spending a little less than allowed) and at the end of the year if there is 'extra' money, we'll probably get wiggy and buy a toy or two.

Of course that depends on what our investments look like at the end of the year.

[W2R]

Quote:

Originally Posted by REWahoo I don't look at "mad money" spending limits the same way you do Rustic, at least not as a specific dollar amount I can spend at any time without guilt. My approach is to see how things are going with regard to our annual budget and, if things look good, I might feel comfortable spending some money on an unplanned item - like the 32" Samsung LCD TV I just bought off the Sam's auction site.

Exactly. I don't buy anything unless I have decided that this is something that I want and that will fit in with my spending plan.

Sometimes I *WAIT* to buy the item, if my spending has been overboard but I don't tell myself not to buy it, or that I should feel guilty.

I don't feel the slightest bit guilty for spending almost 150% of my 2009 expenditures for my new Toyota Venza, because buying a brand new vehicle in 2010 has been in my financial plan since back in 2000.

I didn't feel guilty for buying a couple of baskets for $10 each the other day, because I still had money left in my budget for the month. I bought a shredder for $70 when doing my taxes, and made a mental note not to buy anything else big for a little while.

If my expenditures begin to EXCEED the amount I have allotted myself per month, and if I don't have money left over from prior months in the past year, I suppose I would feel guilty over spending anything at all until things are reined in a bit. In reality, I would not even spend a nickel that I didn't have to spend (other than on food) until that time.

So anyway, I voted "The Sky is the Limit". But also you might say a penny. I would feel guilty buying anything that was just throwing away money on something I didn't want. I have a hard time at the casinos and have never spent more than $20 there (usually spend nothing, whoopee, aren't I a fun date).

[NW-Bound]

It is difficult for me to answer, as I now desire very few things. I used to go to Fry's Electronics every few weeks and spent $100 to $200 on computer or electronics stuff. My problem is that I hate to throw or give away things that still work, hence my house is full of electronic knick-knack. I do not want to accumulate any more junk than what I already have.

If my old car is to suffer an unrepairable problem, I would not hesitate to go out tomorrow to buy a new car and to pay with cash. But I do not research, go shopping, or look into anything that I have no immediate need for. I guess it means I have little mad desire for mad money to buy. I cannot vote for "the sky is the limit" either, so I vote for $100.

[traineeinvestor]

I have an annual budget for guilt free spending on luxuries. So long as I spend less than that, I do not worry about it. Given the amount budgeted this year, I voted "the sky's the limit" which, while not true, is closest to the poll.

[FIREd]

We try to carefully plan any purchase over $500. I start to feel guilty when I spend over $200-$300 on an unplanned purchase.

[DangerMouse]

We don't have a dollar limit, however we are not big purchasers of "things". Our most expensive purchases seem to be travel related. If we get a good offer to upgrade to first class we will take it. If we want to stay at a nicer hotel we do.

When it actually comes to buying "things" we tend to not do so unless what we have now is broken. I know DH has been eyeing of a big LCD screen, but until our current one dies it's not likely to be swopped out.

[Bikerdude]

$50 in mad money spending would equal $18,250 per year if you did it every day. I mean, if its just "chump" change to you why not be able to do it all the time? I don't think I would be comfortable with anything over $10 if I expected to do it daily on a whim.

[REWahoo]

Quote:

Originally Posted by DangerMouse I know DH has been eyeing of a big LCD screen, but until our current one dies it's not likely to be swopped out.

You realize those old CRT sets can last 25 years or more. I'm replacing one that's 20 years old and still works fine - I figure I've gotten my money's worth out of it.

[TromboneAl]

$2. Anything more just seems significant enough to have to think about.

Quote:

I know DH has been eyeing of a big LCD screen, but until our current one dies it's not likely to be swopped out.

Same here. Ours has hiccuped now and then over the last four years, but I've given up rooting for it to crash all the way, because it always recovers.

[yakers]

DW & I have a policy to consult each other for purchases >$100 from our joint money, below that if its for e both of us we just buy it per our individual judgement. We also each have a mad money account to the tune of $100 per month each that can be spent on any thing without consulting each other. DW recently bought a Cannon EOS camera from her fund and I save up for a kayak now & then.

[Westernskies]

$ isn't fixed, but it depends on what I am going to do with it.

If it for a DIY project, for example I wouldn't hesitate to spend ~$250, maybe $500...

If I am going to read it or wear it, probably ~ $30- $40

If I am going to eat it, ~$10-$20

If it is a gift for DW, then the sky is the limit...

[Onward]

If it's something for me, five bucks. Anything more, and I'd at least think twice about it. If it's a gift, maybe 40 bucks.

[Walt34]

I checked $100 but in practice it is more ambiguous than that. For a specific purpose, such as an upcoming wedding, we talk about what to spend. But if DW decided to spend $200 on a new suit one day I wouldn't be concerned as doing something like that on a whim is very rare for her.

It also matters if it is discretionary. If the car needs new tires and a brake job I will let her know what the expected expenditure is but I've never heard her say "No, I don't want new brakes on my car." She keeps a spreadsheet with current income/expenditures for this month and the next two or three months so is very much included on what funds are available for what.

It if involves taking money out of savings that is always discussed beforehand.

[WhoDaresWins]

I voted $50 but I don't feel that I waste money ever on nothing. Sure, I buy some things I don't need but feel that I get some value for the money in some way. I could get most of my reading material at the library but I will buy books, and flowers, good bottle of wine, jumbo shrimp etc.. But of course I have the necessary fixed expenses covered first.

[Onward]

Harry Browne talked about this "mad money" number in his book, How I Found Freedom in an Unfree World: A Handbook for Personal Liberty. He felt it was important to have a don't-care threshold like this. I think his was $50, but that was back in the 70s.