Budgeting Pocket Money

Aurora asks if you still budget for mad money when you're getting out of debt. What would Dave do?

QUESTION: Aurora asks if you still budget for mad money when you’re getting out of debt. What would Dave do?

ANSWER: It’s the amount that you put in mad money that matters. If you put $5 in there, it’s probably not going to throw you off too much. If you put $500 in mad money, then yeah, your point is taken. So it all has to do with the amount. Yes, you need some mad money, but you don’t need enough to get really, really mad. You just need enough to have some fun. Five bucks. Pocket money. A little bit of change because if you don’t have a little bit of safety valve there—a little bit to let the steam off—you’ll jump over there and buy lunch with the old debit card and bust your budget. You need to have that pocket money to keep things moving. It keeps the skids greased.