Many, if not almost all of you reading this, have worked with us on your financial plan, and part of that includes your budget and future budgets. So, many of you have also heard me talk about my wife, RoseAnne, and my “mad money” budget. But maybe it deserves to be talked about in a little more detail.
RoseAnne and I keep three checking accounts. One is our primary checking account where all our bills are paid and our income flows. Neither of us has an ATM card for this account and we do not use it for personal spending. Then, we have two other checking accounts. One is called “RoseAnne’s Mad Money” and the other “Erik’s Mad Money”. Our bank generously even put that title on the ATM card for us!
The “mad money” accounts are for discretionary spending on treats, hobbies, or impulse buys. Why do we have mad money accounts? Well, because then both of us have a spending account independent of the other. It is essentially where we put our allowance each month. It is our personal and individual MAD MONEY.
If RoseAnne would like to save up her mad money and take an amazing trip all to herself, then it is her choice. And if I want to blow all of mine on amazingly good and very rare bourbon, then it is my choice. But we both get an equal amount each month, we both have personal decisions and no excuses for our ideas on how to spend it.
Everything else in the primary checking account is used to pay bills, fund our household, and save for our long-term goals.
Here at TenBridge, with our clients, we often find this idea especially helpful for people approaching or in retirement. Our clients’ visions may differ from one another in terms of what they want and what they want to do in retirement. By having separate spending accounts, we can tailor their individual retirement experience and plan for their own personal vision.
But it can also be peace in marriage and partnership; it is a feeling of control, and it is a valuable way to honor the individual and the uniqueness of them.
NOW, how you spend your money is another matter and we will touch on that next week when we explore the idea of the Retirement Interview.
Just an idea. Worth two cents or twenty. As you see fit.
About TenBridge Partners
TenBridge Partners is an independent financial planning and investment management firm based in Portland, Oregon with a simple focus of honoring the fiduciary responsibility of putting clients first. Guiding with curiosity and trusted expertise, we empower people to live their unique story with financial clarity and confidence.
Planning is central to everything we do. Our focus is on a complete understanding of your needs through the financial planning process, putting your success at the heart of our work.
We strive to create a community where financial planning feels fun, dynamic, and human.
From the desk of
Erik Lawrence CFP®
The information contained in this correspondence is intended for general educational purposes only and as a means for facilitating a conversation. Please consider our door always open to discuss your particular situation and how this information might benefit you and fit your specific needs.