Mad Money: A Modern Woman's Guide

Mad money has meant different things over the years. Mad money used to refer to the money that girls would pin inside their clothing before going on a date, in case it went awry and they needed a way home. Mad money also refers to the little extra bit of money you put away for something special, or that you bring with you to cover extra niceties while traveling. In today's financial climate mad money mainly refers to the extra money you have to invest after all other necessities are covered.

Every modern woman needs to have her own "mad money."

Why a Modern Woman Needs "Mad Money"

Every woman needs to have some of her own mad money. This applies to single and married women, or women living with a significant other.

One reason a woman needs to have her own mad money is to have a sense of self-worth. This is especially true for women who are accustomed to earning their own money and no longer work. A woman might stay home to take care of a sick or elderly parent, or has recently given birth has decided to become a stay-at-home mother.

In fact, according the U.S. Census (2003), 15% percent more women are now stay-at-home moms compared to a decade ago. For women who are used to making their own money, it's difficult to stop receiving a paycheck, and with no money of her own a woman may feel too dependent on her partner.

Married women who rely on their husband's paycheck for all or most of the household bills, need to have a back up plan and some mad money in case something happens to their husband. The reality is that within four months of a husband passing away, one in four women are broke. By having some of your own mad money stashed away, you may buy yourself more time to realign your personal and financial situation.